Filing Income Tax Return? A Checklist of Errors to Avoid

Income tax return is basically a self-assessment and income validation tool – a review of taxes paid and income accrued during the year. According to IT Act 1961, ITR should be filed annually. By filing ITR, you are registering your proof of income with the income tax department and thereby authenticating it. It makes your earnings legal in the eyes of authorities.

In an ITR form, you either confirm to the tax paid by during the year or ask for a refund, after proving that you have paid more than your rightful liability.

If all this tax talk feel too confusing to you, we are here to help you with are some common errors to avoid:

When am I Required to File Income Tax Return?

Anyone whose gross total income exceeds 250,000 or 2.5 lakh for a given assessment year is required to file an IT return.  Gross total income is the income before any deduction under Sections like 80E, 80EE, 80 C, 80 CCD, 80G, 80 CCC, 80 CCG, 80D, 80E, 80EE and 80 GGA and 80 TTA. This is regardless of having already paid the taxes (Tax deducted at Source) or not.  So, do not be complacent if your salary receipt shows TDS component, filing ITR is mandatory anyways.

I have already made investments exceeding my taxable income, do I still need to file income tax return?

Let’s understand with an example:

Abhishek Motwani, an IT professional, earns 350,000 or 3.5 lakh per annum. This means his taxable income stands at 100,000 or 1 lakh. With the help of his father he makes investments worth over 1 lakh in various tax saving instruments.  Should Abhishek sit back and relax now that his tax liability has become almost zero? No! Even if your tax liability is zero, you have to file an income tax return. ITR is necessary to prove your tax saving investments to the government and thereby claim a refund.

Which ITR Form to be used to File Return?

This is one the most often asked question of all taxpayers. Depending upon the income situations, there are specific ITR forms to be filed corresponding to one’s income sources. The image below should help you clear your doubts on which ITR to file:

If you still have any doubts, you can use this simple tool to know your correct ITR and start efiling.

I have another source of income but it is inconsequential as compared to my main source of income? Do I need to declare it as well?

It is absolutely imperative to declare all source of income, no matter how small or inconsequential they might seem to you. One such common income is the interest earned on savings deposits. Interest income up to 10,000 on savings deposit is exempted from tax, according to latest rules. But interest on recurring deposits and fixed deposits are taxable at normal rates. ITR 1 is sufficient to declare this particular interest income.

However, if you have income as a proprietor or professional (self-employed) use an ITR4 form to declare this income.

Should I report income that I already know is exempted from income tax?

Income that come under the categories such as Long-term capital gains, dividends etc though exempt, need to be declared. Interest income from public, provident fund, dividend from stock investments are example of this. Please note that the brokerage house and the investment company will be filing this information with the IT department.

No Need to file Multiple ITR Forms for Multiple Form 16s

Job hopping has become very common with millennials and therefore there are multiple form 16s to deal with.  However, there is no need to file multiple ITRs for multiple form 16s. List all form 16s on one ITR1 form.

Important Note - Double Check Everything

Make sure to get your basics right such as right declaration forms, personal information such as correct PAN number, correct bank details, mailing address etc. Failure to file correct information will be treated as a failure to file income tax return by the IT department.

The last date for efiling of IT returns for individuals has been extended to 31st August.

Disclaimer: All information in this article has been provided by and Silicon India is not responsible for correctness of the data. Quicko is engaged in assisting in online ITR preparation and filing. You can sign up with and efile your tax returns within minutes absolutely free and also get maximum tax refund. 

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