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Blunders in filing Income Tax returns can invite I.T. Notice

The unpleasant and repulsive annual ritual of filing Income Tax returns is upon us. With July 31st, the last date of filing tax returns, approaching fast many of us must be experiencing elevated blood pressure levels and sleepless nights.

Howsoever obnoxious the task may be, we have to make sure that we avoid repeating the blunders commonly made by many taxpayers. I am sure you don't want to receive the Income Tax notice and go through the whole rigmarole again.

1. First and foremost, choose the right form applicable to you.

2. Don't fail to show the interest earned on your various Savings Accounts. The exemption of up to Rs.10,000 doesn't mean you are also exempt from reporting it in your returns. No. You have to include it as Income from Other Sources and then show it as deduction u/s 80TTA in Schedule VI-A of the form.

3. Make sure to also include interest on all your Fixed Deposits. These too routinely go unreported. However, with the technological advancements and RBI regulations in recent years, you will be caught if you fail to do so. By the way, FDs made in the names of your children and spouse too have to be clubbed.

4. Given the rapid rate at which people change jobs nowadays, having worked for 2-3 employers in a year is not uncommon. Make sure to obtain Form 16 from all the employers and report them in your IT returns.

5. As mentioned above, tax exemption is not equivalent to exemption from reporting too. In this category also fall the incomes such as PPF interest, Dividends, Capital Gains on which STT has been paid, Insurance maturity proceeds, etc., all of which must be disclosed in the return.

6. Double check the PAN no., address, IFSC code, Bank Account No. etc. as mistakes in these routine details are also quite routine.

7. Except one self-occupied property, all other properties are liable for tax. Even if they are not actually rented out, you have to add the notional rent as income and pay tax on the same.

8. As advised in the past, you are supposed to ensure that there is no discrepancy between your Returns and the details in Form 26AS (See 'You must verify Form 26AS before filing IT Return'.)

9. As advised in the past, TDS deduction is not the end of your tax obligations (See 'TDS is not the end of your tax trauma')

10. After filing the returns, make sure that you send the ITR V to the IT Dept's Bengaluru office within 120 days. Note that this must be signed in blue ink and sent by ordinary / speed post only; private couriers are not acceptable.

Don't invite unnecessary complications. File it Right and File in Time.

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