India’s maze of myriad rules, regulations, and deadlines can make income tax returns feel like navigating a maze. Best efforts still seem to yield common issues that lead to delays, rejections, or penalties. This blog will discuss the most common issues faced during income tax returns in India and provide a better practical solution to avoid them.
Common Issues in Income Tax Returns
Incorrect Personal Information
One of the most common mistakes people make in income tax returns is that of personal information. This may include errors in name, date of birth, PAN, and bank account information. Even a small error can delay processing your return and receiving refunds.
Solution: Double-check all personal information before submitting your return. Income tax services will help ensure your details are correct.
Mismatched Income Details
Another common issue is mismatched income details. This takes place when your reported income in the tax return does not match your income details in Form 16, Form 26AS, or your AIS.
Solution: Carefully review your Form 16, Form 26AS, and AIS to ensure all income is accurately reflected in your return. By cross-checking these documents, you can avoid mismatched income details.
Missing Deductions or Exemptions
There are various items of deduction and exemption for which a taxpayer remains ignorant. Thus, his tax liability exceeds what he has to pay.
Solution: Ensure to claim all deductions and exemptions to which you are entitled under various heads of the Income Tax Act. The services on income tax may also be referred to in respect of permissible deduction.
Inadequate Calculation of Tax
Computation errors relating to taxable income and tax liability may arise. This is based on miscalculations or failure to understand tax regulations.
Solution: Use income tax return online tools that deliver clear and correct tax computations. The majority of them possess calculators that help ensure the accuracy of computations.
Non-Disclosure of Foreign Assets
Failure to report foreign assets and income is a serious issue that may lead to penalties and legal consequences. The Income Tax Department has strict rules regarding reporting foreign income and assets.
Solution: Ensure you declare all foreign assets and income in your tax return. You can consult with tax consultants to comply with reporting requirements.
Delays in Filing Returns
Missing the income tax filing date is one of the common mistakes that attract penalties and interest charges. Late filing also delays the processing of refunds.
Solution: Mark important dates on your calendar and set reminders to ensure you file your return on time. Income tax services often provide reminders and alerts to help you meet deadlines.
Errors in Bank Account Details
Providing incorrect bank account details can lead to delays in receiving your income tax refund. The refund may be credited to the wrong account or may not be processed at all.
Solution: Verify your bank account details, including account number and IFSC code, before submitting your return. Income tax return online platforms often have validation checks to ensure accuracy.
TDS Mismatch
Mismatch at source: mismatch of TDS declared in 26AS in Form with claimed credit of TDS by you.
Solution: Keep scanning Form 26AS for checking all details of TDS against which a claim is also done in the tax return. There would be some inconsistencies that cannot be ignored at the deductor’s end; seek to discuss with that deductor directly or meet and then see that an effort is there at your level and further through your consultants also with him.
Common Income Tax Returns Errors: How to Avoid Them
Seek Professional Help
Using professional income tax services reduces the risks of making an error in your return. Consultants with professional knowledge on complex tax issues are capable of managing complex matters in line with the law and taxation regulations.
Online Sites
Online filing of your income tax return through trusted sites can make the process much smoother and less prone to errors. The sites have easy-to-use interfaces, guides step by step, and automated calculations.
Be Updated
Keep abreast of all tax laws, rules, and deadlines. Keep yourself updated with updates from the Income Tax Department and newsletters from reputable tax consultants.
Accurate Records
Maintain accurate records for your income tax return.
Keep all the income, expenses, deductions, and investments during the year. This will make it easier to compile accurate information when filing your return.
Cross-Check Documents
Before submitting your return, cross-check all relevant documents, including Form 16, Form 26AS, AIS, and bank statements. Ensure that all details match and are accurately reported in your return.
Plan Ahead
Start preparing your tax return well before the income tax filing date. Avoid last-minute rushes that can lead to mistakes and missed deadlines.
Verify GST and TDS Status
For business owners, ensure that your GST return status is updated and all TDS payments are accurately reported. Regularly check your GST company account for any discrepancies and address them promptly. For individuals, monitor your TDS refund status to ensure timely refunds.
It is tough to navigate the complex transactions of an income tax return in India, but sometimes that can be better avoided, especially when you use a proper, professional approach. With expert help from tax consultants, reliable online services, and staying up-to-date, you will be able to minimise errors and maximise your tax savings.
OUTBAY Financial Solutions offers complete expert financial advice and Income tax services for overcoming complexities involved with income tax filings. Experienced consultants with profound expertise at every stage guide personal guidance. So your returns will be duly filed and placed accurately within prescribed deadlines. For needs that pertain to compliance for the company, be it status inquiry regarding TDS refunds, INCOME TAX filing with them would address any requirements regarding it. Speak to an advisor at OUTBAY today for more on its holistic financial solutions and secure your future financially.
