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At present, the season of filing Income Tax Return (ITR – Income Tax Return) is in full swing and lakhs of salaried people across the country are filing their returns. Tax experts say that filing ITR is a very responsible task, in which even a small carelessness can cause big trouble for you later.
Often people, in the rush to meet deadlines, give wrong information, hide any additional income they have or do not match the documents correctly. If you do this, you may receive a huge tax notice from the Income Tax Department, and you may also have to pay additional tax, heavy interest and penalty. Let us understand from tax experts about those 5 common mistakes which you should avoid at all costs:
1. The mistake of relying only on Form-16 (The Form-16 Myth)
Most of the salaried employees think that all their tax related information is present in Form-16 received from the company, hence they file ITR immediately on the basis of this only. According to experts, this is one of the most common and biggest mistakes.
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What to do: From your Income Tax Portal before submitting your return Annual Information Statement (AIS) And Form 26AS Be sure to download and match it.
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Why is it important: Many times, interest received from banks, stock market or mutual fund transactions and your deducted TDS are recorded in these forms, which are not included in your Form-16.
2. Hiding other sources of income (Extra Income)
While filing ITR, it is not enough to provide information only about your main salary. The Income Tax Department has complete data of every major financial transaction of yours. You must also include the following income while filing returns:
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Annual interest received from bank fixed deposits (FD) and savings accounts.
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Occurred by selling stock market or mutual funds Capital Gain.
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Rental income from house or shop.
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Earnings through part-time work, consultancy or freelancing.
Remember, hiding any legitimate income directly means falling into the category of tax evasion, on which the department takes immediate action.
3. Choosing the wrong tax regime without thinking
Today, taxpayers have two options – Old Tax Regime And New Tax Regime.
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Comparison is necessary: Many employees choose any one regime without calculating their deductions and investments. Due to this, they miss out on the benefits of tax exemption and have to pay more tax.
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Expert Tip: Before submitting the ITR form, compare your tax liability in both the systems through a tax calculator.
4. Claiming false deductions without evidence
Some people claim fictitious deductions even without any investment to save their taxes illegally.
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Documents required: Claim exemption under Section 80C (PPF, LIC, Tuition Fees), Section 80D (Mediclaim), or home loan interest only if you have valid and solid receipts.
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Danger of Rejection: If you do not have any valid documents during scrutiny, the department will reject your claims and you will have to pay tax along with penalty and interest.
5. Filling wrong bank details and forgetting e-verification
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Fear of stuck refund: While filing ITR, mention your active bank account number and IFSC code Enter with extreme caution. If even one digit is wrong in the bank details, your tax refund may hang in the balance. Also ensure that your account is ‘pre-validated’.
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E-verification is most important: Many people think that the work is completed once the ITR form is submitted. But as per the rules, the return has to be filed within the prescribed time limit (30 days under prevailing rules) after filing the return. E-Verification It is mandatory to do. If you do not verify it, your ITR will be considered invalid.