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Kolkata: In a few weeks there will be a scramble to file ITR by the deadline to avoid payment of penalty. Many of us take the help of CAs or lawyers to file income tax. There are many to attempt to do it by themselves -- completely lay people who have no formal training in these two trades. However, thanks to years of reform, the process of filing income tax return (ITR), once inscrutable to many professionals, have become far easier now enabling many to try it out themselves.
However, there are a few common mistakes that one must be aware of when filing taxes. If one commits these mistakes he/she might face trouble. Therefore, we are enlisting these mistakes that many are prone to committing. To have a trouble free filing of ITR, make a note of them.
The process of filing ITR begins with choosing the proper form in which to file taxes. Different forms apply to different categories of taxpayers and one must not file taxes in the incorrect form. ITR-1 (Sahaj) is appropriate for individuals with income up to Rs 50 lakh from salary or pension, while ITR-2 is the form for those who have capital gains to report. The ITR-3 Form is to be used by an individual or a Hindu Undivided Family who has income from a proprietary business or has a profession, while ITR 4 or Sugam is for individuals and HUFs, partnership firms (other than LLPs), which are residents and whose total income does not exceed Rs 50 lakh.
ITR-5 is for firms, LLPs (Limited Liability Partnership), AOPs (Association of Persons), BOIs (Body of Individuals), Artificial Juridical Persons (AJP), Estate of deceased, Estate of insolvent, Business trust and investment fund. ITR-6 is for companies other than companies claiming exemption under Section 11 (Income from property held for charitable or religious purposes), ITR-6 has to be filed electronically only, while ITR-7 is for persons including companies required to furnish returns under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) or section 139(4E) or section 139(4F).
Many taxpayers think as soon as you click submit on the portal, the tax filing process is complete. But it is not so. ITR filing is complete only after you have e-verified your ITR in a period of 30 days from submission. E-verification can be done through Aadhaar OTP, net banking or an EVC code. Without this step, ITR is not submitted.
Financial year and assessment years are different and one should never mix up between the two. If you are paying taxes for the financial year 2024-25, the assessment year will be 2025-26. If you make a mistake in this step, your ITR will be considered invalid.
Many taxpayers disclose their income from salary but often forget to add interest earnings from savings accounts and/or fixed deposits. One must check these figures and include them in the ITR. Don't think that if you don't report them, the income tax department won't know about it. They have all the relevant data in the AIS (annual information statement) and Form 26AS.
Claiming deductions without proof can lead you to trouble and penal charges later. If you have made investments in tax-deductible instruments, you must have the physical or online proof of it. If you have to claim exemptions, you might need to file ITR in the old system since the new system does not entertain most deductions.
