This is a famous saying by Oliver Holmes, "I like to pay taxes. With them, I buy civilization.” You want to live in a civilized World....You must pay taxes. Once a year you have this duty of filing Income Tax Returns (ITR)....unless of course, you make a mistake while filing ITR.
So what happens if you make a mistake while filing income tax returns? Oh....nothing much. You just lose your tax refund, pay a heavy penalty...worse, a jail term. Reason enough not to make mistakes while filing your income tax returns?
These are a list of 6 common mistakes you can make while filing income tax returns. Want to know more on tax planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com website. IndianMoney.com offers Free, Unbiased and on-call financial advice on Insurance, Mutual Funds, Real Estate, Loans, Bank Accounts and capital markets
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1. You don't file income tax returns
You are under 60 years and your income exceeds INR 2.5 Lakhs for the Financial Year 2016-2017? You must file income tax returns. Your income is calculated before taking into account, income tax deductions under various sections.
2. You fill in the wrong details
You have to fill important basic details like your name, PAN, bank account number, email ID or IFSC Code. You fill them wrong....You can be in deep trouble. What if your tax refund goes to someone else?
What happens if you quote the wrong PAN? Your returns will be rejected by the income tax department. The name for this PAN in the income tax records, will not match your name and PAN. It is very important that you fill the name and date of birth properly, as there could be a mismatch with PAN details. You must also fill email and contact details properly, so that the tax department can easily communicate and address your needs.
See Also: Income tax return status
You can view the tax credit statement or Form 26AS, which gives important details of taxes you have paid. You also get details of the taxes, which have been deducted on your behalf by your employer in the form of TDS (Tax Deducted at Source).
Form 26 AS can be downloaded from the income tax website and contains the details of TDS on salary, interest income, real estate, advance tax or even a refund received during the year.
You have invested in fixed deposits, but have you mentioned the interest income you have earned while filing ITR? The interest you earn on your bank fixed deposits are taxable and you must include this income while filing ITR.
5. You under-report your income
Tax avoidance is not a crime, but tax evasion is a crime. You file ITR but do not report all your income. If you are caught there are heavy penalties and yes...there could be jail.
The tax department can easily track your income and high value transactions through your PAN. Why....banks, companies and financial institutions, report all your high value transactions to the Government. If you don't mention these transactions, you could be caught.
6. You choose the wrong ITR Form
You must select the ITR form applicable to you. The ITR form you have to fill, depends on your sources of income or even combinations of income. There is a different form if you earn just a salary and a different form if you earn salary + capital gains. If you file ITR with the wrong form, your ITR gets rejected and you have to file revised returns.
Make sure you don't commit any mistakes while filing income tax returns. This is a task which you do once a year. Make sure it's done well. Be Wise, Get Rich.
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