Despite taking utmost care, you may end up committing some mistakes while filing your tax return. Read this post to know about some common tax filing mistakes and what to do if served with income tax notices.
Filing income tax returns is mandatory in India for individuals whose income exceeds the basic tax exemption limit. The tax returns must be filed once a year, and the income tax department provides enough time for the taxpayers to file their returns without any hurry.
Furthermore, the e-Filing portal on the official website of the income tax department has made the whole income tax return filing process easy and hassle-free.
Unfortunately, taxpayers continue to commit some common yet avoidable errors while filing their returns that result in wrong filing and can attract income tax notices and sometimes even penalties.
Common Income Tax Filing Mistakes
Not Selecting The Right ITR Form
For individual taxpayers, there are seven different ITR forms to choose from. You can end up filing an incorrect tax return if you inadvertently select the wrong ITR form. Therefore, you need to be cautious while selecting the proper ITR form at the very beginning of your return filing process.
You can consider doing prior research about the kind of ITR form you would need depending upon your income source. Alternatively, you can also consider selecting the option “I don’t know which ITR form to Choose” inside the e-Filing portal and follow the on-screen instructions.
Undeclared Interest Income
Interest income comprises interests earned from savings bank accounts, fixed deposits, recurring deposits, etc. in a financial year. You must report all such income under the head “Income from other sources”. Failing to disclose interest income can result in discrepancies with the income tax records.
There should not be any mismatch between your IT return, Form 26AS and Form 16. Taxpayers should resolve any mismatch between these records before the final return submission. Unresolved mismatch of data can attract unnecessary attention of the taxmen, and you may end up paying penalties as well.
Every year the income tax department publishes the income tax filing deadline well in advance. Besides, the due date remains almost the same every year. Nevertheless, some people still tend to miss deadlines and expect to get an extension.
But individuals can now face a penalty of up to Rs 10,000 on failing to file returns on or before the due date. Therefore, it is advisable to adhere to the tax filing deadlines strictly.
Responding to IT Notices
In case of any discrepancies detected by the IT department in your return filing, they will send you a tax notice on your registered email id. You can also access such notices after logging in to your e-filing portal and vising the “Pending action” section.
Usually, you will get 30 days to respond to such notices. You should carefully go through the cause listed in the notice and draft your reply within the stipulated period on receiving such notices. You can also take the help of a professional to iron out any discrepancy.
You can even draft a revised ITR form after correcting your mistakes. The reply or your action will depend on the type of notice you have received.
In a nutshell, it is best to take time and file your tax return without any mistake to avoid unnecessary hassles in future.