ITR filing: These 5 mistakes you should avoid while filing tax returns at the eleventh hour

Before beginning to start the ITR filing process, it is vital to ensure that bank account is pre-validated.

It is a busy time of the year as salaried individuals prepare to file their income tax return (ITRs) for financial year 2022-23 (assessment year 2023-24) within the due date of July 31. If you are a salaried individual, you should file the tax return within the due date even though tax has been deducted at source by the employer.

More importantly, if you are filing tax returns on your own at the eleventh hour without taking any help from a tax professional, be sure that you know all the deductions and exemptions available to you. Many taxpayers adhering to the Do It Yourself (DIY) end up making errors in their returns, leading to notices from tax authorities.

Also Read: Income tax return filing: Here are 5 easy ways to maximise refund

The first right step in the process of submitting tax return is to choose the correct form. One of the most common errors when filing a tax return is using the wrong ITR form. Using an incorrect form leads to a defective filing that will be rejected by the income tax (I-T) department.

Also Read: Nuts and bolts of income tax return-filing process for FY22-23

For instance, if you are a salaried professional with a total income of Rs 50 lakh in FY23, you can file returns using ITR Form 1. However, if you have both salaried income and capital gains from investments, you should use ITR Form 2.

In a nutshell, the choice of the correct ITR form mainly depends on your sources of income.

Another mistake to avoid is failing to declare income from all sources, income from salary, business/profession, house property, capital gains, and investments. Experts say hiding any income can attract penalties and scrutiny from the I-T department.

Also Read: Income tax return filing: How long does it take to receive an ITR refund?

Similarly, make sure to claim eligible deductions and exemptions under various sections of the Income Tax Act, such as Section 80C and Section 80D, to lower your taxable income.

Further, disclose all bank accounts, including overseas accounts, while filing your tax return.

Salaried individuals can check Form 26AS and the Annual Information Statement (AIS) by logging into the account of the individual on the income-tax portal, and make sure all the income, tax deducted at source (TDS) and tax collected at source (TCS) payments are mentioned.

Also Read: ITR filing: How to file income from capital gains or set off capital losses

Plus, Form 26AS contains details about tax credit statement that has information about all payments made to you and the TDS deducted on these payments, including TDS on interest earned on deposits, as well as bonds and dividend income. It will also have information about TCS on foreign currency transactions.

In 2021, the I-T department launched the AIS, and it contains much more details than Form 26AS. Taxpayers should check the TDS and TCS details in their Form 26AS and verify them with the details in the AIS.

The onus of checking all incomes included in the AIS or Form 26AS is on the taxpayer.

Also Read: ITR filing: Know who can and can't file income tax returns using ITR this year

Before beginning to start the ITR filing process, it is vital to ensure that bank account is pre-validated, especially if the taxpayers are expecting a tax refund. If not done, the I-T will not be able to credit the income tax refund owed to you.

A common tax filing error is forgetting to verify income tax return. Tax filers only realise this mistake when they receive a notice from tax authorities.

Notably, the ITR filing process does not complete with the submission of the tax form. After a tax filer submit return, s/he need to verify it. Till last year, salaried individuals could verify the ITR within 120 days, but now this time frame has been reduced to 30 days. If not verified within this period, the return becomes invalid and it may attract penalty for non-filing tax returns.