ITR filing deadline: The deadline to file Income Tax Returns is just a month away, with the last date on July 31, 2024. It is very important to file the returns correctly and on time to avoid any complications or getting a notice from the Income Tax department.
This is very crucial for first-time ITR filers and taxpayers with income from various sources, including salary, property, capital gains, foreign income, and crypto gains, must be cautious. Salaried individuals who did not opt for the old tax framework in April 2023 or changed jobs during the financial year should take extra care when filing returns due to the complexities. When uncertain, seeking assistance from professional chartered accountants or tax consultants is advisable.
Commenting on the ITR filing process, a Delhi-based Chartered Accountant (CA) in a post on X asked people to seek help from professionals rather than filing the ITR independently.
Kanan Bahl, who describes himself as CA and Finance Educator, noted the necessity of professional support for filing ITRs. He shared that despite being CAs themselves, he and his parents rely on other CAs to file their ITRs. Bahl said there are regular changes in tax laws and the strict consequences of non-compliance, underscoring the critical role of expert assistance in tax matters.
“If you think filing an ITR on your own is a smart decision, hear me out. I am a CA and so are my parents. We all get our ITRs filed from CAs in practice. Tax laws change frequently and are very stringent if non-compliances are made. Don’t be penny wise, pound foolish!” Bahl posted on X.
Some of the common mistakes taxpayers do while filing their ITRs are:
1. Choosing wrong ITR forms
Using the incorrect form for your Income Tax Return (ITR) can lead to serious repercussions. Submitting the wrong form results in a faulty return. You can either anticipate a rectification notice from the tax department or proactively correct the errors by logging in to your account. One should note there are 7 different ITR forms for different categories of taxpayers.
Using the wrong ITR form may lead to additional compliance requirements. The Income Tax Department may ask for clarifications, documents, or amendments to rectify the incorrect filing. This can result in unnecessary correspondence, delays, and additional effort on your part.
2. Claiming wrong deductions
Taxpayers exploit the lack of documentary proof requirement in filing I-T returns to falsely claim tax refunds. Some fraudulently claim deductions under sections 80G and 80U for donations to charities or disabled taxpayers can come under I-T department scanner. With the help of AI tools and Annual Information Statement (AIS), the I-T department can verify the accuracy of your (faulty) disclosures.
3. Information mismatch
Before you start filing your returns, you must download Form-26AS and the Annual Information Statement (AIS) are cross check them. One must ensure consistency between TDS, property transactions, Form-16, bank certificates, and financial records to avoid I-T department notices due to discrepancies. Reach out to the tax deductor if you find any inconsistencies in these documents.
4. Income from all sources
You need to be cautious if you have changed jobs in the financial year. Salaried individuals will receive two Forms-16 from previous and current employers. Ensure to declare income from both sources and don’t overlook any tax deductions. The AIS records all income, avoiding tax notices for undisclosed earnings.
5. Complete the whole process
Filing ITR isn’t finished after submitting online. Verify within 30 days using Aadhaar or bank details to avoid penalties for late verification. Delayed verification means the date of verification is considered the filing date, potentially incurring late-filing fees of Rs 5,000.