Top 5 common mistakes to avoid while filing your income tax returns

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Top 5 common mistakes to avoid while filing your income tax returns on Business Standard. Here is a list of things to help you sail through

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pg. 1 Top 5 common mistakes to avoid while filing your income tax returns Here is a list of things to help you sail through economy news | With the due date of July 31 fast approaching it is that time of the year again when the taxpayers need to file their I-T returns. After all filing of tax return is compulsory for everyone whose gross total income exceeds the basic exemption limit. The basic exemption limit for individuals is Rs 2.5 lakhs and for senior citizens it is Rs 3 lakhs. So if your income exceeds this limit you need to file the tax return by the due date. Filing of tax return requires caution to avoid mistakes. Keeping in mind few things can make your tax filing a breeze. Here is a list of things to help you sail through: 1. Choose the right ITR Form applicable There are total 7 ITR forms available for e-filing.This year a lot of changes has been made in these forms. Make sure that you choose the right ITR form applicable to you. For example there are two I-T return forms - ITR-1 and ITR-2 available for salaried individuals at the moment and your

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pg. 2 sources of income will decide which form to use. ITR 3 is applicable for the person having income from business whereas last year ITR 4 was applicable for business income. So pick the correct ITR form. The Tax Department will refuse to accept your form in case you have chosen the wrong one. 2. Claim all the Deductions Ensure that you have claimed all the deductions allowed under various sections of I-T Act that you are eligible for. For example under Sec 80C- PPF PF school tuition fees of children etc under Sec 80D- Health insurance premium and so on.In case of Salaried individuals they can claim such deductions even if it is missed in Form 16 provided that such investments are done before 31st March 2017.| economy policy 3. List all sources of income including Interest Income Firstly you need to identify your sources of income under different heads. Under the I-T Act all incomes earned by persons are classified into five different heads such as income from salary income from house property income from business or profession income from capital gains and income from other sources. Thus you should identify all your incomes from different sources just to ensure that you havent missed out something while filing your return. Many taxpayers do not report interest income in returns thinking that since the tax has already been deducted by the bank. But even though TDS has been deducted on any of your income it has to be disclosed in your return. 4. Reporting all bank accounts The income tax department has made it mandatory for taxpayers to report all their bank accounts held at any time during the previous year in their tax return. You must provide the name of the bank IFSC code and bank account number and mention whether its savings or current account. Remember to mention all your bank accounts. You can omit dormant bank accounts which have been in- operational for the past 3 financial years. Also it is mandatory to disclose the cash deposits made during the period of Demonetisation. A new column has been introduced in all ITR Forms to report on cash deposited by taxpayers in their bank accounts during the demonetization period i.e. from November 9 2016 to December 30 2016. However taxpayers are required to fill up this column only if they have deposited Rs 2 lakh or more during the demonetization period. 5. Report Exempt Income Earlier there was a single column to report your exempt income.This year new columns have been inserted in the ITR forms to specifically report dividend income and long-term capital gains exempt under Section 1034 and Section 1038 respectively. It is Mandatory to e file tax returns for those with long term capital of Rs 2.5 lakhs or more even though their taxable income may be below 2.5lakhs.