All the individual taxpayers have to file their tax returns and the last date to do so is July 31st of every assessment year. Most of the people tend to file returns at the last moment in a hurry which at times may lead to committing some mistakes from taxpayer's end. This will negatively impact on the outcome of filing of returns for the previous year during which the income was earned.
So, to avoid these mistakes it is better to be extra cautious and compute each of the earnings properly before filing for Income Tax Returns. The Income Tax Department in India has provided an option for taxpayers to either file their returns manually or through online. If the total income exceeds Rs 2,50,000 per annum then it is mandatory to file tax returns starting from the financial year 2016 - 2017.
Let's look out the List of Mistakes to Avoid While Filing Income Tax Returns.
Wrong Assessment Year
The term Assessment Year refers to the year during which the income earned during the financial year will be assessed and taxed as per the Income Tax Act of 1961. For Example: For the financial year 2018 - 2019, the correct corresponding assessment year will be 2019 - 2020.
It is very important to correctly mention the assessment year while filing your Income Tax returns. As quoting a wrong assessment year may increase the chances of increased taxation and you might end up paying unwanted penalties.
Proper Evaluation of Income from House Property
As we all are aware that with effect from the financial year 2019 - 2020, all the residential owners can show up to two of their residential properties as self- occupied and it will be treated as tax-free and the same can be mentioned while filing their income tax returns.
But if the taxpayer owns over two residential house properties which are not let out then they will have to declare the same as additional house properties as deemed to be let out and offer some assumed rental income for those properties to tax. Hence it is necessary to properly evaluate the income from house property before filing for tax returns.
Selection of Inappropriate Form
Some of the taxpayers will do this common mistake of selecting an inappropriate form for filing their income tax returns and the results of which will lead to failure of your income tax returns as the same will not be processed by the Income Tax Department.
First and foremost, a thing which a taxpayer has to understand is the nature of income or the category under which he or she as a taxpayer belongs to. If in case, you choose an incorrect return form, then you are likely to receive a defect notice from the IT department which requires to be rectified within the given time frame.
Stating Incorrect Personal Information
One should give detailed attention while filling their IT returns form and provide correct personal information like name, date of birth details, contact number, PAN card number, residential address, e-mail id and so on. It is important to ensure that the details which you fill in the returns form should match the ones in your PAN card.
If in case you are looking out for any refund, then ensure that you are providing the relevant bank account details to which you prefer your refund amount should be credited to by quoting the correct bank account number, bank branch name, IFSC code and so on to get the refund amount on time without facing any hassles.
Entering Accurate Details
The Income Tax Returns form comes in a prescribed format and will have a specific number of rows and columns while filling out the information in these forms, detailed attention needs to be provided. All the details should be entered in a particular format as mentioned by the income tax department to ease the process of filing.
If the details are not entered properly, then it can lead to errors in returns.
For Example: The particulars of date have to be entered in DD/MM/YYYY format only, if the tax filer writes the date in any other form then the same will be incorrect.