The time has come to file income tax return. ITR-1, ITR-2 and ITR-4 among others have been made available online by the Income Tax Department with pre-filled data. Similarly, some salaried employees will soon receive their Form 16, which is an additional essential document required for filing returns. However, the due date for documenting individual government forms for assessment year 2023-24 (pertaining to FY 23) is July 31, so the right time to start the process is when you receive your Form 16.
Here are the most common mistakes made by taxpayers and how to avoid them:
- Make sure that you give accurate personal information like your name, PAN, email ID and telephone number. Any mistake can lead to delay or problems in handling your ITR.
- The nature of your income determines the type of ITR form to be filed. Make sure to select the correct structure to avoid any problems.
- While filing ITR, it is necessary to report all sources of income including business income, salary, rental income, interest income and capital gains. Failure to do so may result in punishment or legal action.
- For example, deductions on charitable donations, education loan interest and medical insurance can help reduce your taxable income. Be sure to guarantee all necessary deductions to reduce your valuation risk. However, this is applicable only if you file income tax under the previous system.
- It is important to check your ITR to be treated as recorded. You can do this electronically or by sending a marked duplicate of Form ITR-V to the Centralized Processing Center (CPC) within about 120 days of recording the ITR.
- Make sure you give the correct bank account details for any tax refund. Any error may result in the refund being delayed or never received.
- Cross-check the details given in Form 16 (provided by the business) with Form 26AS (a claim with tax credit). Any discrepancy should be rectified before documenting the ITR.
- Assuming you have any unrecognized resources including books or assets, ensure that you enter them in your ITR. Failure to do so may result in punishment or legal action.
- It is important to record ITR on time to avoid penalty and interest. The deadline for filing ITR is July 31, but sometimes it can be extended till September 30.
- It is necessary to keep accurate records like receipts, invoices and bank statements to support your claims while filing ITR. In the event of a tax inquiry or assessment, these records can be helpful. By avoiding these common mistakes, you can avoid legal or financial problems and ensure that your ITR is filed correctly and on time.
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