It is very important to maintain your tax record even if you are not in the taxable income bracket as tax return papers are required when applying for a loan
Only a few days are left before the tax filing deadline ends. Although the e-filing process is fairly simple and smooth, you don’t want to commit silly mistakes and delay your application. Here’s a checklist to avoid silly mistakes:
Not filing taxes as TDS is deducted
It is a common misconception that you need not file returns if it has already been deducted by your employer as TDS. Most people avoid filing taxes thinking that their net income after exemptions is below the taxable bracket.
But, these assumptions are not correct. Every individual must file his returns.
In case of TDS deducted by your employer, the amount is held by the Income Tax department and will be refunded (if applicable) only after you have completed self-assessment and filed your taxes. If you delay filing your taxes, you may even incur penalties.
It is very important to maintain your tax record even if you are not in the taxable income bracket as tax return papers are required when applying for a loan.
Incorrect or outdated personal information
One of the most common mistakes when filing income tax online is giving incorrect or outdated personal information.
Double check your PAN card number and date of birth, and update your mailing address, email and mobile number while filing your taxes.
Email correspondence and OTP passwords require that your mobile number and email are up to date at all times, so that you do not miss any communication from the IT department.
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Overlooking details of exempt income
Even if certain incomes may be exempt from tax, it is essential to report them while filing taxes. For instance, dividend income from the Indian companies and long term capital gains on various securities are exempt from income tax; there is a popular misconception that these incomes need not be disclosed in the returns.
But the investment company or the brokerage house will always send these details to the I-T department and in order to avoid any complications in future you must report them while filing your returns.
Claiming exemptions twice
This is a very common error, especially when you’ve switched jobs in the same financial year.
Owing to multiple Form 16s, from different employers, you might enter income exemption details like the ones claimed under 80C more than once.
One needs to be very careful in filling details of the income from multiple employers so that there is no discrepancy in the records of the IT department.
Not reporting income of a minor
If you have any investments in your child’s name who is a minor, you must club the income earned in his or her name with yours, while filing income tax returns. So your total net income will be inclusive of that earned in your child’s name.
Illustration: Uttam Ghosh/Rediff.com
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