Submit ITR: The income tax return (ITR) filing due date for fiscal year (FY) 2021-22 and assessment year (AY) 2022-23 is July 31, 2022. So an individual has an income. will be busy evaluating their finances and related documents. However, while filing an income tax return, it has been discovered that an individual earns a number of common mistakes that lead to them being denied an ITR, an income tax notice, or a delayed ITR refund.
Speaking of the complexities that taxpayers need to understand, said Sujit Bangar, Founder at taxbuddy.com, “Income tax return of elusive complexity. We may think that the ITR is filed correctly until we receive any notice of a faulty income tax return. Most of these errors are due to misinterpretation of tax regulations or due to lack of understanding”.
Below we list 5 common mistakes taxpayers make during the ITR filing process:
1]No tax deduction: Many times we receive less refunds than we expect. We sometimes get a notice asking for a refund instead of a due date. And the common reason for this is not getting credit due for deducted TDS.
“The most common mistake users make is that they don’t calculate the appropriate head-to-head tax withholding. For example, if I have a professional’s receipt with my salary and while filing, I If I have professional income as salary income, I will receive a notification from the tax department,” said Sujit Bangar of taxbuddy.com.
2]Speculative income versus ordinary business income: The big mistakes that users make are related to covering losses from speculative trades such as day trading. Sometimes we lose from speculative income and gain from regular stock trading or F&O trading.
“Losses from speculative trades cannot be offset against business income like F&O or common stock trading,” says Sujit Bangar.
3]Bank authentication: The third most common reason for delayed ITR refunds is problems with bank account validation. One has to make sure PAN and AADHAR are linked. It helps with bank authentication for faster refunds and electronic verification for quick processing.
4]Incorrect ITR form selection: The second most common mistake is in choosing the ITR form. For example, if a person has multiple home assets, he or she cannot file an ITR-1. Therefore, the correct ITR form needs to be identified and filed.
Aarti Raote, Partner at Deloitte India said, “The ITR-1 is a simple tax return that can be filed by a resident taxpayer with a gross income of no more than 50,000 and have reported income from sources such as salary, income from other sources and a home property only. One should note that the tax return cannot be used by a director of a company or deferred for tax payment on ESOPs of startups or an individual with more agricultural income. 5000 or have capital gains income. “
5]Taxes cannot be saved outside of form 16: Salaried workers have the big misconception that taxes cannot be withheld beyond form 16. They file their ITRs by relying on form 16 tax calculations without considering tax deductions.
“We should avoid this mistake. Many things we do in our daily lives and these things have a tax savings rate. For example, children’s school fees or the RTPCR test (80D deduction of 5000),” said Taxbuddy.com’s Sujit Bangar.
