Haven’t yet filed your income tax returns? Avoid these five mistakes
Haven’t filed a tax return yet? Avoid these five mistakes
New Delhi: Many taxpayers now file their income tax returns themselves. However, this often leads to complications in tax filing and can result in a loss.
So, even though tax filing by yourself should be encouraged, you should not make some mistakes to avoid any problems. Here are five common mistakes to avoid when filing income tax:
Filing RTI is an important financial year. Here are some mistakes you should avoid when filing your tax return:
1. Incorrect RTI form: There are different prescribed income tax forms for different types of taxpayers. ITR-1 (SAHAJ) applies only to resident natural persons with income up to Rs 50 lakh and only to those with income from wages, home ownership and other sources. ITR-3 applies to business or professional income and ITR-4 (SUGAM) to the presumptive tax method as for the self-employed. Taxpayers should be careful when choosing the RTI form. A wrong form can make the filed tax return defective and the taxpayer may receive a notice from the tax department to re-file the return.
2. Do not report all sources of income: When filing the RTI, it is important to consider all sources of income, whether it is previous or current employment or investment income, FD interest rate income, income from ” interest on savings accounts, etc. and file them under the appropriate RTI form. If no income is reported, a discrepancy will be reflected in the TDS Certificate (Form 16) and Form 26AS. The tax service can send a notice of formal notice inviting the taxpayer to pay an additional tax in this case.
3. Do not declare income from capital gains: The RTI requires full details of the sale of capital assets, the purchase and the expenses to calculate the capital gain. In the event that a taxpayer makes investments to claim a capital gains exemption, details of the investment and capital gains exemption must be provided by the taxpayer.
4. Income of the non-clubbed minor: In the event that taxpayers have made investments on behalf of their minor child, they should include income such as interest income from the child as part of the income. Income clubbing is usually done with the parent with the highest income. Taxpayers can claim a deduction of up to Rs 1,500 per child up to two children.
5. Fail to verify TDS details with Form 26AS: Form 26AS includes a summary of TDS and income tax payments such as salary, interest, or the sale of real estate. Before filing the ITR, one should verify the TDS and tax payments with Form 26AS. Form 26AS can be downloaded from the Income Tax Electronic Filing website.