5 careless tax mistakes you must avoid

Or else, be ready for tax trouble...

People often make some careless mistakes while filing Income Tax Return (ITR) which can either make their return defective or provide hardship in getting income tax refund. Here are the five common mistakes which you can avoid for seamless filing the ITR.

Incorrect personal correspondence details

There may be a mistake of providing incorrect details such as misspelled names, incorrect PAN, etc.  Some people give their official email IDs or contact numbers as their correspondence details. Rather, they should furnish personal email address or contact number. Because, people frequently change their jobs and once they leave their jobs, their official contact details will be deactivated. Thus, no intimation can be sent to the taxpayer by the Income Tax Department. Similarly, people often end up writing misspelled names in ITR. As a result, ITR-V is issued on a wrong name which eventually creates problems while applying for home loans or visa applications. So make sure that you write correct PAN, name, personal contact details and permanent address in your ITR.

Choosing incorrect ITR form

It’s quite often seen that people are not aware about which ITR form they should use to file their return, and often they choose the wrong ITR form which then creates problems for them. For instance in many cases it was observed that people enjoying commission incomes were giving details of their commission in the salary column of SAHAJ Form. Whereas the commission income is treated as business income and therefore ITR-4 should be filed by them. Similarly, many taxpayers have the habit of reporting rental income in ‘Income from other sources’ in SAHAJ form and whereas ITR 2 should be used to report rental income under the head ‘Income from house property’. So, it is very important to select the correct ITR form available to file the ITR.

Typo errors while entering TAN

Typing an incorrect Tax Deduction Account Number (TAN) of the deductor is one of the most often committed mistakes which lead taxpayers to denial of tax credits while filing the ITR. In some cases, the taxpayers even get demand notice from the income tax department due to such type typo errors.

TAN is a sort of identification number issued to the deductors of TDS. Therefore, if someone mentions incorrect TAN in their tax return, then the income tax department cannot locate the person who has deducted your TDS and hence it denies tax credit. So, you should be very careful while typing the TAN of the deductor in the ITR.

Incorrect bank details

People often furnish incorrect bank details knowingly or unknowingly. They either misread or miswrite account numbers, IFSC code, MICR code, etc. If any of the account numbers is wrongly quoted, there may be a loss of a portion of refund or complete refund. So, make sure that you provide correct bank details.

It’s worthwhile to mention here that from this financial year the taxpayer has to report all their bank account details in their ITR, instead of previous trend of just reporting details of one bank account.

Failure to E-verify the ITR or dispatch ITR-V

Don’t ever think that your tax filing process is complete just by submitting the ITR online. In fact, you have to get your ITR verified by any one of the following modes.

• Electronic verification of ITR or
• Dispatching ITR-V to CPC, Bangalore

Electronic verification of ITR

The income tax department has suggested two methods of verifying the ITR electronically. The first method is through linking your Aadhar Card with your PAN and thereafter generating OTP (one time password) which gets delivered at your registered mobile number and thereafter you will have to use this OTP to validate your e-filing.

The second method is through generating electronic verification code (EVC) which gets delivered at your registered mobile number or email ID. This electronic verification code is then used to verify your ITR. The main drawback of second method is that it cannot be used by those taxpayers who are seeking any tax refund or if they have total income of more than Rs 5 lakh.

For electronic verification, you need to login to the site of Income Tax -- incometaxindiaefiling.gov.in -- and navigate to ‘E-Verify Return’ option of the main menu.

Dispatching ITR-V to CPC, Bangalore

If you have not verified your ITR electronically then you are supposed to send ITR-V to CPC, Bangalore within 120 days of e-filing.  ITR-V is the acknowledgement form that you get after filing your ITR. It must be signed and send to CPC, Bengaluru within 120 days of e-filing your ITR. The address to send via ordinary post or speed post is:

Income Tax Department-CPC,

Post Box No-1,

Electronic City Post Office,

Bangalore-560200, Karnataka

NOTE: It must not be sent by courier or other means.

However, if you sign the return by using a digital signature, you do not require sending the printed ITR-V form to CPC, Bangalore.

If you forget to e-verify your income tax return or fail to dispatch ITR-V to CPC Bangalore then it will be considered as if you have not filed your ITR and the income tax department will not process your ITR.

In a nutshell, by taking care of above mentioned minor mistakes, you can easily file your ITR without any hassles.

Earlier in the series:

Tips to avoid tax woes!

8 ways filing income tax return is different this year

8 steps to file income tax return without Form 16

Understand Form 16 before e-filing your income tax return

Photographs: eFile989/Creative Commons

mytaxcafe.com helps people e-file their income tax returns