Filing income tax returns can be a daunting task for almost everyone. However, in order to avoid penalties and legal issues, you must file them without fail. Here are some common mistakes that you can avoid while filing ITR.
Table of contents [Show]
Neglecting to File Taxes
Regardless of whether you fall under the taxable income bracket, it is essential to file your returns if your total income exceeds the basic exemption limit prescribed by the Income Tax Act.
Inaccurate Personal Information
Ensure that you provide accurate personal information such as your name, Permanent Account Number (PAN), address, and contact details. Double-check these details to avoid any errors that may cause delays or complications in the processing of your return.
Incorrect Computation of Income
Be diligent in calculating your total income correctly. Ensure that you include income from all sources, such as salary, interest, dividends, and rental income. Moreover, consider deductions and exemptions available under various sections of the Income Tax Act to arrive at the correct taxable income.
Failing to Report All Bank Accounts
The government has implemented stringent measures to curb tax evasion, including the reporting of all bank accounts held by taxpayers. Failure to disclose such accounts can result in penalties or legal repercussions.
Ignoring Form 26AS
Form 26AS is a consolidated statement that reflects all taxes deducted from your income and any tax credits available to you. Neglecting to review Form 26AS before filing your return can lead to discrepancies and delays in receiving tax refunds. Verify this form to ensure the accuracy of your tax payment details.
Overlooking Deductions and Exemptions
The Indian Income Tax Act offers a number of exemptions and deductions, such as those under Section 80C for investments, Section 80D for health insurance premiums, and Section 24 for home loan interest. Failing to claim these deductions and exemptions can result in higher tax liability. Stay informed about these provisions to maximize your tax benefits.
Incorrectly Filing Tax Slabs
It is crucial to understand the income tax slabs applicable to your income bracket. The rates and slabs may change from year to year, and not being aware of the latest tax slabs can result in under or overpayment of taxes. Stay updated with the current tax rates and slabs to ensure accurate filing.
By avoiding the common errors mentioned above, you can ensure a smooth and hassle-free tax filing process. Remember, timely and accurate tax filing contributes to your financial well-being and compliance with the law. If you realize your mistakes in time, you can also file a revised return.
Look up more articles here for a smooth first time tax-filing process. All the best!
