Income Tax News: With seven Income Tax Return (ITR) forms, five types of income, dozens of deductions and exemptions, and various Income Tax (IT) rules, IT return filing can be intimidating for an average taxpayer. It should come as no surprise when errors are made when submitting the ITR. Some typical blunders that you might steer clear of when preparing your IT return are covered below.
Incorrect ITR Form
Depending on the taxpayer and type of income, there are seven ITR forms. If you choose the incorrect form, your return might not be accepted. You will probably receive a fault notice if the Income Tax agency discovers that you selected the incorrect form. Then, you’ll have a deadline to make the necessary corrections.
Inaccurate Personal Data
In an ITR, personal information can be found such as name, address, phone number, email, date of birth, PAN, etc. An incorrect email address, phone number, or address can cause a communication breakdown between the taxpayer and the IT department. For example, if your contact information is inaccurate, you won’t get the acknowledgement of your ITR submission. An incorrect PAN may result in the return being rejected, which may be followed by fines, penal interest, and maybe a tax audit.
Inaccurate year of Assessment
A layperson is frequently confused by the terms assessment year and financial year. An assessment year follows a financial year. Thus, the appropriate assessment year is 2023–24 when you report your income for the financial year 2022–2023. To put it simply, a financial year is the time frame for which you submit an ITR at the conclusion of the year. The ITR is submitted and “assessed” in the next year, hence the phrase “assessment year”.
Incomplete Bank Details
Every taxpayer is required to reveal every bank account, whether local and foreign. It is against the income tax regulations to fail to comply. Additionally, any bank account that was closed throughout the year needs to be included.
Not pre-validating the bank account
Your bank account may need to be pre-validated in order to avoid delays in processing your tax return. You can verify whether your bank account is pre-validated while submitting your ITR. The department won’t be able to credit your account with the refund amount if it isn’t.
Failing to disclose little earnings
The income earned by a minor child who is an earning member or who has investments in their name must be combined with the parent’s income. It would be against the tax laws to do otherwise.
Postponing paying taxes
The deadline for paying taxes is still July 31st, even though you have until July 31st to file your IT returns. Because of this, you should always determine your tax liability and pay your advance tax or self-assessment tax by the deadline. A 1% monthly interest charge is applied to the outstanding tax bill if this is not done.
Incorrect TDS information
If you are a salaried individual, you must collect Form 16 from your employer and download Form 26AS from the income tax website. To make sure there are no inconsistencies and that all income and TDS information is recorded in the IT department’s database, both of these documents need to be examined.
Not disclosing all of your earnings
Despite your salary, you might have received dividend income. In addition to your income from your profession, you may have realised some financial gains this year. All sources of income received during the year should be disclosed. Since PAN is connected to all incomes, any income that is not reported will be seen during the review and analysis of the return.
Not e-verifying
The filing of your IT return can appear finished once you send it in. To really finish the procedure, don’t forget to e-verify the return. The Central Processing Centre accepts signed hard copies, or you can e-verify with an Aadhaar OTP. To e-verify your ITR, you can also utilise your HDFC Bank NetBanking profile. Simply select the income tax filing option and then select “e-verify.” After that, you’ll be taken to the e-filing page so you may e-verify your tax return and create the electronic verification code.
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