Avoid most common ITR filing mistakes

The due date to file ITR for the Financial Year 2019-20 has been further extended to December 31, 2020.

IT filing has to be done carefully without any mistakes. Else, the taxpayer will end up getting notices from the Income Tax department, leading up to penalties in some cases. ITR filing is mandatory for taxpayers who have tax dues. An individual exempt from paying tax can also file ITR voluntarily, serving as proof of income.

Filing tax returns at the last minute may result in entering incorrect information and mistakes. Here are some common ITR filing mistakes taxpayers are to avoid.

Using the incorrect form

The taxpayer should choose the correct form to file the ITR – the form based on the income slab that the taxpayer belongs to. Choosing the wrong form can result in not reporting all the required information and the income tax department can issue a notice for under-reporting the income. In case the taxpayer chooses the wrong form, a notice can be expected from the Income Tax department that needs to be rectified within the given deadline.

Choosing the Wrong Assessment Year

The Assessment Year has to be mentioned correctly while filing the ITR. Most people get confused with the terms Financial Year and Assessment Year. For FY 2019-20, the corresponding Assessment Year is 2020-21. Quoting the wrong assessment year may end up in double taxation, and unnecessary penalties.

Providing incorrect personal details

Personal information like name, postal address, email id, etc have to be double verified before submitting the return of income. The taxpayer has to check whether the details tally with those given in the PAN card. The taxpayer also has to ensure that the Aadhar number is updated on the return.

If the taxpayer is claiming a refund on the return, he / she has to ensure accurate bank details to get the refund processed & credited on time.

Not mentioning all sources of income

While filing ITR it is mandatory to report income received from sources such as rental income, income from savings accounts, interest from fixed deposits, income from short-term capital gains, etc. Income from every source must be disclosed regardless of nature – be it taxable or exempt. Some taxpayers might miss out on giving details of exempt income. Any discrepancy in income can easily be detected from Form 26AS.

Claiming fake deductions

Some taxpayers try to claim fake deductions or increase the present deduction to reduce tax liability. Wrong reporting leads to penalties and strict punitive measures.

Not reconciling Form 26AS and TDS certificates

Form 26AS has all the income details, TDS, advance tax paid by the taxpayer, self-assessment tax, etc. So, it is required to check Form 26AS before filing the ITR. The taxpayer’s employer might have deducted TDS on his salary. A salaried taxpayer must crosscheck the details on Form 16 issued by the employer with Form 26AS. If the TDS is not shown in Form 26AS, the taxpayer will not get credit for tax deductions not mentioned on Form 26AS.

Not filing the revised return

In case of any mistakes in the filed return, the taxpayer has to rectify them and file the revised return before the end of the relevant assessment year. The deadline to file a revised return for FY 2019-20 is March 31, 2021.

Not e-verifying the filed ITR

After e-filing the return, the taxpayer has to e-verify the ITR-V by net banking or the EVC process using the taxpayer’s authenticated mobile number and email address. The IT department will start processing the return only on receipt of the ITR-V. If the taxpayer is not able to e-verify for any reason, he can sign and send the ITR-V to the CPC via speed post. This has to be done within 120 days from the date of e-filing of a tax return.