taxguru.in
The
season of filing of tax return is here. This year all those who have
taxable income are required to file their return. Also those with income
above Rs five lakhs have to compulsorily e-file their return. It’s very
important to file error free Income tax Return to avoid future
problems. Let’s see the most commonly committed mistakes those could be
avoided.
1. Incorrect personal details:
Every year a large number of returns are
rejected for incorrect personal details like name, bank account number,
IFSC code and address. This leads to delays in refunds. So please be
sure to fill correct personal details.
2. Mistakes in claiming deductions under section 80C:
Many of us think that employer’s contribution
to EPF has to be included in claiming sec 80C benefits. It’s incorrect.
Similarly only the principal repaid on housing loan is eligible for sec
80C. Many other deductions are claimed under wrong heads leading to
their rejection and consequent arising of tax liability.
3. Failure to include certain income:
There are certain incomes which are left out erroneously. These could be
- Interest from bank FD, Yes the interest on FD is taxable
- Income from investments made in name of spouse/children.
- Income from previous employee
4. Interest Income on savings account:
Though interest received in savings account up
to Rs 10000/- a year it is not taxable, the interest received has to be
mentioned in the return under the head ‘Income from other sources’ and
claim exemption.
5. Non reporting of exempt income:
‘Exempted Income’ like the PPF interest,
dividends, LTCG from equities, maturity proceeds of insurance policies
need to be mentioned in the separate annexure of ITR. This will reduce
unnecessary income tax queries later.
6. Failure to account for more than one property:
These days many of us own more than one
property. These may be self occupied or vacant. However as per the IT
Act 1961, only one property can be claimed as self occupied. The other
property is taxed at realizable municipal rates after deducting 30% for
taxes and repairs.
7. Discrepancy in TDS details:
Many of us file returns without verifying Form
AS26 credit of TDS held with IT Department. If your employer or anyone
else who has deducted TDS does not deposit the same with IT Department
or fails to mention your PAN Correctly, that amount will not reflect in
from AS26 leading to default. Hence do check that credit for TDS
deducted has been mentioned in Form AS 26. If there is a problem take
timely action to rectify the same.
8. Failure to pay advance Tax or self assessment tax:
Many of us have income from sources where TDS
is not applicable. The individual is required to calculate the tax
liability and pay Advance tax or self assessment tax before the closure
of financial year, ie, 31st March.
The failure to do so will attract penalty of 1% per month from 01 Apr
next financial year. At times people file returns without paying the
applicable penalty.
9. Filing of incorrect ITR Form:
Many are unable to choose the correct IT Form
due to lack of knowledge. To illustrate, let’s say you are a salaried
person, having owning one house, get some tax free allowances and
getting interest on savings account. You may feel that you need to fill
ITR 1. This is correct only if exempt income during the financial year
is less than 15000. If it is more than Rs 15000 then you are required to
file ITR2.
If you do not have digital signature while
e-filing IT return, it is mandatory to send duly signed ITR V to CPC
Bangalore by ordinary or speed post only. Sign the ITR V in blue or
black ink in the box provided. The ITR V has to be sent within 120 days of filing of return. If you fail to do so within stipulated time your return will be treated as null and void.
Incorrect filing of tax returns will lead to
many a headaches and troubles. This is not what we want. So please avoid
above mentioned mistakes. If you are not confident of filing return all
by yourself please seek professional help. It’s better to file return
correctly as well as on time to ensure mental peace. Happy filing of
return!
The author is Ramalingam.K an MBA (Finance) and certified financial planner. He is the Director & Chief Financial Planner of holistic investment planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He Can be reached at ramalingam@holisticinvestment.in
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