Top 5 common mistakes to avoid while filing your income tax returns

Here is a list of things to help you sail through

economy news | With the due date of July 31 fast approaching, it is that time of the year again when the taxpayers need to file their I-T returns. After all, filing of tax return is compulsory for everyone whose gross total income exceeds the basic exemption limit. The basic exemption limit for individuals is Rs 2.5 lakhs and for senior citizens, it is Rs 3 lakhs. So, if your income exceeds this limit, you need to file the tax return by the due date. Filing of tax return requires caution to avoid mistakes. Keeping in mind few things can make your tax filing a breeze.

Here is a list of things to help you sail through:

 

1. Choose the right ITR Form applicable

There are total 7 ITR forms available for e-filing.This year a lot of changes has been made in these forms. Make sure that you choose the right ITR form applicable to you. For example, there are two I-T return forms - ITR-1 and ITR-2 available for salaried individuals at the moment, and your sources of income will decide which form to use. ITR 3 is applicable for the person having income from business whereas last year ITR 4 was applicable for business income. So pick the correct ITR form. The Tax Department will refuse to accept your form in case you have chosen the wrong one.

2. Claim all the Deductions

Ensure that you have claimed all the deductions allowed under various sections of I-T Act that you are eligible for. For example under Sec 80C- PPF, PF, school tuition fees of children etc, under Sec 80D- Health insurance premium and so on.In case of Salaried individuals, they can claim such deductions even if it is missed in Form 16, provided that such investments are done before 31st March 2017.| economy policy

3. List all sources of income including Interest Income

Firstly, you need to identify your sources of income under different heads. Under the I-T Act, all incomes earned by persons are classified into five different heads, such as income from salary, income from house property, income from business or profession, income from capital gains, and income from other sources. Thus, you should identify all your incomes from different sources, just to ensure that you haven't missed out something while filing your return. Many taxpayers do not report interest income in returns thinking that since the tax has already been deducted by the bank. But even though TDS has been deducted on any of your income, it has to be disclosed in your return.