Common mistakes made during tax filing

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Common mistakes made during tax filing

Mistakes made while filling up the Income-Tax return (ITR) form could cost us dearly. Let us see what some of the common mistakes are and how to avoid them.

Contact information

Nowadays the I-T Department sends all the communication on your email and mobile. So verify the email id and mobile number and ensure that they are the same you are presently using. Avoid giving email id and mobile number provided by your employer, as these will change when you leave your job.

Bank account details

Earlier, the cheque for the refund of income tax used to come by physical mail. But for the last few years the I-T department has stopped the practice of sending physical cheques for refund up to Rs 50,000, and credits it directly to your bank account. You are required to furnish details of the bank account where you want your income tax refund, if any, to be credited. If details are incorrect, the credit will be returned. You will then have to request for reissue of refund online, after correcting details of your bank accounts. Give details of the bank account that is active and not one that you may be are planning to planning to close within a year.

TAN of the tax deductor and taxes paid

Since the last few years taxpayers are not allowed to attach/upload any document with the ITR including Tax Deducted at Source (TDS) certificates. The credit for TDS is given by the I-T Department on the basis of TAN of the deductors, as per details reflecting in your Form 26AS. While filing the ITR you are required to generally key in these details yourself if you are using the excel utility provided by the I-T Department. So in case there is any mistake in the TAN number, you will not get the credit for TDS, when your return is processed. You may then have to file request for rectification after your return is processed for the TDS credit.

Even in case you are importing the data, please verify that the TDS is the same as per your Form 26AS, as there may be some difference between both these numbers.

Likewise, if you have paid any advance tax and/or self- assessment tax, you have to furnish details of such payments like challan number and BSR code. While processing your ITR, the credit for the taxes paid are given to you based on the corresponding details submitted by the receiving bank. In case of any error in the challan number, you will not get credit and may instead get a notice of demand for payment. Again, to get the credit of such taxes paid by you will have to again file request for rectification.

Details of capital gains

Salaried people who are filing ITR 2 or ITR 3 have to fill in details of the schedule of capital gains in Schedule CG. In respect of any taxable capital gains transaction you are required to pay the advance tax. The advance tax, in respect of such transaction, has to be paid before the due date following the transaction. The ITR 2 and ITR3 have columns to bifurcate capital gains on the basis of due dates of advance tax. Be careful while doing the bifurcation of the capital gains in the schedule. If, in case you commit any mistake, you may have to pay higher interest than what is due. Likewise, there are columns to bifurcate long-term capital gains and short-term capital gains, based on the rate at which tax is to be paid. Be careful while filling these details so as to ensure that you pay the correct tax.

Details of foreign bank accounts

If you have travelled abroad for education or as part of your job, you have to invariably open a bank account there. It may happen that while returning to India you might have withdrawn the full amount, but not closed the bank account. As per the present tax laws all those who have come back to India and, thus, have become resident for tax purposes, have to furnish details of such foreign bank accounts, even if there is no money is left in the account. Even if you are eligible to use ITR 1, if you have any bank account abroad, you should use ITR 2.

 

source: dnaindia