Skip to main content

10 Tax Filing Tips To Avoid Tax Problems

Yes, its that time of the year again when we need to prepare our tax returns. The July 31 deadline is closer than we think. And, to get us in good shape for filing tax returns here is a handy guide with 10 tips to keep in mind.

1.    Fill out your correct Permanent Account Number (PAN) number

We come across 100s of tax filers who fill their wrong PAN details and then get into complications as a result of this carelessness. It might sound obvious, but make sure you put the right PAN details on your form and on any challans used to pay taxes. An incorrect PAN number might also result in a problem in getting your tax refund. And finally, you might have to pay a penalty of Rs10,000 for not quoting or mis-quoting your PAN.

2.    July 31 deadline — avoid coming close to it

Don't wait till the July 31 deadline, file your return today. You will gain nothing by procrastinating. In fact, if you attempt to squeeze in your return in the last minute you will cause yourself a lot of stress, and are exposing yourself to careless errors that can be avoided if you were to start the process early and leave enough time to review your return to your satisfaction.

If you have any overdue taxes you can avoid paying penal interest on this overdue liability. By starting early, you are also giving yourself the chance to pay off these dues a lot sooner.

Also, keep in mind that closer to the deadline, the tax department servers get overloaded. If you are choosing to e-file your return, you might get delayed if you can't get connected to the tax department's server.

3.    You don't need a CA to prepare your returns, consider online filing

If you want, you can fill out your own tax return online, or use the services of many of the online tax filing companies. You don't always need to rely on going to a chartered accountant.

4.    File a return even if your employer has deducted tax at source

Many of us suffer from the wrong perception that if tax has already been deducted at source then no tax return has to be filed. You must file taxes if your combined annual income from all sources is above the exemption limit depending upon your age and gender.

5.    Organize TDS certificates from all deductors

TDS certificates are proof that you have already paid certain tax dues. Your employer has to give you your Form 16 that states the amount of tax that has been paid by you. Additionally, you will need to obtain a TDS certificate in Form 16A if you have rental income, interest income, professional/consulting receipts, contractual or commission receipts.

6.    Fully disclose all sources of income

Why invite trouble by not disclosing all sources of income you might have? With increasing digitization of financial services and the use of your PAN number for almost all substantial financial transactions, its easy to investigate what are the different sources of income you might have. Yet, many tax filers willingly don't disclose even interest income earned from one's savings balance, fixed deposits or small savings schemes. Don't expose yourself by omitting any obvious disclosure.

7.    Pay off any self-assessment tax if required, before you file your return

In case you have a tax liability then this needs to be paid off. In technical terms, the tax so paid is called self-assessment tax. Nowadays this self-assessment tax can even be paid online.

8.    Annual Information Return (AIR) details must be filled

ITR forms require you to declare certain types of large transactions such as:

•    Single purchase or sale of an immovable property valued at Rs.30 Lacs
•    Single payment of Rs.5 Lacs or more for acquiring bonds or debentures of a company Credit card payments aggregating to Rs.2 Lacs or more on a single card
•    Mutual fund purchase aggregating to Rs. 2Lacs or more in a single fund
•    Cash deposits aggregating Rs.10 Lacs or more in one bank account
•    Single investment of Rs.1 Lacs or more in shares of a company
•    Payment aggregating to Rs.5 Lacs or more for investment in RBI bonds

Even if you don't make these disclosures, its likely that your counterparty might have already done so, and then the mismatch of disclosure might lead to an investigation into your finances.

9.    State your correct bank details to ensure timely refunds

You can file for a tax refund if you don't have a taxable income and you have faced undue tax deduction. In case you are filing a return for a tax refund, then you need to ensure that you have mentioned your bank details correctly, because the refund amount will be credited directly to your account. The following details must be correctly stated on your return:  Account type - Savings or Current, account number and MICR code of your bank branch (this is the 9 digit number at the bottom of your cheques).

10.    State complete details related to your tax deductions

Your tax credit depends upon the authenticity and completeness of the data you transcribe on your ITR from the TDS certificates, Advance Tax Challans and Self Assessment Tax Challan. Ensure that there are no errors when stating the TAN of the employer or deductor, the amount and date of the deduction. Also, in case of self assessment or advance tax challans, ensure that the name, branch address and the BSR code of the bank where the tax is deposited, challan serial number, amount and date of the deposit are clearly stated.

