Filing income tax returns can be an arduous process for many taxpayers in India. With numerous forms, calculations, and rules to follow, errors can easily creep in. This delay in processing leads to penalties or even rejection of returns.
The Permanent Account Number (PAN) is a key identifier when filing an ITR. Any mistakes in PAN details cause significant issues, so taxpayers must be extra careful when providing PAN information.
This article discusses the top mistakes taxpayers make concerning PAN when e-filing returns and simple tips to avoid them:
What are the Common Mistakes While Filing ITR?
Some of the common mistakes made while filing an income tax return using a PAN card are:
1. Wrong PAN Details
Entering an incorrect PAN number, even one digit off will result in rejection of your income tax return filing. Similarly, minor spelling variations between your PAN card and ITR form will lead to a mismatch. Even using initials over full names causes errors.
So, cross-verify your PAN details before submission and ensure they match exactly as per your PAN card. If there are errors, apply for a PAN correction before filing returns.
2. Mismatch Between PAN and Aadhaar
Linking PAN with Aadhaar is now compulsory. However, many taxpayers provide data that differs between the two. Even slight differences in date of birth or spelling lead to validation issues on the e-filing portal. First, link your PAN and Aadhaar if you haven’t done so far. Next, carefully check personal details for any mismatches and get rectifications done if needed.
3. Underreporting Income
Many miss out on reporting income from part-time work, interest earnings, investments, etc., while filing returns. This is tax evasion and can attract heavy fines based on undeclared income. Therefore, collect all income-related documents beforehand. Report every income source accurately in your ITR. This avoids penalties for underreporting.
4. Missing Out Deductions/Exemptions
Taxpayers often miss out on several tax-saving deductions and exemptions for which they are eligible. This includes Section 80C deductions on investments, insurance premiums, etc. or exemptions on HRA and LTA. Ensure you claim all deductions you qualify for by providing accurate investment-related expenses in your ITR. This helps reduce tax liability.
5. Wrong Bank Account Details
Incorrect or invalid bank details can lead to delays or failure to receive refunds. Many make mistakes entering account numbers or IFSC codes. Always double-check these details in your ITR form before submitting it. Provide the correct active bank account linked to your PAN so you can promptly receive refunds.
6. Choosing the Wrong ITR Form
There are seven different ITR forms now for various taxpayer categories. For instance, salaried employees should use ITR-1, and business people requiring audits should file ITR-5. However, many get confused when deciding on the right one. Carefully read the ITR form guide to choose the correct form that matches your income and profession.
7. Incorrect Tax Calculations
Computing deductions or exemptions wrongly leads to errors in tax liability. This attracts interest and penalties if dues are not cleared. To avoid this, use the e-filing portal’s tax calculator tool. Additionally, consult a CA if needed for accurate tax calculations.
8. Missing ITR Filing Deadline
By missing the 31st December deadline for filing ITR, you are liable for late fees of up to ₹10,000. Delayed filing also results in paying extra interest on your tax dues. So mark your calendar well before the deadline and submit your returns ahead of time. This prevents last-minute issues.
9. Not Verifying ITR
Your tax filing process is incomplete without verifying your ITR post submission, causing processing delays. Do this via Aadhaar OTP, net banking or sending the signed ITR-V copy. Keep tracking your return status to ensure successful processing.
10. No Mention of TDS or Advance Tax
If tax is already deducted via TDS or advance tax is paid, not providing these details leads to tax calculation mismatches. Further, it increases overall tax liability. So, furnish accurate TDS and advance tax payment information in your ITR. This reduces the excess tax burden.
Conclusion
Filing an accurate ITR requires diligence and attention to detail regarding PAN. Avoid these common errors by cross-checking PAN details, computations, and forms and diligently reporting all income. Where unsure, seek expert help. Follow the guidelines shared above and file error-free, verified returns before deadlines. This will ensure smooth processing and timely tax refunds from the Income Tax Department.
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