It is important to note that one should complete their ITR filing process by taking some time to avoid mistakes, which usually occur when an individual is filing them either at the last minute or in haste.
Here is a list of common mistakes that taxpayers can avoid while filing ITR:
Selecting the incorrect ITR form is one of the most common mistakes while filing ITR. Taxpayers must note that choosing an incorrect form can lead to a defective filing that will be rejected by the Income Tax Department.
ITR forms 1-4 can be used by individual taxpayers to file their returns. ITR 1 is applicable for salaried professionals, who have a total income of Rs 50 lakh in FY23. It is worth noting that the same form can also be used by those who earn income from other sources, like interest from fixed deposits (FDs).
Another common mistake and one of the crucial ones is to not declare income from all the sources. Including income from salary, business/profession, house property, capital gains, and investments is crucial, if one does not wish to invite penalties.
Before filing your ITR, it is crucial to ensure that your bank account is pre-validated, especially if the taxpayers are expecting a tax refund.
Another common mistake is getting confused while choosing the assessment year. Many taxpayers often confuse the terms financial year and assessment year. A financial year is the period during which a taxpayer earns income. Assessment year, on the other hand, is the year following the financial year, when the returns are filed.
Not verifying or forgetting to verify your ITR is yet another common mistake. This error is usually realised after a notice from the Income Tax department is received.