6 most common mistakes to avoid in your Income Tax Return

6 most common mistakes to avoid while filing Income Tax Return (ITR)

It’s so easy to file income tax return now, isn’t it? Soft wares which perform calculations are now available. However, you need to put in right numbers and informations at the right places. Often people make some careless mistakes while e-filing their Income Tax Return which can either make their returns defective or create hurdles in getting income tax refund. Here is the list of some common mistakes one should avoid while e-filing ITR.

• Incorrect Basic Details:

  It’s important that you mention accurate basic details such as PAN, personal information, e-mail id. quoting wrong PAN means that your return will be rejected by the income tax department since the name for the given PAN in their records will not match with the name and PAN that you have provided. Taxpayer’s name and date of birth should match with the one mentioned on PAN card. So, make sure that you provide all the information mentioned correctly.

• Choosing Incorrect ITR Form:
  It is critical that you select and file the ITR Form applicable to you. ITR forms are based on different sources or combination of incomes. For example If you have only salary income, select ITR 1 but if you have salary income as well as capital gain than you need to select ITR 2. Filing return with  incorrect ITR form may lead to rejection of ITR. Therefore, it is very important that you choose a correct ITR Form. But, you do not need to worry about choosing the correct ITR if you are e-filing your return with Quicko.com since our software does that for you. Quicko determines the correct ITR for you based on the incomes and deductions that you have provided.

• Fail to list all sources of Income:

   Taxpayer must report all types of incomes TAXABLE as well as EXEMPT. It is a wrong believe that if an income is tax exempt, no need to report it. Some of the examples are sale of shares or mutual fund units, interest earned on a saving account or fixed deposit etc. Even though banks deduct TDS on fixed deposit interest, that does not mean you don’t mention the income in the ITR form. 

• Failing to claim deductions:

  One very common mistake is failing to claim tax deduction under section 80 of Income Tax Act. You may have made some investments or incurred some expenses which are allowed as deduction under chapter VI A, however you miss out on claiming the same. As a result, you will lose your hard earned money by way of taxes or worse you could miss out on a potential tax refund. So it is very important to mention all your deductions at the time of filing your income tax return.

• Checking your Tax Credits:

  One of the most important things to do before you e-File is to ensure that you have checked your ‘Form 26AS’ for any potential tax credits. Form-26AS contain details regarding incomes & taxes deducted from the same, advance tax, self-assessment tax etc. All these tax credits will help you in getting refund and avoid additional tax demands.

• Forgetting to Verify your ITR:

  Just e-Filing your ITR is not enough. The process of filing has not completed yet. Once you submit the return, you will receive ITR-V on your registered email address. If the return is filed online, without the Aadhaar number or digital signature, you will have to verify your return post e-Filing. You have two options. You could either send a physical signed copy of ITR-V to the CPC(Centralized Processing Centre) at Bangaluru within 120 days from date of filing return or you could simply e-Verify your income from the ease of your home/office. There are several ways to e-Verify your income tax return. If you forget to e-verify your income tax or fail to send ITR-V to CPC Bangalore then it will be considered as if you have not filed your ITR and the tax department will not process your ITR. You will have to e-File your income tax return once again.

• Incorrect Bank Account Details:

  It is very important to furnish correct bank account details in your tax return. As per income tax law, taxpayer needs to disclose all active bank accounts. Failure to disclose all bank accounts is one of the most common reason for income tax notices. If you are eligible for refund, it is all the more important to correctly denote primary bank account and submit accurate details such as bank, account number and IFSC.

In short, if you take into consideration the above mistakes and avoid them, you can easily file your ITR without any hassle. A return filed without any errors will essentially ensure a quick return.