Income tax returns: Five common mistakes people make while filing

Filing of income tax returns (ITR) is one of the most important tasks for taxpayers. It is very important to file an error-free income tax return to avoid problems in future.

Here is a list of common mistakes people make while filing tax returns:

Incorrect form selection

Selection of incorrect forms often creates trouble. According to Manash Ghosh, tax lawyer, 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 a large number of 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 financial year. Assessment year is the year which will come after the financial year. Many taxpayers confuse ‘assessment year’ with ‘financial 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 Ghosh.

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.

The much-discussed revamped portal www.incometax.gov.in  would process IT returns faster said the department. It would also provide a modern, seamless experience to taxpayers.

Amid the second wave of Covid-19 and restrictions in different states, the Centre has extended the due date for filing ITR for the assessment year 2021-22. Instead of July 31, 2021, the last date for filing ITR of FY21 will be September 30, 2021.