Common Mistakes to Avoid While E-Filing Tax Returns
E-filing of taxes is mandatory for every earning individual who exceeds the taxable income limit. Any errors or omissions can cost you a lot of money and have legal implications. If the details provided in the tax forms is found to be erroneous by the income tax department, your tax returns will be deemed defective and in some cases, invalid. If you are a first timer or relatively new to tax filing procedures, you must avoid the following mistakes in order to file taxes successfully.
Incorrect Details: - Many people end up making silly errors while filling basic details such as PAN information, Bank account number, personal address, IFSC code etc. If you quote your PAN number incorrectly, your tax returns will be rejected by the income tax department since the records will not match. Similarly, providing incorrect personal details such as address and phone number will also result in complications.
Choosing The Wrong ITR Form:-It is very important to choose the correct ITR form while filing your tax returns. For instance, if you are earning income only through salary, you must select ITR 1 and if you are earning through salary as well as capital gains you should fill ITR 2. If you end up filing the wrong ITR forms, there are high chances of your tax returns being rejected by the income tax department.
Below are the links to various information on ITR Forms for filing your income tax for AY 2016-2107.
(1) ITR-1:- ITR-1 is the form to be used by salaried individuals to file taxes.
(2) ITR-2:- ITR-2 form is provided by Income Tax Department for those Individuals and HUFs who do not have income from business or profession.
(3) ITR-2A:- The Income Tax Department had launched ITR-2A last year with the intention of making the return filing process easy for salaried taxpayers. Individuals and HUFs not having income from business or profession and capital gains and who do not hold foreign assets can fill ITR-2A form to file their returns.
(4) ITR-4:-This Income Tax Return form is to be used by an individual or a Hindu Undivided Family who is carrying out a proprietary business or profession
(5) ITR-4S:- The Sugam ITR-4S Form is the Income Tax Return form for those taxpayers who have opted for the ‘Presumptive Income Scheme’ as per section 44AD and section 44AE of the Income Tax Act. However, if the turnover of the business mentioned above exceeds Rs. 1crore, the taxpayer will have to file ITR-4.
Not Claiming Deductions:- Many tax payers fail to claim tax deductions under the various sections of the Income tax act. Investments such as insurance as well as home loans are eligible for tax deductions. By applying for tax deductions you can save a considerable amount of your hard earned income. Hence, if you have insurance policies or loans, do not forget to claim tax deductions.
Below are the links which talk about the various deduction you can claim in Income Tax.
(1) Section 80D Deduction Guide:- As a taxpayer, if you have incurred expenses towards medical insurance, preventive health check-up and other medical expenses, then you can claim tax deductions u/s 80D. You can get a tax deduction up to Rs. 60,000 under this section.
(2) Section 80C Deduction Guide:-Section 80C of the Income Tax Act allows you to save taxes by making investments in several options listed below. Under section 80C, you can claim maximum tax deduction up to Rs. 1,50,000.
(3) Insurance Policy To Save Tax:- Insurance policies are effective tax planning tools because of the tax benefits you get. Here’s the wherewithal to help you use them effectively.
(4) Tax Deductions on House Property:- You can get a deduction of home loan interest repayment under section 24 of the Income Tax Act and a deduction of the principal amount under section 80C.
(5) Tax deduction on Tuition Fees u/s 80C:- A part of money you spend on educating your kids can be claimed as tax deduction u/s 80C of I-T Act. The tuition fees paid in school for children is eligible for deduction.
(6) Deduction for Interest on Education Loan u/s 80E:- Just like expenses incurred on school education bring you tax benefits, expenses on higher education also fetch you tax deductions. If higher education is supported by education loan, then interest paid on it can reduce your taxes.
Forgetting to check tax credits: - Before e-filing, it is very important to check your Form 26AS for potential tax credits. The Form 26AS features the details such as income tax deducted, advance tax, self-assessment tax etc. Knowing your tax credits will help you avoid additional tax demand and secure refunds of excess tax paid.
Below is the link which explains you about Form 26AS.
Form 26AS (Tax Credit Statement) Uses:- A salaried individual generally pays tax in the form of Tax Deducted at Source or TDS. This is deducted by his employer from his monthly salary.The Income Tax Department maintains the database of the total tax paid by the taxpayer. Form 26AS (Tax Credit Statement) is the annual statement in which the details of tax credit are maintained for each taxpayer as per the database of Income-tax Department. Form 26AS will reflect the tax credit against the PAN of the taxpayer.
Non- Verification of ITR: - Most first time taxpayers are unaware about the process of ITR verification. Filing taxes is not enough, taxpayers need to verify their returns post efiling. Verification of returns can be done in two ways. The first option is sending the physical copy of the ITR V to the Centralized Processing Centre at Bangaluru. Secondly, you can e- verify you tax returns through the income tax website.