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18 Mistakes You Should Avoid While Income Tax Return Filling. A.Y. 2019-20

Avishek Mukherjee

Hello Taxpayers!

The return filing period for the Assessment Year 2019-20 is knocking the door.

You are all busy to ensure the fulfillment of the required amount of tax deduction right now.

Some of you are busy to make proper tax planning to reduce tax liability. For example, payment of the final advance tax before 15th March 2019.

But my friend, if you make a mistake in the total process of return filling, your all efforts will be failed.

There are various common mistakes you have done at the time of return filing. Some of them are due to lack of knowledge and some of them are just for tax avoidance.

Remember, the penalty of misreporting or under-reporting of your income is so high.

Let us discuss the mistakes you should avoid while return filling.

# Avoid Misconception about Return filling

You have to file your ITR if your total income is more than the minimum limit. Here the amount of minimum limit is given below

Particulars Minimum Limit
Resident Individual who is of the age of 80 years or more Rs. 500000
Resident Individual who is of the age of 60 years and above but less than 80 years of age Rs. 300000
Any other resident individual who is less than 60 years of age Rs. 250000
Any Non–Resident Individual irrespective of his age. Rs. 250000

Now the important point is the above limit must calculate without considering the deduction under section 80C to 80U.

Not clear? Let us take an example. Suppose your total income is Rs. 284000 in the relevant Previous Year. The amount of deduction is Rs. 35000. After considering the deduction amount your taxable total income is Rs. 249000 i.e. less than Rs. 250000.

Now you can tell me that you are not eligible to file IT return as the income is less than the minimum limit.

But the fact is a little different. As your total income before considering deduction is more than the minimum limit i.e. Rs. 284000, you have to file your IT return.

# Provide Correct Personal Information

You have to furnish different information at the time of return filling such as your name, address, PAN, AADHAR number, date of birth etc. You have to ensure that all the information must be correct.

Generally, the Income Tax Department makes communication with you through your mobile number and email id. So, in case of any wrong or incorrect information, you will miss any important notification.

Again, you have to provide complete details of bank account like the name of the bank, IFSC code, account type, and the account number. In case of any wrong information about your bank account, you may face serious trouble to getting the refund.

#Ensure Your Nature of Return

You have to inform about the nature of your return.

A return may be an original return or a revised return or any return against a particular notice.

In case of revised return or a return against any notice, the acknowledgment number of the original return, date of original return etc are required.

# Clear Idea about offline or online filling

A return may be file through offline or online mode. However, you can’t choose the offline mode in every aspect. There are various cases where the electronic file of your return is mandatory. For example, if you want to claim your refund or if the total income is more than Rs. 500000 or the books of account is liable to get audited etc.

# Choose Correct ITR Form

It is very much essential to choose the correct ITR Form.

For example, a small businessman can file his IT return as per the presumptive taxation scheme under section 44AD. In that case, the correct form is ITR-4.

However, if he is a commission agent then ITR-3 is required.

In that case, ITR-4 will be the wrong choice.

So, it is advisable to choose the correct ITR form according to your source of income.

#Choose correct Assessment Year

You must be so careful to choose the Assessment Year. Basically, in case of offline return filing, this kind of mistakes may happen.

In the case of online filing, it is very rare to make this kind of mistake.

Mentioning the wrong assessment year means your return is defective return. In that case, you may face some serious problems.

For example, as per 26AS, you are eligible for a refund of Rs. 10000. Unfortunately, you have filed your return mentioning wrong Assessment Year. In that case, you are not eligible to get the refund.

Don’t worry. You can rectify your return by filing a revised return.

#Disclose your every Source of Income

Please don’t try to hide any income source. It is not a good practice my dear friend.

It is very common to not disclose the interest income of the savings bank account. Generally, the amount is not so high.

But if you do not disclose it, you will miss the deduction under section 80TTA.

Again, another source of income is “Income from Capital Gain”. It is also avoided by many of the taxpayers. You have to disclose it even if it is exempted from tax. Otherwise, you may receive notice from the department.

#Comparing Form 16 with 26AS Statement

If you are a salaried employee, must compare your Form 16 with the 26AS statement. If there is any mismatch, you may lose your refund, if any. Again, you may liable to pay more tax also.

In 26AS, all the details about your advance tax, self-assessment tax, TDS etc are found. You must check it before your return filling.

#Pay your Advance Tax on time

You must pay your advance tax on time. Otherwise, interest will charge for your delayed payment or not payment of advance tax.

