Mistakes to Avoid while filing ITR

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GST Doctor on Sat Apr 06 2024


Mistakes to Avoid while filing ITR

Arjuna is a new employee in his company "Kurukshetra Pvt Ltd". He is trying to file his ITR but having trouble, as he does not want to make mistakes which can lead to receive his Return late. He wants to know that what are the common mistakes he should avoid while filing ITR. He has a Guide 'Krishna', who is expert in the field. Arjuna approaches Krishna with his doubts and queries.

Arjuna- Hey Krishna! I am new in this company and want your guidance in path to file the ITR. Please tell me the mistakes I should avoid in filing ITR?

Krishna- Hey Arjuna! While filing your ITR, it is crucial to know the common mistakes so you can avoid them to get rid of penalties or complications. I will enlighten you with the knowledge of things not to do in filing ITR.

Arjuna- Yes Krishna! Please explain in details.

Krishna- Okay. Here are some of the most frequent errors which taxpayers usually make:

Using Incorrect Tax Form-

Every taxpayer is required to report all the income sources, be it taxable or exempted, using the correct ITR form applicable to them. If the ITR is filed using incorrect form, it will be termed as defective. If wrong form is chosen, it may lead to return being treated as defective or make the ITR invalid.

Referring Incorrect Personal or Correspondence Details-

Be very careful while filling out details such as PAN, Aadhaar, address, email and contact number. Make sure that these details match in your PAN card. Income Tax department will communicate through these modes provided by you. Incorrect details may lead to failed communication and even ex-parte orders.

Selecting Incorrect Assessment Year-

Distinguish between "Assessment Year" and "Financial Year". Assessment Year is the year following the Financial Year for which you are filing your return.

Filing ITR Without Proper Verification-

After you are done with e-filing the return, verify it using the appropriate method (e-verification or sending a signed ITR-V). If you skip this step, this can render your ITR invalid.

Filing Wrong Bank Details-

Ensure to report all your bank details including those with zero balance. Neglecting this can lead in penalties on you.

Not Reporting Interest Income from Saving Bank Accounts, Fixed Deposits-

You will have to show all your income sources, including interest income from saving accounts, FDs and other various investments if any. Avoiding this will result in discrepancies and penalties.

Not Reporting Last Income-

Arjuna! If you have changed jobs during the FY, make sure to report income from all jobs. Failing to do so will result in complexities.

Not Reconciling Form 26AS-

Verify your 26AS (Tax Credit Statement) to make sure to accurate reporting of income and taxes paid. Mismatching of information can result in complications.

Not checking the Bank Statement-

Review the bank statement to cross check income, deductions and TDS. Any discrepancy can cause issues in assessment.

Not Mentioning Exempted Income-

Even if some of your income is exempted from Tax, it should be mentioned in ITR. Exempted income can be your income from your Agricultural sources. Failing to mention exempted income will create questions in scrutiny.

Ignoring Eligible Deductions & Exemptions-

Take the advantage of available deductions and exemptions to deduct your tax liability. If you fail to claim, it will cause you paying more taxes than required.

Late Filing or Non-Filing-

Missing due date for filing ITR can lead in penalties. Always file return on time to avoid unnecessary hassles.

Not Verifying Form 26 AS & Form 16-

Verify form 26AS & Form 16 (TDS certificate) to make sure the accuracy of reporting of income and taxes paid. Mismatching of information can cause complexities.

Calculating Incorrect Tax Liabilities-

Always check your calculations twice in order to avoid errors in determining tax liabilities as incorrect calculations can lead to differences and we do not want that.

Providing Wrong Bank Details for Refunds-

Make sure that you provide correct bank details for receiving tax returns. Incorrect details can delay the process of receiving refunds.

Not Showing All Assets and Liabilities-

Declare all the assets such as properties, investments and liabilities such as loans in ITR. Concealing information can cause penalties.

Lack of Sufficient Records-

Keep all your records maintained such as financial transactions, investments and expenses. Organising records will help during the filing process and any subsequent scrutiny.

Arjuna! these are the mistakes you should avoid in order to file the ITR correctly.

Arjuna- Oh thanks Krishna. I understood and I will keep these in mind while filing. Now can you also explain me why it is so crucial to avoid such mistakes?

Krishna- Yes OfCourse Arjuna. Filing your ITR accurately is important for several reasons. I will explain you these:

Compliance with Tax Laws-

Correct filing will make sure compliance with tax laws, regulations and reporting requirements mandated by government. Fail to comply will result in penalties or legal questions.

To Avoid Penalties-

To provide incorrect information or filing wrong return can attract penalties from tax authorities. These penalties can affect your finances and tac liability overall.

To Validate Finacial Details-

ITR is a record of your income, deductions and investments. It will help validating your financial details and ensures transparency. Any differences will rise possibilities of scrutiny from authorities.

Claiming Refunds-

To file correct ITR allows you to claim you deserving refunds and deductions. Maitakes will lead in alteration of tax benefits and you will face financial loss.

Avoiding Legal Hassles-

Incorrect ITR can cause legal hassles which involve legal notices, audits or prosecution by department. Accurate and on time filing helps you avoiding such stress and legal complications.

So Arjuna, in a nut shell, avoiding mistakes during filing of ITR is essential to retain your financial integrity, comply with tax laws and safeguards you from penalties and legal complications so it is also important for your mental health.

Arjuna- Great Krishna. Now I am ready to avoid such things in ITR filing and on my way to file ITR better refunds.

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