Filing ITR for AY 2024-25: In India, filing the Income Tax Return (ITR) is a crucial yearly duty for taxpayers. Income tax is a tax paid on the income and profits that individuals and organizations receive. In addition to being required by law, paying your taxes ensures that you support national development and government finances. It also gives you the ability to claim benefits like valuable in
come proof, which is helpful when applying for visas, loans, or government tenders. You can also claim tax refunds if you paid too much taxes.
In regard to this, it is crucial to be watchful as tax season comes closer and to prevent typical errors that could result in fines, delays, or even legal action.
These are the top 10 typical errors to stay aware of while filing your ITR for FY 23–24:
1. Inaccurate personal information:
When providing their address information, Aadhaar, and Permanent Account Number (PAN), taxpayers must use care. It is important to pay close attention to the email address and phone number supplied, making sure they match with the official records. Maintaining the accuracy and timeliness of all personal data is important for preventing errors.
2. Selecting the incorrect ITR Form:
Taxpayers must use the appropriate ITR form for their circumstances in order to disclose all of their sources of income, both taxable and exempt. Different ITR forms are available from the Income Tax Department for different categories of taxpayers and income sources. The return may be rejected and deemed “defective” if a wrong ITR form is filed. As a result, taxpayers must choose the right form according to the sources of their income.
Read Also: Income Tax : 10 common mistakes to avoid while filing ITR in India
3. Not disclosing all sources of income:
Regardless of whether an income source is tax-exempt or not, taxpayers are required by law to record all sources of income. Many taxpayers forget to include these or report their under the “Income from other sources” section of their tax forms because they are unaware of them. Sources like hobbies, rental homes, or freelancing jobs can fall under this category. Underreporting may result in penalties if all income is not disclosed.
4. Not filing the necessary forms:
Before filing their returns, taxpayers must file certain forms in order to claim certain exemptions. When claiming deductions under sections like as 80C, 80D, and 80G, mistakes are frequently made. It is crucial to make sure that any claimed deductions and exemptions are supported by valid documentation.
5. Failing to reconcile Form 26AS:
A consolidated tax statement, Form 26AS gives the Income Tax Department information on taxes collected at source (TCS) and taxes deducted at source (TDS) in the name of the taxpayer. Since the tax authorities already have access to the information on all incomes included in Form 26AS, it is necessary to disclose all of them. Inconsistencies may arise if the data in Form 26AS is not reconciled with personal records, which could result in a notice being sent to the taxpayer.
Read Also: File your Income Tax Return for FY 23-24 : Step by step guide
6. Fail to record income from past employment:
If an individual changed jobs during the financial year, they also need to report their income from their previous employer when they file their ITR. The TDS certificate and Form 26AS may not match up if this revenue is not reported.
7. Late filing of returns:
Failing to file an ITR by the deadline can result in penalties, the loss of certain rights, and interest on overdue taxes. There will be late filing costs and no forward of losses to the following year. Taxpayers need to make sure that their returns are submitted on time and are aware of the deadlines. Wednesday, July 31, 2024, is the last day to file an ITR for the fiscal year 2023–2024.
Read Also: Income Tax FY25: How to reduce tax liability in a given FY25
8. Hiding foreign income and assets:
In an effort to combat black money and restrict money leaving India, the government has taken action. Any international income or assets, including foreign bank accounts or real estate, must be declared by taxpayers on their yearly income tax forms. If you don’t, there may be severe fines and legal repercussions.
9. Insufficient proof for the stated deductions:
Taxpayers are required to keep documents, evidence, and proofs for any costs or investments (such as children’s tuition fees, LIC, PPF, and medical insurance policy) that they claim as deductions under Chapter VIA. When a deduction is claimed without adequate evidence, it may be disallowed, increasing the taxpayer’s tax obligation after a scrutiny assessment. Since the case may be investigated for income taxes for up to 6 years following the end of the year in which the return is submitted, records must be retained for a minimum of 7 years.
Read Also: Income Tax Return filing: Salaried individuals need to be aware of these 5 key points
10. Ignoring verification prior to submission:
The ITR submission is not the end of the tax return filing process. It is mandatory to verify the return within 30 days of filing else, the tax return will not be processed by the Income Tax Department. The return will be deemed “Invalid” and a notice will be sent by the department if the ITR V is not verified within the allotted time frame.
Through proactive actions to prevent these typical mistakes, taxpayers can guarantee a hassle-free and compliant income tax filing process.
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