Filing income tax returns is no rocket science
Nobody likes to part with their hard earned money. However, it is the duty of every citizen to pay taxes and report the same honestly vide tax returns without resorting to subterfuges. Any inadvertent mistake in entering the information in the ITR form may lead to a tax payable/ refund situation or rendering the return as invalid, amounting to a defective return. Some typical mistakes that can be avoided while filing tax returns have been captured below:
Read the instructions: Tax filing instructions that typically form part of the ITR form need to be read with utmost care, else causing agony of issuance of a defective tax-return notice.
Non-filing of ITR form: It is a general myth that there is no requirement to file returns when TDS or advance taxes have been paid to the authorities. For instance, a taxpayer who falls under the highest income bracket and is earning income from fixed deposit account may not report and file an ITR under the impression that taxes at standard 10 per cent have already been deducted by the bankers.
Incorrect postal and email address: All information which is significant to the taxpayer is communicated by the authorities either vide mail or post. One should make sure that a valid and functional e-mail ID and postal address is provided to avoid missing out on intimations from the officials or unnecessary delays in refunds as running behind the tax department will be a tough ask.
Salary from multiple employers: Salaried persons who have worked under multiple employers during the same tax year need to be cautious while reporting income details and deductions claimed under Chapter VI-A. Ideally, they should make an adequate disclosure of the income and the deductions claimed under Chapter VI-A, failing which the latter employer may inadvertently give credit of the deductions already claimed under the previous employer, leading to a tax payable scenario.
Non-disclosure of saving bank interest income: Usually, taxpayers are under the impression that interest income from savings bank account up to `10,000 may not be required to be disclosed in the ITR form on the pretext that such income is not taxable. The same is required to be reported as income under the head ‘Income from Other Sources’ and simultaneously the relevant deductions under Section 80TTA can be availed by the tax payers.
Non-disclosure of exempt income: Income such as ‘dividend’ or such other income, which is exempt under provisions of Tax Treaties, is required to be reported as ‘Exempt Income’ in relevant annexure(s) of ITR forms even though it is exempt from taxes.
Incorrect TDS details: Mentioning the correct TDS details in the ITR form is of utmost importance so as to take proper credit of the taxes already deposited by the taxpayer to the authorities. The same should be verified from the tax credit statement (Form 26AS) downloaded from the e-filing website to avoid any kind of discrepancies.
Failure to dispatch ITR-V: The tax filing process would be completed only after the taxpayer submits the verification of return (in ITR-V) to CPC Bengaluru by ordinary or speed post within 120 days of filing of return, if no digital signature is being used. It is necessary to send the acknowledgement within the stipulated time else the return would be treated as null and void.
What is abundantly clear from the above is the fact that incorrect filing of tax returns will invite inevitable troubles. Thus, it is urged that the taxpayers be over cautious in their approach of filing income tax returns.