Last Day to file ITR - 31st July 😲
Here are 10 mistakes you should avoid while filing ITR 🧵⤵️
#IncomeTax #Taxfiling #ITR
Here are 10 mistakes you should avoid while filing ITR 🧵⤵️
#IncomeTax #Taxfiling #ITR
1. Missing the due date for filing returns:
File your tax before the due date to avoid these penalties:
- Fee of up to Rs. 5,000
- Interest @ 1% per month on any unpaid taxes
- Delay in receiving a refund on any excess tax paid
File your tax before the due date to avoid these penalties:
- Fee of up to Rs. 5,000
- Interest @ 1% per month on any unpaid taxes
- Delay in receiving a refund on any excess tax paid
2. Selecting the wrong Assessment Year:
Many taxpayers get confused between the terms: “Assessment Year” and “Financial Year”
Financial/Previous Year: It refers to the time of the year during which the income is earned.
Many taxpayers get confused between the terms: “Assessment Year” and “Financial Year”
Financial/Previous Year: It refers to the time of the year during which the income is earned.
For example, if you are filing your ITR on or before 31st July, you are filing returns for the income earned between 1st April 2022 and 31st March 2023. i.e. Financial Year 2022-23.
Assessment Year: It refers to the year that follows the financial year. This is the period during which the tax returns are filed.
For example, if you are filing your tax returns in July 2023, the assessment year is 2023-24.
For example, if you are filing your tax returns in July 2023, the assessment year is 2023-24.
3. Providing incorrect personal information
In some cases, you might make a mistake when providing critical personal information that is included in your ITR.
Examples of such errors are:
- Incorrect PAN
- Wrong email ID or DOB
- Incorrect bank account number or IFSC code
In some cases, you might make a mistake when providing critical personal information that is included in your ITR.
Examples of such errors are:
- Incorrect PAN
- Wrong email ID or DOB
- Incorrect bank account number or IFSC code
- If you have given incorrect PAN details in your ITR, your filing will be rejected by the tax authorities.
This can result in penalties, penal interest charges, and even a tax audit.
This can result in penalties, penal interest charges, and even a tax audit.
- Providing your correct email address & mobile number is also imp.
This is bcoz IT dept often sends out important information through emails and SMS.
- If u provide incorrect bank account details or IFSC code in your ITR, any tax refunds you are entitled to will be delayed.
This is bcoz IT dept often sends out important information through emails and SMS.
- If u provide incorrect bank account details or IFSC code in your ITR, any tax refunds you are entitled to will be delayed.
4. Using the wrong ITR form :
Using the incorrect form results in a defective filing which will get rejected by the IT department later.
The choice of ITR form you need to use depends on your sources of income
Using the incorrect form results in a defective filing which will get rejected by the IT department later.
The choice of ITR form you need to use depends on your sources of income
For example,
- If you are a salaried individual, you can file returns using ITR Form 1.
- Salaried and have capital gains from investments, you will need to use ITR Form 2.
- Self-employed and have income from business, you will need to file your returns using ITR Form 3.
- If you are a salaried individual, you can file returns using ITR Form 1.
- Salaried and have capital gains from investments, you will need to use ITR Form 2.
- Self-employed and have income from business, you will need to file your returns using ITR Form 3.
5. Not disclosing all bank accounts:
Many taxpayers have multiple bank accounts but they sometimes forget to mention all the bank accounts in your ITR, which is against Income Tax rules.
Assesses must disclose details of all their domestic and foreign bank accounts.
Many taxpayers have multiple bank accounts but they sometimes forget to mention all the bank accounts in your ITR, which is against Income Tax rules.
Assesses must disclose details of all their domestic and foreign bank accounts.
6. Not declaring income earned by minor children:
As per current tax rules, any income earned by minor children is clubbed with the parent’s income when computing taxable income (the income of a minor child is treated the same as income earned by the parent).
As per current tax rules, any income earned by minor children is clubbed with the parent’s income when computing taxable income (the income of a minor child is treated the same as income earned by the parent).
Additionally, as per tax laws, if the minor child earns an income from work using special knowledge or talent, then the minor child has to file an ITR separately.
7. Not mentioning income from all sources:
At the time of filing ITR, make sure you disclose all of your sources of income.
Like your salary, rent from residential or commercial property, interest from FDs, dividends from Equity shares, capital gains, etc
At the time of filing ITR, make sure you disclose all of your sources of income.
Like your salary, rent from residential or commercial property, interest from FDs, dividends from Equity shares, capital gains, etc
Individuals are required to report foreign assets in their tax returns. These could be bank accounts, foreign stocks, including ESOPs or overseas trusts. It is necessary to report this carefully with their values.
If u have changed jobs in financial year, make sure u disclose income received frm ur current as well as previous employer in ur ITR.
Mentioning all of these different incomes along with their sources is mandatory at the time of filing ITR even if such income is exempt from tax.
Mentioning all of these different incomes along with their sources is mandatory at the time of filing ITR even if such income is exempt from tax.
8. Not claiming the benefit of donations, tax-saving investments:
Missing to claim the benefit of donations, and tax-saving investments are quite common.
Missing to claim the benefit of donations, and tax-saving investments are quite common.
9. Not disclosing capital gains and losses:
Under current tax rules, it is mandatory for assessees to disclose any/all capital gains or losses at the time of filing ITR.
Under current tax rules, it is mandatory for assessees to disclose any/all capital gains or losses at the time of filing ITR.
So, in case you have not disclosed your capital gains or losses from equities or MFs earlier, it is recommended that you take appropriate corrective measures immediately.
10. Omitting interest income from savings A/C:
Taxpayers often think that interest earned from savings a/c is exempted from tax.
In reality, if interest earned frm savings accounts exceeds Rs. 10k in a financial year, u are required to pay tax on the excess interest earned.
Taxpayers often think that interest earned from savings a/c is exempted from tax.
In reality, if interest earned frm savings accounts exceeds Rs. 10k in a financial year, u are required to pay tax on the excess interest earned.
Apart from these 10 mistakes, we recently did a Free Live Session on Tax Filing, which you can see on our youtube channel - bit.ly
This live session will definitely clear all your tax filing queries!
This live session will definitely clear all your tax filing queries!
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