Avoid filing ITR at the last hour and in a hurry without the help of a proper tax consultant having a thorough knowledge of tax before filing an ITR must scrutinize all the relevant papers.
Incorrect personal details: General mistakes of e-mail id, mobile no., complete address, bank details, etc, may result in a delay in refund or notice may not be served in time to the assessee resulting in other consequences.
If you are a partner or director in a company or signatory in any foreign bank account ensure to provide correct details otherwise serious consequences including prosecution
Correct details of residential status based on days of stay in India or abroad based on supporting evidence.
Incorrect classification of nature of income while reporting in ITR, selection of wrong head of income may result in various disallowance of expenditure or available allowance not claimed may result into higher tax liability. Therefore it is important to select the correct head of income.
Deduction for professional tax paid while reporting salary income besides other deductions available to the assessee. No reporting of income of the last job left during PY.
Claiming deduction While reporting remuneration and interest by a partner from a firm or designated partner from LLP, such partner may claim expenses such as transport expense, conveyance, etc. against such income
Interest income left to be reported such as interest on saving account, income tax refund, FDR, etc- in assessment, AO may demand tax on such income without the deduction under section 80TTA/80TTB for senior citizens. Similarly non-reporting dividend income.
Self-occupied house property: two self-occupied house properties could be reported without any tax implication. Any house property purchased during the year must be reported to match the profile and AIS/TIS/26AS reporting.
Proportionate ownership share in a house property must be reported along with other co-owners and in the case of let out of the house property correct details of the tenant and the rental amount.
Mismatch of reporting of income without considering the transaction reported in 26AS, AIS, and TIS of the taxpayer.
Non-reporting of Exempt income such as interest on PPF, life insurance maturity proceeds, and other exempt income, etc in the ITR.
Clubbing of income: Income of minor or spouse to be clubbed in certain cases, simultaneously TDS benefits may also club.
If Loss suffered during the year under any head of income – ensure filing of ITR before the due date/ last date.
Set off of one head of income with losses of other head so as to minimize tax
Opting for section 115BAC or out of that option without considering the long-term impact in multiple AYs. There may be chances that you may save tax in a year but more tax liability in another FY. Further person not eligible to opt for section 115 BAC, if so opt may lose the saving of tax on deductions available from gross total income, therefore such options must be selected after thorough consideration.
Wrong reporting of capital gain transactions in the ITR or availing the wrong option resulting in high tax. There are options for different tax rates on capital gain with indexation of cost or without indexation of cost. Long-term Capital gain with indexation at normal tax rate @ 20% vs Long term capital gain without Indexation @10% under section 112A.
No reporting of capital gain arises on switching of units of mutual funds, generally left to be reported in ITR as no corresponding entry in the bank account but there is income such as capital gain on such switchover.
None filing of ITR by the legal heir or successor in the case of death of assessee during the year, death of assessee does not absolve the legal heir from the compliances and payment of tax.
Mismatch of gross receipts as per GSTR-1 and GSTR-3B vs 26AS vs ITR
Section-44AD/ADA Wrongly opted whereas assessee not eligible to opt particularly in the case of agency business where tax deducted U/S 194 H on commission/ brokerage
Details of assets and liabilities must be computed and reported even in ITR-4 availing the option of Section-44AD/ADA.
Expenditure claimed without any payments from the bank or without any invoice or claiming deduction without valid evidence
Filing of return without scrutinizing the bank statement for the year, or cash payment or cash withdrawal from the bank, or cash deposit into the bank. There are chances that some of the income may be left out in the ITR inadvertently may result in a defective notice or scrutiny of return.
Mismatch in the reporting of various details in different schedules resulted in defects in the return and notices may be issued for that, harassment for the assessee.
Claiming any Relief u/s 89 (Arrear of salary ) without Filling of Form 10E before the filing of the return – relief may not be allowed resulting in a tax burden.
Ensure correct detail in schedule AL of the ITR – Details of assets and liabilities other than business assets.
Opting for none maintenance of books of accounts whereas the assessee has a liability to maintain books of accounts. notice may be issued for defects in the return
Mistake in claiming depreciation due to the wrong rate of depreciation, and the wrong actual cost reported in the return.
Cash deposits in the banks are left to be reported as income in the ITR, the source of cash deposits must be ensured and accordingly reported in the correct head of income.
Ensure new deductions available under chapter VIA like the purchase of an electric vehicle under section 80EEB (1.5 lakhs) deduction of interest on housing loan 80EE/80EEA, Interest on loan for higher education 80E, a donation to political party 80GGB/80GGC, inter-corporate dividend, 80TTA/80TTB, 80GG ( rent paid – other than the person getting HRA), etc.
Avoid claiming of fake deductions without payments where payment is required for claiming deduction or exemption such as HRA exemption, the deduction for rent, deduction for school fees, medi-claim etc.