Mistakes to avoid while filing an income tax return

Filing income tax returns can be stressful. In the midst of it all, managing work along with filing returns can lead you to miss out on a few details and wrong details happen to get filed. The situation, even though not ideal, is natural to occur however errors must be avoided at all costs.

If certain errors occur then a revised return can be filed and the return will take place of the original return provided the same is revised within the specified period of time.

To draw your attention to common mistakes that must be avoided while filing an income tax return:

1. Various deductions can be claimed under Chapter VI-A or 80 series. The deductions must be claimed within the ambit of the law. If wrong deductions are claimed it may lead to underestimation of income or overestimation of losses which must be avoided. Claiming personal expenses along with business expenses is strictly not allowed and separation between these expenses must be made to avoid penalty.

2. Certain sources of income may be omitted or classified in the wrong head. This could be done with fraudulent intent or unintentionally. This will attract heavy penalty under Sec 270 AA as per Income Tax Act 1949. Tax professionals must be consulted to avoid any such discrepancy arising due to doubt.

3. If incorrect personal details are provided, communication from the tax authorities will not reach you on time and this may attract penalties. Any notices or summons that don’t reach you may attract penalty for no response.

4. All income must be disclosed in the returns. Sometimes, the exempt income is left out of the return since it is not tax deductible. However, withholding this information is incorrect an all incomes must be disclosed whether taxable or not.

5. There are various regulations to be followed in transactions where TDS is involved. If TDS is collected and not deposited the same may not get reflected in form 26 as. The returns must be filed after verifying Form 26 AS

6. Any investment made in the name of a spouse or minor child must be disclosed and added to your own income. Failure to disclose this may attract the attention of income tax authorities.

7. If any mistake is found in the revised return, the same can be revised again but within the time limit prescribed under the law. There is no limit to the number of revisions but the revision must be done within the time limit or the date of completion of the assessment whichever is earlier.

8. In case of any income arising from an asset held outside the country must not be omitted from the return and in case of any asset in which you are a beneficial owner must be disclosed in the return.
   
   

These are some common errors that may be committed which lead to under reporting of income and bring your return into scrutiny. The situation can be avoided by taking certain measures and abiding with the tax laws in matters related to the business.