When it comes to filing ITR its simple. Get it right. The deadline of July 31st is fast approaching. If you file taxes in a hurry, there could be a season of regret.
A common mistake is filing incorrect bank account details and wrong basic contact details. The IT Department sends all communications to your registered mobile number and email ID. If you commit a mistake important communication from the IT department might not reach you. There are a lot of mistakes you must avoid when filing ITR.
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If you delay tax filing or don’t file taxes, there are consequences. If taxable income is more than Rs 2.5 Lakhs (This is for a person under 60 years), or Rs 3 Lakhs (This is for a person who is between 60-80 years) or Rs 5 Lakhs for a person over 80, tax filing is compulsory.
File ITR if you are eligible for tax refund on excess taxes paid or seek to carry forward, capital losses. This would help carry forward capital losses to reduce taxable income in the years to come.
What if you miss the income tax deadline? The last date to file ITR is July 31st 2019. This could be extended. If you miss the deadline, you are penalized with Rs 5,000 on ITR filed before December 31st 2019. There is a penalty of Rs 10,000 for filing ITR between January 31st 2020 to March 31st 2020. You would incur a flat penalty of Rs 1,000 for taxable income under Rs 5 Lakhs.
See Also: Documents Needed When Filing ITR
Most people have salaried income. They also could have additional income like business income, income from house property or even income from capital gains on stocks and mutual funds. Many people have income from other sources like FD interest income or recurring deposit income.
You must declare all income under relevant heads in ITR Forms. If you don’t declare income and evade taxes, you come under the scrutiny of the IT Department.
There are 7 kinds of forms available for filing ITR in Assessment year 2019-20. These forms are numbered ITR 1 to ITR 7. People with just salary income use Sahaj also called ITR 1. People use ITR 2 if there are capital gains to declare. It’s ITR 3 for business and professional income. Individuals generally use ITR 1 to ITR 3, while businesses/companies/trusts use ITR 4 to ITR 7. Use the right ITR form while filing taxes. Check with the financial advisor before filing ITR.
See Also: Income Tax Return Filing And Eligibility
Before filing taxes, understand tax deductions and tax exemptions. Tax deductions help to legally avoid tax (This is called tax avoidance) under Income Tax Act. Understand the deductions and their limits, before filing ITR. If you don’t, chances are you would miss important deductions and end up paying more taxes.
The Form 26AS is the summary of tax deducted at source. TDS is the tax paid on your behalf by employer, bank, clients or anyone who must pay you. Mistakes could be made while paying TDS. Download a copy of Form 26AS from TRACES and check TDS entries. Not doing so can prove costly.
See Also: How To E-File ITR Form -1 In 2 Minutes?
Arm yourself with the right information before filing taxes. A mistake is not necessarily a disaster as ITR can be revised. Keep all documents handy and go through Document Checklist before filing ITR.
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