Navigating tax-filing season can be straightforward if you know the pitfalls to avoid. Whether you’re a salaried employee, freelancer, or small business owner, here’s a detailed guide to help you sidestep common errors during ITR filing.
1. Selecting the Incorrect ITR Form
Choosing the correct ITR form is essential, as each form caters to different types of income. For instance, salaried individuals without additional income sources typically use ITR-1, while freelancers with business income might require ITR-3. For detailed information on choosing the correct form refer to “Which ITR form should you choose?”. myTAXclub automatically selects the appropriate form, simplifying the process and reducing errors.
2. Errors in Personal Information
Ensure your personal details—name, address, PAN, and bank details—are accurate. Errors here can delay your refund or cause issues with the processing of your return. For instance, a mistyped bank account number could prevent your refund from reaching you.
3. Not Reporting All Income Sources
All sources of income, including secondary ones like interest from savings accounts, dividends, and rental income, must be declared. Even exempt income, such as long-term capital gains on shares up to Rs.1 lakh, must be reported to avoid legal complications.
4. Missing Out on Deductions
Many taxpayers miss out on valuable deductions for expenses related to their profession, investments in tax-saving instruments, and other allowable expenses. Ensure you’re not one of them by thoroughly reviewing what deductions you’re eligible for.
5. House Rent Allowance (HRA) Mistakes
To claim HRA, you need to submit rent receipts and, if your rent exceeds Rs. 1 lakh annually, the PAN of your landlord to your employer. Missing these documents can cost you the chance to reduce your taxable income.
6. Incorrect Assessment Year
The assessment year (AY) should correspond to the fiscal year (FY) for which you are filing, e.g., FY 2023-24 matches AY 2024-25. A common mistake is using the current year as the AY, which can lead to the rejection of your return or the need for amendments.
7. Overlooking Form 26AS and AIS
Before filing, check your Form 26AS for TDS details and your Annual Information Statement (AIS) for a comprehensive overview of your income and tax details. Discrepancies between these forms and your ITR can trigger inquiries from the tax department.
8. Ignoring Notices from the Tax Department
Any communication from the tax department should be addressed promptly. Ignoring notices can lead to penalties, legal action, or both. Treat these communications as urgent to maintain a clean compliance record.
9. Delay in E-Verification of ITR
After filing, the ITR must be e-verified within 30 days through Netbanking, Aadhaar OTP, or other approved methods. Neglecting this step can leave your filing incomplete, similar to not signing a check.
10. Not Seeking Professional Advice When Needed
Complex tax situations, such as multiple income sources or deductions for investments, often require professional guidance. Seeking advice can prevent costly errors and ensure that you take advantage of all applicable tax benefits.
By avoiding these ten common mistakes, you can ensure a smoother, more accurate tax filing experience. For more personalized support and easy-to-use tax solutions, visit myTAXclub, where we make tax filing simple and stress-free.
