Last updated: July 24th, 2024 2:21 PM

What are the common mistakes while Filing ITR?

The deadline for submitting Income Tax Returns for the fiscal year 2023-24 (Assessment Year 2024-25) is quickly approaching, with the due date set for July 31, 2023. Last-minute rush in filing can often result in the provision of inaccurate information, potentially leading to adverse effects on the return filing outcome. Errors in the income tax return submission can render the return void, possibly subjecting the individual to fines and legal action. Given the myriad of allowances, deductions, clauses, and regulations, it's quite easy to feel overwhelmed by the complexities of Income Tax laws. Hence, we've compiled a list of some frequent mistakes taxpayers make. Our guide aims to highlight these common mistakes while filing ITR, offering advice to help you steer clear of them.

Income Tax Return (ITR)

An Income Tax Return (ITR) form that taxpayers must submit to the income tax authorities to report their annual earnings, taxes paid, deductions claimed, and other relevant financial information and it's imperative to ensure accuracy to avoid mistakes while filing ITR. It's a comprehensive declaration that outlines the taxpayer's sources of income, including salaries, business profits, capital gains, and other forms of revenue, along with allowable deductions and exemptions under the tax laws. Filing an ITR is not only a statutory obligation for those whose income exceeds the basic exemption limit but also serves as a crucial document for financial verification purposes, aiding in loan approvals, visa applications, and more.

What are the common mistakes while filing ITR?

Here are some common mistakes that people often make while filing their ITR:

Filing Income Tax Returns (ITR) using an Incorrect Tax Form

Every taxpayer must disclose all taxable and tax-exempt income sources using the appropriate ITR form applicable to their circumstances. Filing the ITR with an incorrect form results in the return being labelled 'defective.' The taxpayer's choice of the correct ITR form depends on the sources of income earned. Opting for the wrong form may render the return defective or entirely invalid. Hence, selecting the correct ITR form is crucial. IndiaFilings experts are available to assist you in selecting the right form.

Mentioning Incorrect Personal or Correspondence Details

Taxpayers must exercise caution when furnishing their PAN, Aadhaar, and address details and ensure accuracy in email IDs and contact numbers. It is imperative to verify that these particulars align with the information in their PAN. Notably, the Income Tax Department communicates notices to the address listed in the last ITR. Failure to provide the correct address may result in the delivery of notices to an incorrect location.

• Additionally, it's crucial to recognize that the ITR-V will be dispatched to the email address specified in the ITR. Furthermore, reminders for E-Verification and intimation texts will be sent to the mobile number provided in the ITR.
• Moreover, providing the correct Bank Account Number and IFS code is vital to expedite refunds from the Income Tax Department.

Not reporting interest income from savings bank accounts, Fixed deposits, etc.

Many taxpayers inadvertently overlook reporting interest income from savings bank accounts, fixed deposits, and similar sources under the 'Income from other sources' category in their tax filings. Notably, income from savings accounts becomes taxable when it exceeds Rs. 10,000 annually. Initially, the interest received must be disclosed under 'Income from other sources,' followed by the possibility of claiming deductions on savings account interest under section 80TTA for individuals below 60.

• However, senior or super senior citizens can claim deductions up to Rs. 50,000 under section 80TTB from the total interest income earned in a financial year, including fixed deposit interest.
• It's essential to recognize that interest income from fixed deposits must be reported annually to the Income Tax Department under the 'Income from other sources' category, irrespective of maturity status. Taxpayers can track the interest credited to their accounts by referring to their fixed deposit statements.
• Moreover, when Tax Deducted at Source (TDS) is deducted by the bank for interest credited, taxpayers can claim the same in their Income Tax Returns (ITR) upon its reflection in their Form-26AS statement. Taxpayers must remain vigilant about these details to ensure accurate tax filings.

Not Reporting Income from Multiple Employers in ITR

When filing Income Tax Returns (ITR), individuals who have changed jobs within the financial year must include earnings from their previous and current employment. Failing to report income from any job could result in inconsistencies between the Tax Deducted at Source (TDS) certificate and Form 26AS.