As the July 31 deadline for tax filing approaches, salaried taxpayers should take care when submitting their Income Tax Returns (ITR) to ensure smooth processing and avoid potential issues. While many individuals file their ITR independently, others seek assistance from professionals. Regardless of the approach, minor mistakes can lead to notices from tax authorities and potential fines. Common errors include inaccuracies in personal information, incorrect tax forms, and neglecting to verify Form 26AS.
Furthermore, some taxpayers fail to report income from additional sources or exempt income, while others overlook providing complete bank details or neglect to e-verify their ITR. It’s crucial for taxpayers to avoid these common pitfalls to ensure compliance and avoid penalties.
It is essential to use the appropriate ITR form to accurately report all taxable and tax-exempt sources of income. For instance, salaried individuals earning gross income under Rs. 50 lakh and without capital gains should use ITR 1. Using an incorrect form could lead to penalties and render the tax return defective.
Income from sources like savings account interest or dividends should be reported under Section 56 of the Income Tax Act. Failure to report such earnings can lead to complications. Even exempt income, such as capital gains from selling a home and reinvesting in another under section 54, must be disclosed in your tax return.
Form 26AS provides a comprehensive summary of your income, TDS (Tax Deducted at Source), self-assessed taxes paid, and advance taxes. It’s crucial to cross-check this information with your employer’s Form 16. Errors can result in reduced refunds or higher tax liabilities.
It’s mandatory to e-verify your ITR within 30 days of submission. The income tax department does not process any ITR that hasn’t been e-verified, making it invalid. Ignoring verification notices can lead to penalties for non-compliance.
Provide accurate banking information, including name, IFSC code, and account number, to ensure timely processing of refunds. Incorrect details often cause delays in receiving refunds. Double-check your bank account information to avoid processing issues.
These are essential considerations during the ITR filing process to ensure compliance and avoid potential penalties.
