The season of filing Income Tax Returns (ITR) is going on and lakhs of employed people are filing their returns. However, tax experts say that even a small mistake made while filing ITR can cause big problems later. Providing wrong information, hiding any income or not matching the documents correctly may result in additional tax, interest and penalty being paid along with the tax notice.
It is not right to depend only on Form-16
Most of the salaried employees while filing ITR file returns only on the basis of Form-16. But according to experts, this is one of the most common mistakes. Before filing the return, the information entered in Annual Information Statement (AIS) and Form 26AS must be matched. Many times these contain information about bank interest, TDS or other financial transactions, which is not included in Form-16.
Please mention all sources of income
It is not enough to provide only salary information while filing ITR. Interest on bank FDs and savings accounts, capital gains from shares or mutual funds, rental income, freelance earnings or income from any other source should also be included in the return. Hiding any income may result in a notice from the Income Tax Department.
Choose the right tax regime
It is also very important to choose the right option between the old (Old Tax Regime) and new (New Tax Regime) tax system. Many employees choose the tax regime without calculating, due to which they may have to pay more tax. It is better to compare the tax liability in both the systems before filing the return.
Don’t claim the wrong deductions
Experts say that tax exemption or deduction should not be claimed without sufficient documents. Claim Section 80C, 80D, home loan interest or other exemptions only when you have valid proof of the same. If a wrong claim is made, the department may reject it and you may have to pay additional tax along with interest.
Bank details and e-verification are also necessary
It is also very important to provide correct bank account information while filing returns. Tax refund may get stuck by filling wrong bank account or IFSC code. Apart from this, it is also important to do e-verification on time after filing ITR. If the return is not verified within the stipulated time limit, the ITR will not be considered valid.
Do final check before filing return
Experts advise that before submitting ITR, check all the documents once again. Match Form-16, AIS, Form 26AS, bank statement and investment records. If there is any doubt, it would be better to seek advice from a tax expert. A little caution can not only save you from tax notices but will also help you avoid unnecessary financial losses.
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