ITR Filing Mistakes
List of Mistakes Done
Forget to send ITR V to the Income Tax Department.
Taxpayers are required to send ITR V form to the Income Tax Department on the address -“Income Tax Department–CPC, Post Bag No.1, Electronic City Post Office, Bangalore – 560200, Karnataka” by regular Indian Post or Speed Post only. This form must be sent within 120 days of filing the e- form of income tax return.
Nearly 10% of Taxpayers forget to send ITR V form every year.
From 2015-16, a new way of verification has been introduced under which the tax payers are not required to send the ITR V form.
Incorrect Bank Account Number and IFSC code.
The bank account number in ITR should be of 9 digits and a specified IFSC code must be entered.
Incorrect claim of TDS.
Taxpayers are required to mention the TDS amount after the reconciliation of Form 16/16A with form 26 AS. In case of failure, the taxpayers are required to pay an additional income tax.
Filing ITR without analyzing the effect of Interest Payable under section 234A, 234B and 234C.
The taxpayers must pay tax under sections 243B and 243C for the non-payment or less payment of advance income tax than the amount required. If the taxpayers file income tax returns after the validity has expired, they are required to pay the interest under Section 234A. The taxpayers need to pay the interest even if it is delayed by a single day and the interest under this section is payable @1% per month. Interest under section 234A is charged on the assessee for the Assessment Year if he delays in furnishing the Income Tax return after 31 August 2015.
Selecting Incorrect ITR form.
One must select the correct ITR form and check which one is applicable to him/her.
- ITR 1 form can be used only by an Individual assessee having Income from Salary/Pension, One House Property, Other Sources (other than lottery and race horses).
- ITR 2 form can be used only by an Individual as well as HUF assessee having Income from Salary/Pension, House Property, Capital Gain and Other Sources and for assessee having foreign assets.
- ITR 2A form can be used only by an Individual as well as HUF assessee having Income from Salary/Pension, House Property and Other Sources and not having foreign assets.
Intimation and Rectification.
Income tax return, after being filed is processed by the Income Tax Department and an intimation is generated which contains the details of income and tax.
If these details match with the return filed, no further action is taken. If there’s a mistake, a rectification application can be filed by the assessee to correct the mistakes within a period of four years from the end of financial year. Online rectification can also be done. Don’t forget to check the Intimation after filing ITR which will clear that you need to file the rectification application or not.
Revising the late file ITR in India.
Income tax return can be revised only if it was filed within time. This mistake is possible only if the Income declared in Income Tax Return is less than Rs. 5,00,000 and the return is filed manually.
Foreign Assets, Bank Account, Aadhaar Number and Passport Number.
New Income Tax Return forms for the Assessment Year 2015-2016 have been released by the Income Tax Department on 22 June 2015 with some new requirements that are mandatory required to be filled by an assessee (if applicable), some of these are:
- Aadhaar Number (if held)
- Passport Number (if held)
- Details of all bank accounts held in India at anytime during the previous year (except dormant account)
- Details of Foreign Assets and Income from any source outside India.
Incorrect information in Personal Information Schedule:-
Many assesses are found to have filled incorrect TAN, Email Address, Mobile Number, Date of Birth & Residential Status, An assessee should understand the fact that:
- Incorrect TAN: Will not allow him/her to claim the Tax Deducted at source.
- Incorrect Email Address: Will result in non receipt of all intimations from CPC and other communications.
- Incorrect Mobile No. : Will result in non receipt of SMS based Communication.
- Incorrect Date of Birth: Will result in Computation of higher taxes in case of senior citizens.
- Incorrect Residential Status: Will result in Computation of higher taxes.
- Incorrect Aadhaar no. : Will not enable in updating Aadhaar and EVC verification.
- Excess deduction claimed or Deduction claimed twice: Many assessees claim excess deductions, specifically under section 80, 80CCC & 80CCD(1), it should be clear that the maximum amount of deduction available under section 80C, 80CCC and 80CCD(1) in aggregate cannot exceeds Rs. 1,50,000.
At the same time many tax payers claim deduction under section 80G in excess by considering it under 100% eligible donation.
Claiming Tax without real payment of Self Assessment Tax.
Some assessees claim Income Tax paid without really paying the Income Tax, it can make an assessee an ‘Assessee in Default’ which may result in payment of interest @ 1% per month or part of the month under section 220 & penalty under section 221 at an amount as determined by Assessing Officer.
At the same time, the Intimation received under section in respect of that return can create the demand for unpaid Income Tax along with Interest under section 234B & 234C (if applicable).
Leaving the columns blank in ITR FORMS.
Every taxpayer is required to fill all the columns of the ITR form (other than those specified optional). If all the annexures, columns and statements are not duly filled in an ITR form then the Income Tax Return may be considered as defective under section 139(9) and might be rejected by the Assessing Officer.
An assessee should understand that the deduction under section 80G in respect of Donation is available only if all the requisites field in the schedule are duly filled in, the claim of Taxes paid and TDS is not available to the tax payer if he fails to give the complete details of it.