What precautions should you take while filing I-T returns?

Apr 30, 2018 | 1 year ago | Read Time: 3 minutes | By iKnowledge Team

The tax-filing date is approaching. Every tax-payer is busy fine-tuning his/her tax plan, investing in tax-free instruments, and preparing the income tax returns. Filing tax returns is a technical subject. If you do it yourself, you may end up making some mistakes. And, you may have to pay a fine for that. So, be careful when you file your returns. Here are some precautions you must take:

  • File within the due date

The primary thing is to file your returns within the due date. A lot of complications arise when you don’t do that. You may have to pay a penalty and an interest. You cannot carry forward your capital losses to the next year and claim certain exemptions. To avoid these, file your returns within the due date

  • Choose the right ITR form

The next thing is to choose the right income tax form. There are several forms, like ITR 1, ITR 2, ITR 3, and so on. If your income is less than Rs 50 lakh from salary or pension, property, and other sources, you should use ITR 1. If your income is more than Rs 50 lakh and includes capital gains, profits from partnership firms, etc., you must fill in ITR 2. So, assess your income and choose the correct form.

  • Record your income from all sources

There are five heads of income. These are salary, property, business or profession, other sources, and capital gains. Make sure you record the entire income you earned in a financial year under the respective heads. Do not miss out anything.

  • Enter the correct Aadhaar and PAN details

Your Aadhaar number and PAN are essential for identification and verification. So, make sure you enter the correct PAN and Aadhaar number in the return form to avoid any ambiguity.

  • Precautions for changing jobs during the year

When you change your job, there is an impact on your tax returns. You must declare the income you earned from both the jobs in your tax file. You will get a Form 16 from the previous as well as the new employer. You should use both. Find out if both the previous and the existing employers have deducted the correct tax before crediting your salary. You may have some tax due for a part of the income unaccounted for by your employer(s). So, find it and pay it with your tax return.

  • Figure out the TDS and claim refund, if any

You earn certain types of income after the tax is deducted at the source. This tax deducted at source (TDS) is usually calculated at 10%. But, you may not have any tax liability at all. In that case, the TDS—or a part of it—will be refunded to you. Or, you may have a higher tax slab of 20% or 30%. In that case, you owe the government more tax than what has been deducted. So, when filing your returns, calculate the correct TDS. Form 26AS contains the details of all TDS deposited on your behalf. Cross-check the TDS mentioned in Form 26AS and that in your returns to avoid mistakes.

  • Disclose interest earnings

Your savings account interest earnings are tax-free up to Rs 10,000. Moreover, there are other tax-free interests, too, which you may not deem necessary to record in your returns. You are wrong. You should disclose all your earnings even if they are tax-free.

  • Keep tax proof

To claim tax exemptions and deductions, you need to submit proof of the relevant expenses and investments. Keep the proof handy to submit them whenever required.

  • Declare your assets and liabilities if your income is above Rs 50 lakh

If your income is more than Rs 50 lakh, Income Tax rules need you to declare your assets and liabilities. So, remember to do that if you fall in that category.

It should be easy to file your returns if you follow the above-mentioned guidelines. So, be careful and follow the instructions.

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