Due date of Advance Tax

The due date for payment of Advance Tax For Any Assessee other than the mention in column 3 Assessee covered under section 44AD/44ADA
On or before 15th June of the Previous Year Up to 15% of the Advance Tax N.A.
On or before 15th September of the previous year Up to 45% of the Advance Tax N.A.
On or before 15th December of the Previous Year Up to 75% of the Advance Tax N.A.
On or before 15th March of the Previous Year Up to 100% of the Advance Tax Up to 100% of the Advance Tax.

In the case of 2nd, 3rd and 4th installment, the amount will calculate after reducing any amount paid in the earlier installments.

Interest on delayed payment

There are two types of interest charged related to payment of advance tax. They are as follows:

a) Section 234B (Interest for default in the payment of Advance Tax)

Reason for Interest The amount on which interest is charged Rate of interest The period for which interest is charged
Assessee failed to pay the entire advance tax On total amount of Tax Simple Interest @ 1% per month or part of the month From 1st April of the A.Y. to the date of determination of total income under section 143(1) or to the date of regular assessment.
Advance Tax has been paid but it is less than 90% of the Assessed Tax On the balance amount i.e. Assessed Tax minus

Advance Tax

 Simple Interest @ 1% per month or part of the month

b) Section 234C (Interest on deferment of Advance Tax)

Due Date Reasons The amount on which interest is payable Rate of Interest Period of Interest
On or before 15th June Amount paid is less than 12% of Assessed Tax 15% of Assessed Tax minus Advance Tax Simple Interest @ 1% per month 3 Months
On or before 15th September Amount paid is less than 36% of Assessed Tax 45% of Assessed Tax minus Advance Tax Simple Interest @ 1% per month 3 Months
On or before 15th December Amount paid is less than 75% of Assessed Tax 75% of Assessed Tax minus Advance Tax Simple Interest @ 1% per month 3 Months
On or before 15th March Amount paid is less than 100% of Assessed Tax 100% of Assessed Tax minus Advance Tax Simple Interest @ 1% per month –

Here assessed tax means “Tax on total income minus TDS, TCS, Relief under section 90/90A/91 and tax credit under section 115JD”.

#Disclose your income from house property.

If you receive any rental income from your house property, you have to disclose it.

Again, in case you have two residential house properties, one of your house properties will be treated as “Deemed to be let out” and another is treated as “Self Occupied”. Your deemed property will be taxable under the head “Income from House Property”.

However, from A.Y. 2020-21, you can declare two house properties as the self-occupied properties.

#Mention your income from the previous employer

You may change your job in a certain previous year. In that case, you have to inform the salary details of your previous employment. Please ensure the disclosure of this income in your return. Otherwise, it will be amount to tax evasion.

#Clubbing of Income

Clubbing of income means income of other persons included in your total income. Such incomes are:

The amount of tax payable by you shall calculate after addition of the above income.

#Disclose all your exempted income

Please disclose all your tax-free income. There is “Exempted Income” section in your IT return. So disclose it even if it is exempted.

#Mention all of your bank accounts.

It is a good practice of mentioning it.

Please don’t think that the Govt. has no record of your Bank A/C. IT department will easily trace your account through PAN if they want it.

Remember, it is your duty to disclose all of your bank accounts.

However, any dormant account is excluded from reporting in ITR.

#Disclose your foreign assets

It is mandatory to disclose your foreign assets and income from outside India if any. Otherwise, a huge penalty will be imposed on you.

#Ensure proper claiming of deductions

If there is any mistake to disclose all your deduction in the correct manner, you will not utilize the benefit of it.

If you report the amount in the wrong head, your deduction will be rejected.

For example, suppose you have a home loan. The principal amount of such loan shall be allowed as a deduction under section 80C. The interest portion will be deducted under section 24(b).

Again you can get an additional deduction of Rs. 50000 under section 80EE. (For entire knowledge you can read “How can home loan save your income tax”)

If you forget to take any of the above you may lose some benefits.

#File your return within the due date

From the Assessment Year 2018-19, a penalty has been imposed on late filing of income tax return.

If you will file ITR after the due date but before 31st December, then the amount of late file is Rs. 5000. If you will file after 31st December, the amount will be Rs. 10000.

However, if your total income is not more than Rs 500000, then the amount of penalty will be Rs. 1000.

For your knowledge, the due dates are as follows:

Assessee Due Date
i) A Company 30th September of the A.Y.
ii) A person whose accounts are required to be audited
iii) A working partner of a firm whose books of accounts are required to be audited.
iv) A person who is required to furnish a report under section 92E 30th November of the A.Y.
v) Any other persons 31st July of the A.Y.

# submit ITR-V within the stipulated time

It is very much important my friend. Otherwise, your return will invalid.

It is very easy to verify your return through e-verification.

You can e-verify your return by

You can see the procedure from the income tax portal.

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