Income tax return: 10 mistakes to avoid while filing ITR

So, taxpayers should be careful while choosing the ITR form. A wrong form can render the tax return filed defective and the taxpayer may receive a notice to file the return once again.

While filing the returns, one must ensure to provide the correct assessment year. For FY 2022-23 the correct corresponding AY is 2023-24. Mentioning the wrong AY increases the chances of double taxation and attracts unnecessary penalties.

The form 26AS carries a summary of TDS and tax payments on the income such as salary, interest, or sale of immovable property. Before filing, one should verify the TDS and tax payments with form 26AS.

A taxpayer should declare all their bank accounts in India except dormant accounts. The taxpayer can choose the bank account in which they want to get their refund credited.

While computing the ITR, it is vital to take into account all sources of income whether from the previous or current employment or income from investments and file it under the appropriate ITR form. If any income (from previous job) is not reported, then a discrepancy is bound to reflect in the TDS certificate (Form 16) and Form 26AS. The tax department can send a tax demand notice asking taxpayer to pay additional tax dues, if any.

The ITR requires complete details of the sale of capital assets, purchase and expenses to calculate the capital gain. Also, in case the taxpayer makes investments to claim capital gains exemption, the details of the investment and capital gains exemption should be given.

A taxpayer should report interest income from fixed deposits, savings account, post office saving schemes, bonds and other investments. The interest from savings accounts is also eligible for tax deduction up to Rs 10,000 for taxpayers who less than 60 years of age. In the case of senior citizens (60 years and above), the interest from fixed deposits, savings accounts and post office deposits is eligible for tax deduction up to Rs 50,000.

In case the taxpayers have made any investments in the minor child’s name, they should include the income such as interest income as part of the income. The clubbing of income is generally with the parent whose income is higher. Taxpayers can can claim a deduction of up to Rs 1,500 per child up to two children.

Entering incorrect details

The ITR forms carry several rows and columns that need to be filled out at the time of filing one’s income tax returns. The details have to be entered in a particular format, which if not done properly can lead to errors.

Filing returns inaccurately in case of more than one Form 16

In case an employee has more than one Form 16, he/she should consolidate all the incomes and thereafter compute the tax liability according to the applicable slab rate.