ITR Filing 2023-24: Errors in ITR filing can cost taxpayers a lot
Filing ITR can be difficult for a taxpayer if he does not have sound knowledge or if he files his tax return without the help of any tax professional. However, taxpayers are careful and exercise due diligence while filing ITR. But when you are in a hurry to file your tax return before the deadline, there is a chance of making a serious mistake.
Although errors in ITR filing can be corrected, as any error can be corrected by filing a revised return or filing a rectification application, it demands more time and effort from the taxpayers, and no one likes to work twice as hard in the same job.
There is always a possibility of unintentional arithmetic errors or omissions while filling out an ITR, which is generally due to the taxpayer’s ignorance of income tax. However, by paying close attention, a taxpayer can greatly reduce or even eliminate the possibility of making errors on their return.
Below are some common mistakes that taxpayers make when filing the RTI:
Not filing ITR
One of the most common mistakes taxpayers make is not filing their Income Tax return (ITR). Many people believe that they do not need to file a return because their income is not taxable/exempt or has already been deducted.
Individual taxpayers are required to file an ITR if their taxable gross income exceeds the basic exemption limit. This limit is Rs 3 lakh for people above 60 years of age, Rs. 5 lakh for above 80 years and Rs. 2.5 lakh for everyone else.
Choosing the wrong ITR form
CBDT has issued seven ITR forms for various categories of taxpayers. The first and most important step in filing ITR is to select the appropriate ITR form based on the classification and nature of the taxpayer’s income. Filing an ITR in the wrong ITR form results in an invalid return.
How to decide on the right ITR forms?
RTI-1
For persons who are residents (other than ordinarily resident) and have total income up to Rs 50 lakh, income from wages, house ownership, other sources (interest etc.) and agricultural income up to Rs. 5 thousand.
RTI-2
For individuals and HUFs who do not have income from profits and profits of business or profession
RTI-3
For individuals and HUFs who earn income from profits and gains from business or profession.
RTI-4
For individuals, HUFs and companies (other than LLPs) who are residents and have total income up to Rs. 50 lakh and have income from business and profession computed under sections 44AD, 44ADA or 44AE and agricultural income up to Rs. 5 thousand.
RTI-5
For persons other than (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7.
RTI-6
For companies other than companies claiming exemption under section 11.
RTI-7
For persons, including companies, required to file returns under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only.
Bank account not validated
The Income Tax Department requires taxpayers to pre-validate their bank accounts on the e-filing portal so that tax refunds can be credited directly. This step confirms that the account is operational and controlled by the taxpayer, reducing errors and fraud.
Not performing electronic ITR verification
After filing an income tax return, taxpayers must verify it in order to complete the filing process. A declaration that has not been verified after submission is considered invalid. The Income Tax Department does not process unverified returns.
Electronic verification must be completed within 30 days to raise ITR.
Not disclosing Miscellaneous Income
Many taxpayers do not declare their miscellaneous income, such as interest and commissions, in the RTI. Some believe that these small incomes are not taxable, while others believe that they do not need to be declared because TDS has been deducted. However, this is not the full picture.
A taxpayer has to declare all sources of income in an ITR, regardless of whether it is taxable or exempt income. Failure to disclose this income may result in problems with the Income Tax Department.
Not claiming eligible deductions
Many taxpayers forget to claim the deductions to which they are entitled. For example, if you earn interest from a savings account, you can claim a deduction under Section 80TTA. A deduction of up to Rs. According to this provision, 10,000 are allowed.
Similarly, if an employee does not receive a housing rental allowance (HRA), he or she can deduct rental payments under Section 80GG. Self-employed workers can also claim this deduction.
Delay in filing the ITR
Taxpayers are required to pay mandatory late filing fees under Section 234F, which may vary from Rs. 1,000 to rupees. 5,000 if the returns are filed after the due date. Persons who are not required to audit their books have until July 31, 2024 to file their ITR for the financial year 2023-24. To avoid paying late payment charges, file the ITR within the specified time limit.
AIS Reconciliation
Consulting your Annual Information Return (AIS) when filing your Income Tax Return (ITR) is essential to ensure accuracy and avoid differences in income. The AIS contains information on various financial transactions that taxpayers carry out during the year.
This helps ensure that everything is correct and that you have not overlooked any potential source of income. If you notice an error in the AIS, you can submit comments for corrections.
Check TDS amount with Form 26AS
Form 26AS contains information about all taxes deducted or collected at source against your PAN.
If you find an error in the TDS shown in Form 26AS, you should inform the tax deductor and ask him to correct it. The Income Tax Department only considers Form 26AS while granting TDS credit. Therefore, it could deny the benefit of TDS claim in ITR if the same is missing in Form 26AS.
Club income from previous employer
If you changed jobs during the financial year, be sure to include previous earnings. Your tax liability could change as all your income will be combined. Additionally, your previous employer may have deducted taxes for you. Therefore, before filing your return, check everything and pay the correct amount of taxes.
