Are you filing ITR? 5 mistakes you should avoid while filing income tax returns

New Delhi: The income tax return (ITR) filing deadline for fiscal year 2021-22 is July 31, 2022. As the deadline approaches, taxpayers are busily reviewing their financials and accompanying papers. However, many people make typical mistakes when filing ITR, which result in ITR rejection, income tax notice, or refund delay.

Most of us believe that our ITR is correct until we receive a notice of incorrect income tax return filing. The majority of these errors are the result of incorrect interpretation of tax regulations or ignorance. Here are five frequent blunders that individuals make while filing their ITR:

Not taking credit for tax deduction:

Taxpayers frequently receive a smaller refund than anticipated. Sometimes they receive demand notifications instead of refunds, and the most prevalent cause for this is that they do not receive credit for TDS deducted under the appropriate head of income.

Speculative income vs regular business income:

One of the most common errors made by taxpayers is the failure to deduct losses from speculative activities such as day trading. We occasionally experience a loss from speculative income and a profit from ordinary share or F&O trading.

Bank validation issue:

The third most common reason for ITR refund delays is problems with bank account validation. Make sure your PAN and AADHAR are linked. It facilitates bank validation for speedier refunds and e-verification for faster processing.

Wrong ITR form selection:

The fourth most common error is picking the incorrect ITR form. If you own more than one dwelling, you cannot submit ITR-1, for example. As a result, the correct ITR form must be determined and filed.

The ITR-1 is a simplified tax return that can be completed by a resident taxpayer with a total income of up to Rs 50 lakh and income reported from sources such as salary, other income, and only one dwelling property. It should be noted that the return cannot be used by a company director, an individual with agricultural income above Rs 5,000, or an individual with capital gains income.

Tax can't be saved beyond form 16:

Salaried people are mistaken in believing that they cannot save tax after completing Form 16. They file ITRs based on tax computations from Form 16 without reexamining tax deductions.