Filing your income tax return can be a highly stressful task this year. Waiting until the last minute only adds unnecessary worry that you can easily avoid. With deadlines approaching, now is the critical time to do so if you haven't organised your paperwork yet. However, be cautious of common mistakes, which can lead to significant issues.
Choosing the correct ITR form for filing your returns is crucial. This ensures that the income tax department can process your return accurately. The choice of the ITR form depends on the type of income and the taxpayer's category.
"For the financial year 2023-24, the Income Tax Department provides seven forms: ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7, designed for various income sources and taxpayer categories such as individuals, HUF, and companies. Choosing the correct form is essential to ensure adherence to tax regulations," stated Abhishek Soni, CEO and Co-founder of Tax2win.
The tax department has issued tax return forms with clear instructions on which form can be used by which taxpayer. Aarti Raote, Partner at Deloitte India, explained, "For instance, if a taxpayer earns income from capital gains or has total income exceeding ₹50 lakh, they cannot use Form 1. Using the incorrect form could result in the tax return being deemed invalid, potentially leading to missed information or unreported income. This may incur interest and penalties."
When filing returns, providing the correct Assessment Year (AY) is crucial. According to Tax Expert Manikandan S from Cleartax, "For FY 2023-24, the corresponding AY is 2024-25. Incorrectly mentioning the AY can lead to potential issues such as double taxation and unnecessary penalties."
"File your income tax return diligently to avoid penalties or tax notices due to errors," advised Manikandan S. "Maintaining accurate records, claiming eligible deductions, and reporting all sources of income ensure compliance with tax laws and accurate tax payments."
Abhishekh Soni added, "Taxpayers can file a revised return if they mistakenly use an incorrect form. However, deliberate underreporting or choosing the wrong ITR form, leading to incorrect income disclosure, can result in penalties ranging from 100% to 300% of the tax amount due."
The last date to file an income tax return (ITR) for the Financial Year 2023-24 (Assessment Year 2024-25) is July 31, 2024. If you miss this deadline, you can still file a belated return by December 31, 2024.
Filing your tax return involves more than just submitting the ITR form. It's essential to verify the return within 30 days of filing. Failure to verify will result in the IT department not processing your tax return and deeming it 'invalid'. If you receive a notice and do not respond within the given timeframe, it will be considered as if you never filed a return. This could lead to applicable non-filing fees and penalties.
Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