 

-----------------------------------------------------------------

 

Also, know how to buy mutual funds online:

 

1) DSP BlackRock Mutual Funds:

http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html

 

2) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html

 

3) Sundaram Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-sundaram-mutual-funds-online.html

 

4) Birla Sunlife Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-birla-sunlife-mutual-funds.html

 

5) UTI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-uti-mutual-funds-online.html

  

6) SBI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-sbi-mutual-funds-online.html

 

7) Edelweiss Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-edelweiss-mutual-funds-online.html

 

8) IDFC Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-idfc-mutual-funds-online.html

 

 

Popular posts from this blog

What are the factors affect the changes in Interest Rate of Fixed Deposits?

  What are the factors affect the changes in rate of Fixed Deposits? Fixed Deposits are now considered to be a very old fashioned method of saving, but still attract many investors since they have guaranteed returns at the end of the tenure of the investment at a decent interest rate. There are various factors that affect the rates of interest for a Fixed Deposit. Policies of the Reserve Bank of India   - The several norms and restrictions posed by the Reserve Bank of India , in order to gain optimum control over credit and inflow and outflow of fund throughout the country. The repo rate changes, cash reserve ration tends to change and these changes affect the banking products like Fixed Deposits, loans etc. Recession   - When unemployment in a country crosses the benchmark set Recession hits, and slowly the country faces an economic slow movement, affecting the purchasing power of the people in the country, forcing the Reserve Bank of India to release more funds in the financial marke...

ICICI Prudential Dynamic Plan Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential Dynamic Plan             Invest Online This fund does remarkably well during falling markets, but fails to show the same prowess during a rising market. The fund sticks to its mandate to adapt to the dynamic nature of the market by shuttling between debt and equity. It takes aggressive asset calls in equity when the market surges by investing in quality mid-cap stocks. At the same time, it adopts a defensive strategy by investing in debt and cash when markets get overvalued, making it a good long-term choice.     For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call     Leave a missed Call on 94 8300 8300   Leave your comment with mail ID and we will ...

Understanding Your Cibil Credit Information Report

   WE ARE all familiar with the anxiety and uncertainty that we feel when applying for a loan. After all, it's the lender who decides whether we can own our dream home, our first car, or whether our children can pursue higher education. In a nutshell, a better life depends on the lender's decisions.    While other factors do play a part in the lender's decision, the Cibil Credit Information Report ( CIR ) plays a crucial role in a lender's decision to approve a loan application.    Previously, lenders would treat all loan seekers equally. Each applicant, if approved by the lender's internal credit policy, would be charged at the same interest rate for a particular loan size and purpose. The lenders would charge a higher interest rate to all the borrowers, in order to compensate for the possible default of a small portion of the loan disbursed. In other words, it's like a professor (the lender) punishing an entire class (borrowers) for the mischief played b...

Capital Protection Oriented Funds

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Capital Protection Oriented Funds   Erosion of capital is one of the key concerns for investors wanting to invest in equity mutual funds. To address this concern, asset management companies have launched Capital Protection Oriented Funds (CPOFs). What are CPOFs? CPOFs are generally three to five-year, closed-ended funds where 70-80% of the portfolio is invested in fixed income securities, which mature on or before the scheme's tenure. The investment in fixed income securities grows to 100% at the end of the tenure, providing the investor with capital protection. The remaining portion (20-30%) is used to take exposure to equity, which provides the upside. Exposure to equities is either by directly buying equity stocks (plain vanilla CPOFs) or by b...

Mutual Fund Review: ING Dividend Yield

  ING Dividend Yield's small assets enable the fund manager to churn in impressive returns… Strategy The aim of the fund is to invest in stocks which offer a high dividend yield. This fund deploys a value based strategy which aims to gain from investing in fundamentally strong and free cash flow generating businesses. The scheme focuses not only on growth but also on the cash generated by the business, which mostly leads to stable returns even in volatile markets. This fund has a low volatility because of its investment in high yielding stocks. The scheme tries to include stocks that yield dividend above the dividend yield of the Nifty and stocks with liquidity, which throws up a universe of 150 stocks.   Our View Launched in October 2005, this fund invests at least 65 per cent of its assets in high dividend yield stocks. The fund has consistently maintained a mix of stocks across varying market capitalisation, with a higher tilt to mid caps compared to small caps. Howev...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now