Mistakes to avoid while filing tax returns

Filing the right and accurate ITR before the due date is important for every tax-payer who is required to file tax returns. Any individual whose income is over Rs 2.5L for those aged under 60 is liable to file tax returns. Some of the mistakes you should avoid while filing tax returns are 1. Not accounting for interest income from Savings Acct & FDs💰 We have amounts deposited in the Savings account which is often linked to Sweep In FDs. Interest paid on a savings account is exempt up to Rs 10000 under Sec 80 TTA for individuals and Rs 50000 under Sec 80TTB for senior citizens. Interest earned on all kinds of FDs is taxable. So it is important to include this income in your tax return even though it is not taxable to a certain limit. 2. Ignoring clubbing of income 🔗 There may be instances where the income of your spouse or your minor child is clubbed with your income. It may be when the money you gifted is used for investment and interest is earned on it, etc. Including that income in your tax return is mandatory. 3. Not including dividend income💲💲 From the FY 2020-21 onwards, any dividend earned from equities or mutual funds becomes taxable for investors at the slab rate. This was earlier considered tax-free. This income should be declared in your tax return. 4. Failing to reconcile income and TDS with Form 26AS 🎯 Form 26 AS is your Annual Tax statement which will have details of all the income paid to you, tax deducted, and many more details. The figures you put on your tax return have to match the ones on your Form 26AS. If the figures differ then you may end up getting a notice from the IT dept or a lesser amount of refund. Income shown in ITR should not be less than the one reflected in Form 26AS. 5. Using the wrong ITR📃 Different ITR forms are allowed to be used as there are different sources of income. Make sure you use the right ITR form applicable to your sources of income. 6. Not carrying out E-verification of IT return📱 After filing your IT return, it is mandatory to verify the return immediately or within a period of 120 days. There are many easy ways to verify your IT return, like from your net banking account, through Aadhaar OTP, etc. Missing this step will affect the processing of your IT return. 7. Analysis of the Old vs New Regime🔀 From FY2020-21 onwards, you have the option to file ITR under an old regime with available deductions & exemptions. Or you can file your ITR under New regime with a lower rate of taxes but without claiming a few deductions & exemptions. So don't forget to compare both regimes & select the best one to optimize your tax saving.