ITR Filing 2024: Common Mistakes to Avoid When Filing Tax Returns
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Last Updated: 9th July 2024 - 05:20 pm
A responsible citizen must file income tax return on time. The deadline for filing tax returns for individual taxpayers is 31st July of the assessment year. Waiting until the last minute and rushing to file can lead to errors in the information you disclose which could negatively affect your tax return. You can file your returns either manually or online. Since the financial year 2016-17 e-filing has become mandatory if you're claiming a refund or if your total income exceeds ₹2,50,000. However, under the new tax rules this threshold has been raised to ₹3,00,000. However, there are certain mistakes to avoid to ensure accuracy and compliance. You should be aware of common mistakes like incorrect information, missing deadlines and not declaring all income sources which may lead to penalties.
Top mistakes to avoid during ITR filing
(1) Failing to Meet the Deadline
One common mistake when filing ITR is missing the deadline. For individuals, the last date to file is July 31, 2024. If you miss this deadline you could face penalties from ₹1,000 to ₹10,000, depending on how late you file. Additionally, filing late might mean you miss out on certain deductions.
(2) Providing inaccurate personal information
It's important to provide accurate personal information such as your name, address, email, phone number, PAN and date of birth when filing your income tax return. These details should match exactly with what's on your PAN card. If you're expecting a refund ensure that your bank details like account number and IFSC code are correctly entered. This ensures that your refund is processed smoothly and without delays. Taking care with these details helps you receive any refunds promptly and without any complications.
(3) Choosing the incorrect ITR form
Choosing the right ITR or Income Tax Return form is important because each form is meant for different types of taxpayers based on their income sources. Using the wrong form could lead to your tax return being rejected or needing to be filed again. For example, if you're a salaried person you should use ITR-1. If you're a professional or a small business owner, ITR-4 is the form you should use. It's about matching your income type with the form that fits best to avoid complications with your tax filing.
(4) Missing Income Sources
If you have any income besides your main source, you need to report it. This includes earnings like interest from savings or fixed deposits, rental income from property you own and gains from selling investments within a short period. Even if some of this income is not taxable you still need to disclose it. For instance, long term gains from stocks or mutual funds which are tax free up to ₹1 lakh must still be mentioned in the tax form's capital gains section. Failing to report these details could lead to queries from tax authorities later on. So, it's important to include all sources of income whether they're taxable or not when filing your taxes.
(5) Overlooking Form 26AS
Form 26AS is important because it lists all the taxes that have been deducted from your income and paid to the government using your PAN card. People often forget to look at this form which can cause differences between what they report as their income and what the government knows. Checking Form 26AS before filing taxes helps you make sure everything is correct and avoids any misunderstandings.
(6) Errors in Deductions and Exemptions
If the deductions and exemptions you claim on your taxes aren't accurate, it might mean you get a smaller refund or owe more in taxes. Make sure you understand all the deductions available under sections like 80C and 80D. It's important to only claim deductions you're eligible for and be ready to show proof if needed.
(7) Neglecting to Verify Your ITR
When filing your taxes, it's important to pay attention to a few key steps to avoid common mistakes. First, make sure to review your Form 26AS, which lists all taxes deducted and paid against your PAN. This helps ensure that the income you report matches what has been deducted, preventing discrepancies. Secondly, be thorough with deductions like those under sections 80C (for investments) and 80D (for health insurance). Claim only those you qualify for to avoid issues later on. Finally, after filing your tax return don't forget to verify it. This step is crucial to ensure your return is officially accepted. You can verify online using methods like Aadhaar OTP or through net banking or by sending a signed copy to the tax office. By following these steps you can file your taxes accurately, avoid penalties and make sure you receive any refunds or benefits you're entitled to.
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