It is very important to keep some things in mind while filing income tax. On the other hand, there is a great need to avoid some mistakes.
Many taxpayers now file their income tax returns on their own. However, this often creates complications in income tax filing and can lead to losses. Therefore, it is very important to keep a few things in mind while filing income tax on your own. On the other hand, there is a great need to avoid some mistakes. Let us also tell you who should not make those mistakes.
Not disclosing
all sources of income While filing ITR, it is important to take into account all sources of income, whether from past or current employment or investment income, FD interest rate income, savings account interest income, etc. and file it. This under the appropriate ITR form. If no income is reported, a discrepancy will appear in the TDS certificate (Form 16) and Form 26AS. The tax department may in this case send a tax demand notice to the taxpayer to pay the additional tax arrears.
Wrong ITR Form
Different income tax forms are prescribed for different types of taxpayers. ITR-1 (Sahaj) is applicable only for resident individuals with income up to Rs 50 lakh and only for those with income from salary, a house property and other sources. ITR-3 is applicable for income from business or profession and ITR-4 (Sugam) is applicable for presumptive method of taxation such as freelancers. Taxpayers should be careful while choosing the ITR form. A wrong form can make the tax return defective and the taxpayer may receive a notice from the tax department to file the return once again.
Non-declaration of income from capital gains
Calculation of capital gains requires complete information on the sale, purchase and expenditure of a capital asset. If a taxpayer makes an investment to claim capital gains exemption, the taxpayer has to provide details of investment and capital gains exemption.
Not clubbing minor’s income
If taxpayers have made any investments in the name of their minor child, they should include income such as interest income as part of the income. The clubbing of income usually occurs with the parent who has a higher income. Taxpayers can claim a deduction of up to Rs 1,500 per child for up to two children.
