Avoid these mistakes while filing your income-tax returns

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Filing of income tax returns (ITR) is one of the most important tasks for taxpayers. It is important to file an error-free ITR to avoid problems in future. The government has extended the last date for filing ITR for the assessment year 2021-22 till the end of December. The deadline has been extended due to the glitches on the new income tax portal which had made it difficult for taxpayers to complete the ITR filing process. Still if one fails to file returns within the new deadline, he or she may have to pay a late fee.

“During filing of ITR, in many cases general taxpayers overlook the sections of the Income Tax Act which allows tax exemptions. That’s why they miss the opportunity to save money. It is one of the most important things to keep in mind,” said Suman Nandi, a chartered accountant.

Here are some common mistakes people make while filing tax returns.

Incorrect form selection

The selection of incorrect forms creates trouble. According to Dipan Das, a chartered accountant, filing an income tax return using an incorrect form is treated as ‘defective’ under tax laws. In that case, the IT department is likely to send a defect notice to the taxpayer concerned.

Incorrect personal details

Over the past few years, the income tax department has simplified the income tax filing process. But many returns are rejected for incorrect personal details like name, bank account number, IFSC code and address every year. This leads to delays in refunds. So, be careful when you are filling ITR.

Wrong assessment year

In India, the period from April 1 to March 31 is known as the financial year. Assessment year is the year which comes after the financial year. Many taxpayers confuse assessment year with financial year. For example, most people would file ITR for the financial year 2020-21 now (2021-22) which is the assessment year.

Source of income

Every income from any source other than the primary source of income, whether it is taxable or exempt, must be disclosed. Any non-disclosure is a serious offence under tax laws.

Any mistake increases the possibility of the taxpayer receiving a notice from the Income Tax department. “In many cases we see that clients forget to mention all turnover details. It is most common. This type of error should be avoided,” said Manash Ghosh, an income tax lawyer.

Ignoring 26AS

The form 26AS is like an income tax passbook to taxpayers. It contains all transition information of taxpayers against Permanent Account Number (PAN). “Therefore, it is most important to check form 26AS before filing the ITR for every taxpayer,” added Manash Ghosh. Any negligence may lead to less refund or more taxes payable.

Job change

In case you switched jobs during the financial year, income from both the employers needs to be considered in the ITR. If it is not disclosed, you may receive a notice from the Income-tax department.