Anyone whose total taxable income exceeds the basic exemption limit is required to file an Income Tax Return (ITR) during the relevant assessment year. If your total taxable income also exceeds the tax-free limit, you may have to pay income tax. In addition to this, it is also mandatory to take care of your ITR filing obligations before the due date (which is generally July 31 of the assessment year for individuals who do not require an audit).
5 Common Mistakes to Avoid in ITR Filing
In case you have never filed your income tax returns previously, you may not be sure what to do or how to proceed. Without adequate awareness, you may also make several mistakes in your tax returns. Such ITR filing errors could, in turn, lead to penalties and interest charges.
To avoid all these pitfalls, it’s advisable to be aware of the common mistakes to avoid in ITR filing. Check out some such common ITR filing errors to watch out for.
- Using the Wrong ITR Form
Different types of ITR Forms are available, and you need to choose the right form based on the categories of income you are reporting. Filing the wrong ITR Form will make your return defective or invalid, and the Income Tax Department will reject it. So, ensure that you use the right ITR Form.
Here is a preview of some of the common ITR Forms available for individuals:
|ITR Form||Applicable For|
|ITR-1||Resident individuals with income up to ₹50 lakhs from: Salary or pension One house property Other sources|
|ITR-2||Income exceeding ₹50 lakhs from the following sources: Salary or pension More than one house property Capital gains Foreign assets Agriculture Directorship in a company Unlisted equity shares|
|ITR-3||Income from the following sources: Business or profession Partnership in a firm All other sources of income including speculative income|
|ITR-4 (Sugam)||Presumptive income under section 44AD, section 44ADA and section 44AE of the Income Tax Act, 1961|
- Not Reconciling Your ITR with Your Form 26AS
Form 26AS contains the details of your income and the taxes deducted at source (TDS) and tax collected at source (TCS). You need to check and verify this document to ensure that all the details of your income, TDS, TCS and advance tax are correct. Furthermore, your ITR must reflect all the income sources included in your Form 26AS, so there is no mismatch between the two.
The Income Tax Department has also recently introduced the Annual Information Statement (AIS), which offers a comprehensive overview of the particulars in your Form 26AS. You can also make use of the AIS to ensure that you submit correct and accurate details in your ITR.
- Submitting Incorrect Bank Details
You must also include the details of your bank account in your Income Tax Return. In case you enter incomplete or incorrect details, you may not be able to receive the tax refund due, if any. A tax refund is due if the tax deducted or collected at source is higher than your actual tax liability. So, if you have paid more taxes than necessary, the Income Tax Department will refund the extra sum back to your bank account directly. This is why you must verify that the bank details included in your ITR are accurate.
- Failing to Verify Your ITR
After you complete your ITR filing and submit the form online, you also need to verify the return and submit the tax verification form ITR-V. You can e-verify the return and submit the ITR-V Form online, or you can send a signed copy of the ITR-V Form to the Centralised Processing Center (CPC) of the IT Department in Bangalore within 120 days of filing your return. Failing to verify your tax return makes it invalid even if you completed the ITR filing on time.
- Not Filing a Revised ITR
In case you have made any errors or mistakes in your ITR and submitted the same, you will have to rectify this by filing a revised ITR. A revised tax return can be filed at any time before the end of the relevant assessment year. So, in case you realise that you have failed to submit some essential details or that you have filled in incorrect details, ensure that you file a revised return within the due date specified. This will help you avoid the penalties and other consequences of submitting incorrect details in your tax return.
If you are filing your tax returns for the first time, getting to know the common ITR filing errors outlined above can be helpful. Furthermore, even if you are not a beginner to ITR filing, you may not have been aware of some of these common errors. Now that you know what the common mistakes are, you can steer clear of them and file your tax returns correctly, without any lapses.