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Mistakes to Avoid While Filing Your Income Tax Return (ITR)

Filing your Income Tax Return (ITR) is a crucial financial obligation that every taxpayer must fulfill. However, lack of awareness and understanding of the process can lead to several mistakes that may result in penalties and interest charges. To ensure a smooth and error-free ITR filing experience, it is essential to be aware of the common mistakes and take necessary precautions. In this article, we will discuss the most common mistakes to avoid while filing your ITR and provide you with valuable tips to ensure accurate and hassle-free tax return submission.

Table of Contents

  1. Using the Wrong ITR Form
  2. Not Reconciling Your ITR with Your Form 26AS
  3. Submitting Incorrect Bank Details
  4. Failing to Verify Your ITR
  5. Not Filing a Revised ITR
  6. Conclusion

1. Using the Wrong ITR Form

One of the most common mistakes taxpayers make while filing their ITR is using the wrong form. Different types of ITR forms are available, and it is essential to choose the correct form based on the categories of income you are reporting. Filing the wrong ITR form can lead to the rejection of your tax return by the Income Tax Department.

Here is a preview of some of the common ITR forms available for individuals:

ITR Form

Applicable For

ITR-1

Resident individuals with income up to ₹50 lakhs from:
- Salary or pension
- One house property
- Other sources

ITR-2

Income exceeding ₹50 lakhs from the following sources:
- Salary or pension
- More than one house property
- Capital gains
- Foreign assets
- Agriculture
- Directorship in a company
- Unlisted equity shares

ITR-3

Income from the following sources:
- Business or profession
- Partnership in a firm
- All other sources of income including speculative income

ITR-4 (Sugam)

Presumptive income under section 44AD, section 44ADA, and section 44AE of the Income Tax Act, 1961

It is crucial to carefully assess your income sources and choose the appropriate ITR form to avoid any complications during the filing process.

2. Not Reconciling Your ITR with Your Form 26AS

Form 26AS is a crucial document that contains details of your income and the taxes deducted at source (TDS) and tax collected at source (TCS). Failing to reconcile your ITR with your Form 26AS can result in discrepancies and may lead to scrutiny by the Income Tax Department.

It is essential to cross-verify the details mentioned in your ITR with the information available in your Form 26AS. Ensure that all the income sources, TDS, TCS, and advance tax details are correctly reflected in both documents. The recently introduced Annual Information Statement (AIS) by the Income Tax Department provides a comprehensive overview of the particulars in your Form 26AS, which can be utilized to ensure accurate reporting in your ITR.

3. Submitting Incorrect Bank Details

Including accurate bank account details in your Income Tax Return is crucial for receiving tax refunds, if applicable. If you enter incomplete or incorrect bank details, you may face difficulties in receiving the tax refund due to you.

A tax refund arises when the tax deducted or collected at source is higher than your actual tax liability. In such cases, the Income Tax Department refunds the excess amount directly to your bank account. To ensure a smooth refund process, it is essential to verify that the bank details mentioned in your ITR are accurate and up-to-date.

4. Failing to Verify Your ITR

After completing your ITR filing and submitting the form online, it is crucial to verify the return and submit the tax verification form ITR-V. Failing to verify your tax return within the specified time frame can render your ITR invalid, even if you filed it on time.

You have two options for verifying your ITR. You can e-verify the return and submit the ITR-V form online, or you can send a signed copy of the ITR-V form to the Centralized Processing Center (CPC) of the Income Tax Department in Bangalore within 120 days of filing your return. Verifying your tax return is a critical step to ensure its validity and completion.

5. Not Filing a Revised ITR

In case you realize that you have made errors or mistakes in your ITR and have already submitted it, it is essential to rectify the situation by filing a revised ITR. A revised tax return can be filed at any time before the end of the relevant assessment year.

If you discover that you have failed to submit essential details or have provided incorrect information in your original ITR, it is crucial to file a revised return within the specified due date. Failing to do so may result in penalties and other consequences associated with incorrect details in your tax return.

Conclusion

Filing your Income Tax Return accurately and on time is crucial to avoid penalties and interest charges. By being aware of the common mistakes discussed in this article, you can ensure a smooth and error-free ITR filing experience. Remember to choose the correct ITR form, reconcile your ITR with your Form 26AS, provide accurate bank details, verify your ITR, and file a revised ITR if necessary. By following these guidelines, you can navigate the ITR filing process with confidence and avoid unnecessary complications.

 

Remember, filing your ITR is not just a legal obligation but also an opportunity to assess your financial health and optimize your tax liability. If you are unsure about any aspect of the ITR filing process, consider seeking professional assistance from a qualified tax advisor or chartered accountant. With their expertise, you can ensure accurate and compliant tax return submission while maximizing your tax benefits.

 

author

The Tax Heaven

Mr.Vishwas Agarwal✍📊, a seasoned Chartered Accountant 📈💼 and the co-founder & CEO of THE TAX HEAVEN, brings 10 years of expertise in financial management and taxation. Specializing in ITR filing 📑🗃, GST returns 📈💼, and income tax advisory. He offers astute financial guidance and compliance solutions to individuals and businesses alike. Their passion for simplifying complex financial concepts into actionable insights empowers readers with valuable knowledge for informed decision-making. Through insightful blog content, he aims to demystify financial complexities, offering practical advice and tips to navigate the intricate world of finance and taxation.

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