The deadline for filing your income tax returns for the FY 2016-17 is the 31st July, 2018. It is, therefore, necessary that all taxpayers be aware of the essential dos and don’ts of tax filing so that they can avoid last-minute errors. Take a look at our list below:
It is important to keep your documents ready at the go. For filing, you will need all your old tax receipts, receipts of income and investments, Form 26AS, Form 16 etc. Keep these documents handy when filing for a quicker process; and also remember to keep them safe after you are done filling out the form online. You might need them in case your return is called out for scrutiny later.
2. Check your calculation
Go over your tax documents and do your calculations. Then, go over your math once again to ensure that all your calculations are correct. If you want help, you can always turn to an expert who will help you check your calculations and ensure accuracy. Besides, e-filing is highly recommended since that itself eliminates the chance of error. Those with income in excess of Rs 500,000 or those seeking a refund, must mandatorily e-file.
3. Report all your income
It is important to disclose all income that you earn from all sources, irrespective of whether the income is taxable or exempt. Not disclosing information can lead to legal consequences later on, and it would be wiser to be honest while filing.
4. Verify ITR after e-filing
After you have successfully e-filed your income tax return, you should e-verify your ITR-V via Netbanking, Aadhaar Card or through the EVC process on your mobile number and email. This is important because the IT department will start processing your returns post receiving the verification. Alternatively, you can sign and send the ITR-V to the CPC (via ordinary or speed post only). This has to be done within 120 days from the date of e-filing of tax return.
1. Make mistakes in details
During filing, you will be asked to fill in many details such as your bank details (account number, IFSC code, name as per bank records etc.), PAN number, postal address, and email id. Incorrect information can cause problems in your return being processed. You may also not be able to receive important communications from the tax department like refund cheque, error notices etc.
2. Forget to claim Section 80 deductions
The best way to reduce your tax liability is to use the deductions offered under Section 80 to their fullest. Even if you were not able to submit proof of investment to your employer earlier, you can still claim the deductions while filing the ITR, however keeping all proofs safely is very important, should the assessing officer ask for them later.
3. Not report exempt income
Income from dividends, PPF interest etc. fall under this category. It is wise to disclose these incomes because they will help you in doing your due diligence. Plus, you will not need to pay any tax on this money. High value inflows to your bank accounts will be easier to explain when these are already reported in your tax return.
4. File your return last minute
It is highly likely that you may make mistakes while filing at the last minute. So, word to the wise: try not to procrastinate! In the worst case scenario, you may even end up paying more taxes or some penal interest than necessary by leaving it to the last minute.
Archit Gupta is Founder and CEO of ClearTax