Sunday, April 11, 2021

Don’t make these mistakes while filing income tax return

The final date for submitting revenue tax returns for FY19-20 is approaching quick. The I-T division had prolonged the due date by 10 days to 10 January 2021 from 31 December 2020. If you’re but to file your revenue tax return, listed here are a number of the frequent errors to be careful for.

1. When you have made any transaction associated to shares or mutual funds gross sales throughout the 12 months, it’s essential to fill out these particulars underneath capital beneficial properties or loss made. In case you might have booked beneficial properties or loss in your mutual fund or shares and invested the proceeds in one other scheme or firm, even then, it is going to be thought of a sale or redemption and capital beneficial properties or loss can be calculated relying on the acquisition and sale value. Subsequently, you will need to point out the identical in your revenue tax return because the I-T division could take into account it as concealing revenue and serve you a discover or cost penalty.

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“Non-reporting could invite a discover from tax division and penalty, which is levied, on the price of fifty% of the tax payable on under-reported revenue or 200% the place under-reported revenue is in consequence of misreporting,” mentioned Tarun Kumar, Delhi-based chartered accountant.

This 12 months the taxpayer is required to fill out scripwise particulars for reporting long run capital beneficial properties. Now long-term capital beneficial properties (LTCG) from fairness shares and mutual funds above 1 lakh are taxable. A grandfathering mechanism has been launched for listed shares and specified models bought earlier than 31 January 2018 on which such tax isn’t levied. To seize these particulars, a separate Schedule 112A has been launched within the ITR varieties. You’re required to reveal particulars of sale of fairness shares in an organization or unit of equity-oriented fund on which Securities Transaction Tax (STT) is paid underneath Part 112A.

2. One other frequent mistake isn’t taking in account the curiosity revenue earned on the saving account. The curiosity revenue from a financial savings account of as much as 10,000 in a monetary 12 months isn’t taxable. The curiosity revenue must be proven within the revenue tax varieties underneath the top “Earnings from different sources” and a deduction must be claimed from the identical underneath part 80TTA.

3. Not claiming TDS or TCS again is one other mistake taxpayers make. This will result in larger tax legal responsibility. It is necessary that the taxpayers see their Kind 26AS earlier than submitting their revenue tax returns in order that they don’t miss out on any revenue on which tax has been deducted. Plus, you will need to calculate the tax legal responsibility after contemplating the TDS and TCS paid. “TCS is collected from patrons who pay any quantity as consideration for buy of motor autos of worth exceeding Rs. 10 lakhs. Credit score of TCS might be claimed in ITR,” mentioned Kumar.

4. You will need to pre-validate your checking account whereas submitting your revenue tax return particularly in instances the place you might have tax refund to say. The tax division won’t credit score refund in case your checking account isn’t verified. Now, the tax division credit the refund on to the checking account of the taxpayer. So, you will need to confirm your checking account. It may be achieved on-line via the tax division’s web site.

5. Don’t overlook to e-verify your revenue tax return because the tax submitting course of isn’t full until you e-verify the tax return.

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