FIVE POINTS TO REMEMBER WHILE FILING YOUR ITR |
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If you are filing your Income Tax Return for the first time then you may find it a difficult task as there are number of documents and forms involved. Many times first time return filers commit such mistakes which end up getting notice from Income Tax Department. So, you should take care of few things to avoid getting tax notice.
a) Don’t forget to report income from last job: Whenever you change job before the end of the financial year you are required to report the income from your previous company as well along with the income from the current job. In a case, where income from the previous job has not been reported, there are chances of negative outcomes on your TDS certificates, Form 16 and Form 26AS. These can lead to serious issues in future.
b) Choose the correct ITR Form: As there are several categories of ITR forms choosing wrong form is one mistake that most first time ITR filers do. Using a wrong ITR form to file returns may invite a notice from the tax department, and the return filed would not be considered. In a case where a wrong form has been selected, the individual will get a window to file a rectified return within 15 days from the date of receiving the notice.
c) Non-reporting of tax free income: It is important to note that every taxpayer is required to report income earned from all sources irrespective of the fact that the income is taxable or not. But most of the first time filers ignore to report such income. This can attract penalty. But, if you report them under the right head and then claim exemption appropriately on these, then you will certainly get back a refund.
d) Never ever under-report your income: It is strongly advised to never under-report your income. This is one the biggest mistakes first-time income tax filers do. You should avoid any kind of underreporting of income as it will get you into serious trouble. The Income Tax Department is closely watching such transactions and recently has identified many such cases and imposed heavy penalties. Often there are cases when individuals forget to mention interest from savings bank account or fixed deposits but make sure that you file these under ‘income from other sources’. It should be noted that there is a tax relief for interest earned from savings bank but it is capped at Rs 10,000. You have to mention any amount above the limit.
e) Must file your ITR: Some people with income below the taxable limit i.e. Rs 2.5 Lacs, 3 Lacs or 5 Lacs as the case may be, refrain from filing income tax return but do remember that essentially dampens your financial credibility, thus creating problems at the time of applying for loans or and plastic cards. Please note that it is not necessary to file it if your income level is lower than the taxable amount but at the same time it is advocated that it is a good practice as it is closely monitored by the authorities.
For any queries/clarification you may contact
Bharat Poplani
B.Com, FCA, LLB
+91-9646380245