ITR filing mistakes: While filing the Income Tax Return (ITR) for Assessment Year 2023-24, taxpayers should be careful not to commit these mistakes.
While filing the Income Tax Return (ITR) for Assessment Year 2023-24, taxpayers should be careful not to commit the following mistakes.
One common mistake is not submitting your income tax return (ITR) by the due date, which for individuals is 31st July of the assessment year unless extended by the government. However, if you fail to file your ITR by the due date, you will face penalties:
To avoid these penalties and charges, it is crucial to be punctual and ensure you meet the tax filing deadline.
Missing the deadline for filing returns is a serious mistake, but not filing your ITR at all can have even more severe consequences. Failure to file your ITR may result in penalties
The repercussions of these legal actions can be significant and include:
One of the most common mistakes when filing an ITR is using the wrong ITR form. Using an incorrect form leads to a defective filing that will be rejected by the Income Tax Department.
The choice of the appropriate ITR form primarily depends on your sources of income. For instance, if you are a salaried individual, you can file returns using ITR Form 1. However, if you have both salaried income and capital gains from investments, you should use ITR Form 2.
On the other hand, if you are self-employed with business profits as your income source, you should file your returns using ITR Form 3.
Choosing the correct ITR form might appear challenging, but there are certain ITR filing websites like Cleartax which auto-suggests the right ITR form for you based on your income details, so you dont have to worry about choosing the right form.
When filing income tax returns, it is crucial to pre-validate the bank account, especially if taxpayers are expecting a tax refund for any excess tax paid.
If not done, the Income Tax Department will not be able to credit the income tax refund owed to you.
A common tax filing mistake is forgetting to verify your income tax return. Often, taxpayers only realize this error when they receive a notice from the Income Tax Department. Rectifying this mistake can be time-consuming and costly.
Currently, taxpayers have 30 days to verify your ITR after submitting the completed ITR form.
Sometimes, people make errors when providing critical personal information in their Income Tax Returns. Examples of such mistakes include:
These seemingly harmless mistakes can lead to various issues with their tax filing.
For example, by providing incorrect bank account details or IFSC code, you will not receive any tax refunds you are entitled to.
Moreover, providing the correct email address and mobile number is vital, as the Income Tax Department often communicates important information through emails and SMS.
Therefore, it is essential to take the extra time to verify that all your personal information is correct before submitting your return.
Many taxpayers confuse the terms “Assessment Year” and “Financial Year.”
The “financial year” refers to the period during which income is earned. For example, if you are filing your ITR on or before July 31, 2023, you are filing returns for the income earned between April 1, 2022 to March 31, 2023. This period from April to March is known as the Financial Year 2022-23 or FY 2022-23.
Whereas, the Assessment Year is the year following the financial year when tax returns are filed. For example, if you file your tax returns in June or July 2023, the assessment year is 2023-24.
To remember this distinction, keep in mind that the Assessment Year always comes after the Financial Year. Therefore, for the current tax filing, you should choose the assessment year 2023-24.
When filing Income Tax Returns, it is crucial to disclose all sources of income. Even if you are a salaried individual, you might have additional income from various sources, such as rent from residential or commercial property, interest from savings or fixed deposit account, dividends from equity shares, capital gains, and more.
Disclosing all these income sources and providing their details is mandatory when filing ITR, even if such income is exempt from tax. Additionally, if you changed jobs during the financial year, ensure that you disclose income received from both your current and previous employers in your ITR.
Many tax filers omit details of capital gains and losses when submitting their ITRs. However, this mistake can have serious consequences.
According to current tax rules, taxpayers must disclose any and all capital gains or losses when filing their ITR. Previously, the omission of capital gains was challenging for tax authorities to track down. However, with improved systems, tax authorities are better equipped to identify such omissions.
Source: https://www.financialexpress.com/money/income-tax/from-new-tax-regime-to-old-avoid-top-9-income-tax-return-itr-filing-mistakes-in-ay-2023-24/3111648/
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