Have you still not filed your income tax return for the financial year 2017-18? Do not forget that 31st July is the due date for filing the ITR. Although it has been extended this year till August. I hope you have done the PAN & Aadhar linkage.
While the ITR due date is approaching, if you have not filed ITR ever before, you are prone to making mistakes in your very first attempt. Here are some common mistakes you probably make when you need to efile tax, which could land you in a serious trouble or fetch you a notice from the Income Tax Department of India. Therefore, it is prudent to avoid all such mistakes.
Choose the wrong form for Filing ITR
There are different forms issued by the IT department, which are applicable to you and others as an individual and organization, respectively. You, as an individual, need to report all sources of your income to the IT department through your ITR form while ensuring that you choose to fill up the right form.If you unknowingly fill up the wrong ITR form and submit, it is canceled automatically and termed as defective. Also, you are asked to fill out the right ITR form and then submit it.
Failed to Report Interest Incomes
When online tax filing return for the previous financial year, make sure you report all your interest incomes, accrued or received from any source, including the interest you earned on your savings bank accounts, fixed deposits, recurring deposit(s), etc. You need to provide the required information under the head ‘Income from other sources’.
Remember! Any undeclared income or hidden source of income could lead to a serious trouble in the future and might fetch you a notice from the IT department.
Overlook ITR Filing
There are people who prefer not filing their income tax return, as they possess long-term capital gains that are tax exempted. By doing this, they reduce their total gross annual income, which sums up to below the income tax-exempt level.
The recent amendments to the IT section 139(1) state that one needs to file their income tax return if their gross total income along with the income from long-term capital gains crosses the minimum tax-exempt level.
Incomes not Clubbed
If we stick to the income clubbing rules, your total income tax liability is calculated, based on the total income of various family members (including that of your spouse and minor children). This also means that the amount of money you have to pay as the tax comprises the total income tax liability.
And, you have to report this total income when income tax filing for the particular financial year. Under the income tax sections 60 to 64, the income of a minor child has to be added to that of the parents.
Based on the clubbed income, an exemption of up to Rs. 1500 can also be availed, subject to the IT section 10(32).A failure of clubbing a minor child’s income requires you to pay your income tax dues with the interest applicable, including a penalty of 50% or 100% subject to underreporting or misreporting of the income.
Hiding Income from your Previous Job
There would always be a possibility that you changed your job in a financial year, so you need to mention in your ITR form your income from a previous employer too while filing your income tax return for that financial year.
Any discrepancy in your ITR form if you fail to mention you income from a previous employer does appear in the TDS you receive, i.e. form 16 and/or 26AS. This might fetch you a notice from the IT department of India or bring the taxmen to your doorstep.Certain penalties are also applicable, in case of not clubbing the income.
Anyone who has a certain source of income whether it is the house rent, interest earned onsavings account(s) in one or more banks, or a full-fledged business needs to report their exact gross annual income along with one or more tax-saving investmentsto the IT Department,whatsoever!This is in order to avoid penalties or a legal action.
P.S. Always be honest when filing your ITR to avoid troubles in the future.