Top Mistakes Done While Filing Income Tax Return

Most of the professionals and start-ups these days are inclined to file their income tax return themselves. However, professional keen to file on their own should be aware of the common mistakes made. Below are a list of top itr return filing mistakes gathered from the tax department.

Selecting Incorrect ITR form
One must choose the correct ITR form and check which one is applicable to them.
For Instance:-

1. ITR 1 form is useful only for an Individual assessee having Income from Salary/Pension, One House Property, and Other Sources (other than lottery and race horses).
2. ITR 2 form is useful only for 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.
3. ITR 2A form is useful only for an Individual as well as HUF assessee having Income from Salary/Pension, House Property and Other Sources and not having foreign assets.

Incorrect Bank Account Number and IFSC Code
The bank account number in ITR should in no case be less than nine digits and a valid IFSC code must be specified.

Incorrect claim of TDS
Taxpayers are required to mention the TDS amount after reconciliation of 16/16 A forms with form 26 AS or you'll have to pay an additional differential income tax.

Forget Sending ITR V to Income Tax Department
Taxpayers are required to post an ITR V form to 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 per cent of Taxpayers forget to send ITR V every year.

From 2015-16, the department has introduced a new way of verification under which the taxpayers are not required to send the ITR V form.

" Filing ITR without taking effect of Interest Payable under section 234A, 234B and 234C
You must pay tax under sections 243B and 243C. These sections are related to non-payment or less payment of advance income tax than the amount required

Taxpayers file ITR after the validity has expired and ignored the interest due under section 234A. The tax payers need to pay the interest even if it's delayed by a single day because the interest under this section is payable @1 per cent per month

Interest under section 234A would be liable for the Assessment Year on the assessee if he delayed in furnishing an Income Tax return beyond 31 August 2015.

Intimation and Rectification
Income tax return, after filing, will be processed by the department and an intimation will be generated which will contain the comparison of details of revenue 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 errors within a period of four years from the end of financial year.Online rectification is also possible.

Don't forget to check Intimation after income tax return filing which will explain that you need to file correction application or not.

Revising the late filed Income Tax Return
A revised return can be filed within the specified time. This mistake is possible only if the Income declared in Income Tax Return is less than Rs.5, 00,000 and return is filed manually.

Foreign Assets, Bank Account, Aadhar 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 mandatorily required to be filled by an assessee (if applicable), some of those are:

1. Aadhar Number (if held)
2. Passport Number (if held)

" Details of all bank accounts held in India at any time during the previous year (except dormant account)

1. Details of Foreign Assets and Income from any source outside India.
2. Incorrect information in Personal Information Schedule:-

Many assessees found to have filled wrong TAN, Email Address, Mobile Number, Date of Birth & Residential Status, An assessee should understand the fact that:

1. Incorrect TAN: Will not allow him to claim the Tax Deducted at a source.
2. IncorrectEmailAddress: Will result in non-receipt of all intimations from CPC and other communications.
3. Incorrect Mobile No.: Will result in non-receipt of SMS based Communication.
4. Incorrect Date of Birth: Will lead in Computation of higher taxes in case of senior citizens.
5. False Residential Status: Will result in Computation of higher taxes.
6. Incorrect Aadhar no.: Will not enable Aadharupdation and EVC verification.
7. Excess deduction claimed or Deduction claimed twice: - Many assessees claim excess deductions, specifically under section 80,80CCC & 80CCD(1), an assessee should understand the fact the maximum amount of deduction available under section 80C,80CCC and 80CCD(1) in aggregate cannot exceed Rs.1,50,000.

At the same time, many taxpayers claim deduction under section 80G in excess by considering it under 100 per cent eligible donation.

Claiming Tax without real payment of Self-Assessment Tax
Some assessee claim Income Tax paid without the original payment of Income Tax; it may make an assessee an 'Assessee in Default' which may result in payment of interest @ 1 per cent 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 a section in respect of that return will create the demand for unpaid Income Tax along with Interest under section 234B & 234C (if applicable).