Income Tax Return Filing: 10 Mistakes To Avoid When Filing ITR For AY 2024-25
- April 25, 2024
- CA Chandan Agarwal's Office
Filing ITR enables you to claim tax refunds for excess taxes paid and credits for taxes deducted at source, while also avoiding penalties for non-compliance.
Income Tax Return Filing: Filing your ITR can seem complex, but by avoiding some common mistakes you can make the process smoother and ensure you get any refunds you’re due. Avoiding mistakes is crucial to ensure accuracy and prevent any potential issues with the income tax department.
Why ITR Filing Is Important?
Filing your ITR is crucial for multiple reasons. Primarily, it fulfills a legal obligation under the Income Tax Act, ensuring compliance with tax laws and regulations. Additionally, it documents your income from diverse sources, facilitating financial planning and providing necessary documentation for loans or visa applications.
Tax Refund
Filing ITR enables you to claim tax refunds for excess taxes paid and credits for taxes deducted at source, while also avoiding penalties for non-compliance. Furthermore, it serves as a mechanism for the government to verify financial transactions, promoting transparency in the tax system and facilitating better financial decision-making for individuals and entities alike.
Here are some key things to watch out for when filing your ITR for 2024:
- Incorrect Personal Information: Ensure that all personal details such as name, PAN (Permanent Account Number), address, and bank account details are accurately filled in the ITR form.
- Choosing the Wrong ITR Form: Select the appropriate ITR form based on your income sources and the nature of your income. Using the wrong form can lead to discrepancies and may attract penalties.
- Failure to Report all Income: Include all sources of income, including salary, interest income, rental income, capital gains, etc. Not reporting all income sources can lead to tax evasion penalties.
- Ignoring TDS (Tax Deducted at Source) Credits: Make sure to include TDS details from Form 16/16A provided by your employer or deductor. Failure to report TDS can result in tax notices and penalties.
- Incomplete Declarations of Investments and Deductions: Declare all investments, expenses, and deductions accurately to claim eligible tax benefits under sections like 80C, 80D, 80G, etc. Missing out on deductions can lead to higher tax liability.
- Ignoring Interest Income: Interest earned from savings accounts, fixed deposits, or other sources should be reported accurately. Failure to disclose interest income can lead to penalties.
- Not Reconciling Form 26AS: Cross-verify the details in your ITR with Form 26AS, which reflects TDS details, tax payments, and other relevant information. Discrepancies should be rectified before filing.
- Failing to File on Time: This is a big one! Don’t wait till the last minute to file. The due date for ITR filing can vary depending on your tax bracket, so be sure to check and set a reminder for yourself. Penalties can apply for late filing. Ensure timely filing of ITR by the due date to avoid penalties and interest on late filing. The due date varies based on the taxpayer’s category and can be extended by the government in certain cases.
- Not Verifying the ITR: After filing the ITR online, it’s essential to verify it either electronically (through Aadhaar OTP, net banking, etc.) or by sending a signed physical copy to the Income Tax Department within the specified time. Failure to verify may render the filing invalid. Don’t miss this step or your return will be considered invalid.
- Not Keeping Records: Maintain records of all documents, receipts, and proofs related to income, investments, and deductions. These may be required for verification or in case of any future tax scrutiny.
By being aware of these common mistakes and taking the time to file your ITR accurately, you can avoid unnecessary delays, penalties, and ensure a smoother tax filing experience.
Source: https://www.news18.com/business/income-tax-return-filing-10-mistakes-to-avoid-when-filing-itr-for-ay-2024-25-8864307.html
