As the income tax filing season approaches, financial experts are warning taxpayers to exercise caution while submitting their returns. Even minor errors in filing can result in hefty penalties, delayed refunds, and notices from the Income Tax Department.
One of the most common mistakes taxpayers make is selecting the wrong Income Tax Return (ITR) form. Each form is meant for specific income categories. For instance, ITR-1 (Sahaj) is suitable for salaried individuals earning up to Rs 50 lakh, while ITR-2 is for those with capital gains, multiple properties, or foreign assets. Business owners must opt for ITR-3, and those under presumptive taxation should file ITR-4 (Sugam). Filing with an incorrect form may be treated as a 'Defective Return' and must be rectified within 15 days to avoid invalidation.
Failure to verify Form 26AS and the Annual Information Statement (AIS) before filing may result in refund delays or excess tax payments. Salaried individuals should ensure they have Form 16, along with documents related to home loans, capital gains, and dividend income.
E-verification is another crucial step. Returns must be verified within 30 days via Aadhaar OTP, net banking, or Demat account. Alternatively, a signed ITR-V must be sent to the CPC office in Bengaluru. Without verification, the filing is considered incomplete.
Late filing attracts a penalty of Rs 5,000 for incomes above Rs 5 lakh and Rs 1,000 for incomes below that. Inaccurate information may lead to a 50% penalty on tax dues and up to 200% for wilful misreporting. Businesses failing to maintain books or submit audit reports on time can face fines up to Rs 1.5 lakh.
Taxpayers are advised to file early, double-check their details, and choose the correct regime to avoid unnecessary legal and financial trouble.
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