In this article, we will discuss five common mistakes to avoid when filing income tax.
The last date for filing of tax returns for individual taxpayers is July 31. Paying income tax is a mandatory obligation for citizens and businesses in most countries worldwide. It is essential to file and pay your taxes on time and accurately to avoid penalties and legal consequences. However, some common mistakes can lead to unnecessary tax burdens, audit notices, and other issues. In this article, we will discuss five common mistakes to avoid when filing income tax. The income tax return form requires taxpayers to report their income from various sources such as salary, rental income, interest income, and capital gains, among others. The form also requires taxpayers to report their tax deductions, such as investments under Section 80C, medical expenses under Section 80D, and others.
Every taxable person is required to report all his income sources that are taxable and tax-exempt using the correct ITR form applicable to them. If the ITR is filed using the wrong form, then the return will be termed as ‘defective’. Mistakes made while filing an income tax return not only make one’s return invalid, but may also lead the person to be liable for penalty and prosecution.
Here are five things you have to keep in mind while filling out an income tax return:
1. Missing the Deadline: The most common mistake that people make while filing their income tax returns is missing the deadline. The deadline for filing income tax returns is usually July 31st of every financial year. If you fail to file your returns by the deadline, you may be liable to pay a penalty.
2. Not Checking Form 26AS: Form 26AS is a document that contains details of all the taxes that have been deducted from your income during the financial year. It is important to check Form 26AS before filing your income tax returns to ensure that all the tax deductions have been correctly accounted for.
3. Not Including All Income: Another common mistake is not including all sources of income while filing income tax returns. All sources of income, including salary, interest income, rental income, and capital gains, should be included in your tax returns.
4. Not Claiming Deductions: Tax deductions are an important way to reduce your tax liability. Many people forget to claim deductions such as those for investments under Section 80C or medical expenses under Section 80D. Make sure to claim all the deductions that you are eligible for.
5. Incorrect Filing of Tax Forms: Filing the wrong tax form or filling it out incorrectly can lead to errors and penalties. Make sure to use the correct form based on your source of income, and double-check all the details before submitting the form.
As per Amit Gupta, MD, SAG Infotech, filing your taxes can be a complex process, and mistakes can be costly. If you are unsure about how to file your taxes correctly or have complex tax situations, consider seeking the help of a professional tax preparer or accountant. They can help you identify deductions and credits you may have missed and ensure that you file your taxes accurately and on time.
In conclusion, avoiding these common mistakes can help you file your income tax returns accurately, avoid penalties and legal issues, and minimise your tax burden. Keep accurate records, report all income sources, claim only eligible deductions, file on time, and seek professional help if needed. By following these simple steps, you can stay on the right side of the law and ensure that you pay only what you owe in taxes.
Source: https://www.indiatoday.in/information/story/5-common-mistakes-to-avoid-while-filing-your-income-tax-returns-2351933-2023-03-27
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