By Priyanka Sambhav
With each passing day we are moving closer to the last date of filing income tax return. For the financial year 2019-20 you need to file your return by 30th November 2020. As you prepare yourself for the return filing here are 6 mistakes that may end up with a tax notice.
1) Chose the right ITR form
Many a time people pick up the wrong form which is not applicable to them. Filing return in a wrong form can make your return ‘defective’. Go through all your sources of income and accordingly select the return form. For example, ITR-1 is for those taxpayers who earn salary income and has on house property and interest income. But if apart from the salary income you have had some long term capital gains from selling equity shares or MF then you have to file ITR 2. If you are earning a business income then ITR3 or 4 would be your return form.
2) Reporting Interest Income
Income earned from interest has to be reported in your IT return. Whether it’s on fixed deposit, recurring deposit or your savings bank account. You may not have to pay tax on it but you have to mention this income in ‘Income from other sources’ head. Interest earned on FD and RD are taxable but there is a deduction allowed on interest earned from savings bank account up to a certain limit. As per Section 80 TTA interest up to 10,000 is not taxed for individuals below the age of 60. Senior citizen gets this deduction under section 80TTB and they can claim deduction up to 50,000. The interest under section 80TTB can be earned from FD, Recurring deposit, savings account and post office schemes.
3) Even if your income is below Rs 2.5 lakh you may have to file your It Return
As per section 139(1) of the IT Act, it is mandatory to file a return even if your income is below Rs 2.5 lakh in certain cases. These conditions are-
(a) If you have deposited more than Rs 1 crore in the current bank account
(b) If you have spent Rs 2 lakh or more on self or any other person for a foreign travel
(c) If your electricity bill exceeds Rs 1 lakh
4) Must report all your bank accounts
A taxpayer must report all the bank accounts that he /she holds. Earlier you just had to mention a single bank account where you wanted to receive your refund but from 2014-15 it has been made mandatory to inform the Income-tax department about all the active bank accounts in your name. However, you can exclude a dormant bank account.
5) Mindful of the job change
If you have changed jobs in the given financial year then do not forget to take in consideration of both the incomes and cross-check the deductions too. Sometime it may happen that both the employer gives you the benefit of deduction and this could create a huge mismatch between your Form 16 and 26AS.
6) Forgetting to E-verify your return
Last but not the least, once you have filed your tax return you must not forget to e-verify your return You can do this either by Aadhar based OTP or through net banking or you can send this to manually to CPC Bengaluru. Your return can be invalidated till if you fail to e-verify your return by filling out ITR-V within 120 days.
