Filing income tax returns (ITR) is a crucial annual responsibility for taxpayers. While technology has simplified the process, there are common mistakes that people often make, inadvertently leading to income tax notices. Understanding these errors and taking proactive steps to avoid them can save you from unnecessary hassle and potential penalties.To avoid these hassles, it's essential to exercise caution and accuracy while filing ITR.
Here are five common ITR mistakes to avoid:
There are different ITR forms for various categories of taxpayers. Selecting the wrong form can render your ITR invalid, prompting the department to issue a notice for filing a revised return. Make sure you choose the appropriate ITR form based on your income sources and tax status.
Missing the deadline for filing ITR can attract penalties and interest. Even if there is no tax liability, filing after the due date can result in penalties ranging from a few thousand rupees to more severe consequences. Timely filing not only avoids penalties but also reduces the chances of getting noticed by the income tax department.
Tax deductions are a legal way to reduce your tax liability. Many taxpayers need to claim deductions under various sections of the Income Tax Act, 1961 such as Section 80C for investments, Section 80D for medical expenses, and Section 24 for housing loan interest. Ensure you claim all eligible deductions to minimize your tax burden.
Reconcile the TDS deducted from your income with the information provided in Form 26AS, which is a consolidated statement of TDS deducted on your behalf. Discrepancies in TDS reporting can lead to notices for recalculation of tax liability.
Once you've filed your ITR, it's crucial to verify it within the stipulated time frame. Verification confirms that you have filed the return and accept the information provided. Failure to verify your ITR can result in it being treated as invalid.
By avoiding these common mistakes, you can significantly reduce the risk of receiving income tax notices. Remember, accurate and timely filing not only ensures compliance but also fosters peace of mind regarding your tax matters.
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