Filing Taxes and avoiding common mistakes while filing an income tax return is a hard task for many out there and when it is coupled with new rules and regulations, it instantly becomes much harder than it was supposed to be earlier.
Getting details of your Taxes, calculation balances and filling out forms here and there can be a dusky task and amidst all this, one can get confused and chances for errors open up quite easily. So, below is the list of most commonly committed errors that need to be taken care of :
Incorrect Personal Details
Every year a large number of people file returns which eventually gets rejected because people tend to fill in incorrect personal details like name, bank account number, IFSC code, and address. This creates a lot of problems and results in a delay in refunds.
People tend to miss out certain incomes by mistake like :
- Interest from bank FD
- Income from investments made in the name of children
- Income from previous employees and much more.
Mistakes in Claiming Deductions Under Section 80c
It’s a wrong notion that the employer’s contribution to EPF has to be included in getting the benefits under section 80C. Similarly, only the principal repaid on housing loan is eligible for sec 80C. Much other misinformation leads to the rejection and increase of tax liability.
Interest Income on a Savings Account
According to Section 80TTA, interest received in savings account up to Rs 10000/- per year is not taxable. But, while filing the income tax return, the interest received has to be mentioned as ‘Income from other sources’ and claim exemption.
Also, all the exempted income like the PPF interest, dividends, LTCG from equities, maturity proceeds of insurance policies needs to be mentioned separately under annexure of ITR. If not done so, it leads to excessive queries later on.
Failure to Account for More Than Two Property
There are many people who own more than 2 properties which might be either occupied or vacant. According to the amendment in the Income Tax Act 1961, two properties can be claimed as self-occupied. And people have to pay the tax for the rest of the properties at realizable municipal rates after 30% for taxes and repairs get subtracted.
The discrepancy in TDS details
Income tax returns should be filed only after verifying Form 26AS credit of TDS held with the IT Department. Credit for TDS deducted has been mentioned in Form 26AS otherwise it leads to a huge mess.
It might happen when someone who has deducted TDS does not deposit the same with the IT Department or mentions the PAN incorrectly, that amount will not reflect in form 26AS. This might lead to a huge default.
Failure to pay advance tax or self-assessment tax
The individual with income sources from where the TDS is not applicable is required to calculate the tax liability and pay Advance tax or self-assessment tax before 31st March (end of the financial year).
If not done, it leads to the imposition of a penalty of 1% per month from 01 Apr that is the next financial year. Often people commit the mistake of filing the income tax returns without paying the applicable penalty.