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Business
26 Jul 2017

These mistakes in filing I-T returns will get you tax-notice

Filing taxes, what to look out for

Filing taxes shouldn't tax your brain. But we do end up making some mistakes every now and then, which later create problems.

The best thing to do is to keep a checklist and make sure that you have not made any such guffaws, while filing your income tax returns.

Here's a list of things you should look out for.

In context

Filing taxes, what to look out for
Don't file it in the wrong form

Form

Don't file it in the wrong form

According to the norms, an individual is required to cite all his/her sources of income and file I-T returns on the tax form applicable to him/her.

The first thing you should do is check that you are not filing your returns on a wrong form. If you end up doing so, your return will be considered "defective" and you will have to file again.

Interest

Don't forget to mention these

Don't forget to mention the interests accrued from your fixed deposits, recurring deposits, etc under the 'Income from other sources' section.

Remember, the interests, that you have garnered from fixed and recurring deposits, are going to be fully taxable in nature.

However, you are allowed to claim tax relief on the interest you have accrued from your savings bank account to a certain limit.

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On income tax  returns

ITR

On income tax returns

Many don't file ITR, as they have long term capital gains which don't attract taxation and without that, their gross total income remains below the tax-exempt income level.

However, according to recent amendments in section 139 (1) of the Act, if the exempted long term capital gains along with gross total income cross the minimum exemption ceiling, you will have to file ITR.

Minor

Clubbing incomes

According to the clubbing of income norms, one is required to add the income of certain individuals, like minor children, spouse etc., to his/her own income and pay tax on that total.

Usually, it's the income of a minor child, which gets bundled along with the income of his/her parent. Here, the parent can claim exemption of up to Rs. 1,500 under section 10(32).

Job switch must be reported

Job

Job switch must be reported

If you have changed your job during the financial year, your income from the previous job has to be reported along with the income of your present job.

One is also required to cite all of one's income regardless of the fact that some of it may be tax-free. One can claim exemptions but they have to be reported.

Bank

All of your bank accounts must be reported

A taxpayer has to report all his/her bank accounts that he/she held during the period for which the ITR is being filed

For A.Y. 2017-18, one needs to report the cash amount deposited in those bank accounts during the demonetization period, if the amount exceeded Rs. 2 lakh.

Also, if you have a spare residential establishment, you are required to report the expected rent.

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