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Paying the taxes is important. Equally important is, filing your income tax returns irrespective of whether there is any amount to recover or not. According to the regulations imposed by the government, any person whose income is higher than the basic income limit should file ITR.
Nowadays, you can file your income tax returns the traditional way with all the paper work or you can opt for e-filing. But, filing ITR is a complex task involving a lot of details and documents. No wonder then that a lot of people make income tax mistakes during the process. The result is that the rejection of the ITR. In some cases, inaccuracies can also be treated as a criminal offence.
Thus, it is extremely important to maintain accuracy while filing the ITR. Here are some of the common mistakes that most people make.
Incorrect ITR Form: There are different ways in which tax is assessed for different people. Thus, they are also required to use different forms while filing the income tax returns. One of the most common income tax mistakes made while filing ITR is use of the incorrect form. Remember that if you use a wrong form, your returns will be treated as defective. So, make sure to understand the category under which you fall and the type of ITR form that you should use.
Ignoring the Income from Interests: When it comes to filing income tax returns, it is important to disclose the interest that you might have earned on the savings and other investments. It has often been cited that people tend to overlook or forget mentioning about these in the ITR forms. However, this is a major discrepancy and one that is not taken lightly. So, make sure to mention the interests that you may have earned from your various bank accounts or any other investments.
Forgetting the Mention Foreign Assets: If you own some assets on foreign shores, you need to disclose these while filing ITR. A lot of people tend to commit the income tax mistake of not disclosing these assets or just filling in a rough estimate of the value of these assets. This is not permissible. What’s more, you may even have to pay a fine if the tax department cites such discrepancies in your return documents. Disclose all the assets that you hold, irrespective of their location, in your ITR form along with their exact value.
Non Reconciliation of TDS with Form 26AS: The form 26AS comprises of the details of the tax deducted from your income and paid to the IT department as TDS. While filing the ITR, it is crucial that all the documents that contain the details of these prepaid taxes are reconciled with form 26AS. Inability to do so can cause the income tax department to treat your returns as defective and thus, send you a notice. Remember that you need Form 16 and Form 16A for calculating your income and matching it with the Form 26AS.
Inaccuracy in Calculation of Income from Properties: There are people who own more than one property. When calculating the taxes, it is compulsory that they include the taxes for all of these properties. However an income tax mistake that a lot of people make is that they only include the taxes for the properties that they have rented out and ignore the ones that may be vacant. This is totally against the regulations imposed by the government and is considered as a discrepancy. It is important that all the properties be taken into consideration while calculating taxes, irrespective of whether they are occupied or vacant.
Mentioning the Wrong Assessment Year: Though this may seem like an inconsequential mistake, it is really not recommended or taken lightly by the income tax department. In case, you mention a wrong assessment year, you may prey to hefty penalties and even double taxes. So, make sure that you double check the assessment year in your documents before filing the returns.
Income tax returns filing can be quite complicated which is why most people seek the help of a professional. However, if you want to do it without expert help, you surely can. All you need to remember is to avoid the aforesaid mistakes.