Income Tax Return (2020): 10 common mistakes you must avoid while filing it
E-filing has made filing of tax returns easier than ever. Yet, we make such unconscious blunders during the procedure, most of which harm the outcome of filing.
Leaving the filing to be done at the last minute and then hurriedly typing in details is never a good idea. And sometimes, it’s the lack of knowledge that spoils the deal. Well, here’s a list to keep you wary of the most common mistakes that one makes while filing.
1. Selecting the wrong ITR form
This common mistake that most of us make inevitably tops the list. Choosing the wrong form results in the rejection of your ITR. While filing your ITR, make sure that you select the form that applies to your situation. Sometimes, using different forms might also be necessary. Make sure you keep yourself updated with the form numbers and details, considering the changes that the IT department makes.
2. Quoting an incorrect assessment year
You must quote the assessment year on the form correctly, or else you might be liable to double tax deductions and even penalties. For FY 2019-2020, the correct assessment year will be 2020-2021.
3. Entering inaccurate personal information
Make sure that you enter correct details which include your name, address, PAN, Aadhaar, etc. Entering the wrong details may cause a mismatch leading to rejection of your ITR.
4. Withholding sources of Income
You must disclose all the sources of income, be it exempted or not from the tax deduction. This includes entering income from interests into the form as well.
5. Not checking form 16 and Form 26AS
It is crucial to check the Form 16 for errors. You should cross-check it with your Form 26AS for details on tax payments as well. Be wary of any mismatches as it may cause discrepancies while filing your ITR.
6. Not filing a return if tax has been deducted
Not needing to file taxes if a deduction has been made is a widespread misconception. A recent amendment in the IT Act states that you need to file your returns if your gross income exceeds the exemption level, regardless of prior deductions.
7. Claiming deductions
Claiming a deduction of Rs. 1.5 lack is allowed by way of investments and expenses. It a tricky figure to calculate correctly. Taxpayers are often not aware of expenses that may be eligible for tax deductions. So, make sure that you do it correctly.
8. The myth of Donations being 100% exempt from tax deductions
Not all donations are exempted from tax deductions. Some are eligible for up to 100% exemption, while some are eligible for just 50%. Donation receipts need to be verified to claim deductions.
9. Not verifying the form after submission
The filing process is not considered complete if you do not verify it. Make sure to do it successfully within the given time frame.
10. Missing deadlines
The biggest mistake you can make is missing the deadline for filing. Search for the last date to submit your form and do it beforehand. By keeping it for the last minute, you will also make room for hurried typing errors.
Filing for tax return can be a tricky endeavor if you’re not equipped with the right tools and correct information. Make sure to avoid the aforementioned mistakes to avoid rejections, double deductions, and penalties.