Filing income tax returns (ITRs) on time every year is very important. However, the process of filing income tax returns can be daunting for many individuals.
Most of them find the process confusing or complicated as it involves a lot of documents due to which they end up making mistakes in filing the ITRs.
Here are some mistakes to avoid while filing ITRs.
Incorrect personal details in the ITR form
Providing wrong personal details in the ITR form is a common mistake that should be avoided.
Errors in details like name, postal address, PAN details, Email ID, etc. could lead to ITR rejection by the I-T Department. It might also deprive individuals of receiving notifications from the department.
Also, an individual's name on the ITR form must match with that on their PAN card.
Not using the right ITR form for filing returns
Using the wrong ITR form for filing the returns is a grave mistake. The I-T Department issues different forms for different kinds of taxpayers.
There are several forms available as per different combinations and sources of incomes.
Not selecting the correct ITR form would complicate and delay the return filing process. One must ensure that they pick up the right one before filling it.
#3: Mentioning the wrong bank account details
While filing ITRs, mentioning the correct bank account details along with the IFSC (Indian Financial System Code) is important. Incorrect bank details could lead to problems if there's any refund due to the individual. Providing accurate bank details will make the ITR filing process smoother.
Not declaring all income sources in the ITR form
While filing income tax returns, individuals must disclose their income from all sources even if they aren't taxable along with their salary. These may include interest on savings accounts, fixed deposits, savings schemes, investments etc.
Investments made in the name of a minor child or spouse should also be declared.
The I-T Department may issue a notice if an individual doesn't declare all incomes.
Failure to file ITRs on time should be avoided
Failing to file income tax returns on time is another mistake most individuals make. Though individuals would have another chance to file returns, they will have to pay a penalty of Rs. 5,000-10,000.
Also, filing the returns means that the individual wouldn't have a way for rectification later on. Those who file ITRs late wouldn't be eligible for interest paid out on tax returns.