Skip to main content

Errors to avoid when Filing Returns 2014

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

 

Errors to avoid when filing returns

With July 31 just around the corner, everyone must be busy with their income tax returns. Filing returns has become convenient since it can now be done electronically. But the flip side to this is that taxpayers often wait till the last day to complete the process. Due to this often there could be mistakes in the returns, which can lead to problems later.

Many of these common mistakes are simple, human errors. Paying attention to these things can make returns filing a smoother and error free process. Here are some of the common mistakes taxpayers make and the consequences of the same.

Choosing an incorrect form

This is the first step to filing tax returns. And taxpayers need to be careful about the form they choose. There are five forms to choose from, depending on the source( s) of income. If you make a mistake in choosing the right form, the entire exercise of filling returns will need to be redone. Here's what each Income Tax Return ( ITR) stands for: ITR 1: For those who earn an income from salary, pension, other sources - interest income on savings bank account and fixed deposit and from one house property ITR 2: For individuals or Hindu Undivided Families ( HUF) that earn an income from all the sources given in ITR 1, more than one house property, capital gains, other sources, and foreign assets ITR 3: For individuals or HUF who fulfils the criteria in ITR 2 and are also a partner in a firm, but do not carry on a proprietary business or profession ITR4: For individuals having income from business or profession ITR4S: For individuals having income from presumptive business

Providing incorrect personal details

Every year a large number of returns are rejected because of incorrect personal details. The ITR form needs both residential and e- mail address. One should ensure that a valid and functional e- mail address (that is regularly used), is provided in the ITR form. If you are staying in arental accommodation or hostel, avoid mentioning that address on the form. Instead, mention your permanent address, where a communication from Income Tax ( I- T) Department can be received/ attended to.

The Permanent Account Number ( PAN) is often written wrongly in ITR. Missing even one number or alphabet of your PAN will lead to your ITR form not being processed. Besides, you could be levied with a fine of ₹ 10,000 for an incorrect PAN entry, as per I- T rules.

Similarly, you should be be careful about Tax Deduction Account Number ( TAN) of your employer. You can find this number in your Form 16.

If you are expecting a refund, you need to mention your bank savings account number and the nine digit MICR number correctly. Or, your refund may get delayed unnecessarily.

This is another common mistake taxpayers make regularly.

Failure to include certain income

There are certain incomes which are left out erroneously as many taxpayers dont know that the same should be mentioned at the time of filing taxes. For instance, income from other sources or interest income and so on.

Income from other sources:

Long- term capital gains and dividends from equity mutual funds and listed securities are not taxable if held for more than one year.

That is, the long- term capital gains tax on equity and related instruments is zero. But such capital gains form a part of your income from other sources and you need to give details about these in the tax returns form. Short- term capital instruments is taxed at flat 15 per cent. At the same time, short- term capital gains from debt funds is taxed at slab and long- term gains from debt funds will be taxed at 10 per cent without indexation or 20 per cent with indexation, whichever is lower. However, this year's Annual Budget has changed this rule and these will be taxed differently for investments made in the current financial year.

Not considering more than one Form 16: If you've changed jobs in the middle of a financial year, ensure that you collect your Form 16 from the previous employer as well. Many make the mistake of reporting only the current employer's income in their returns. Since one has availed tax benefits from both employers, you still owe some additional tax liability at the time of filing tax returns.

Missing TDS details: Since all banks deduct tax at source ( TDS) for the interest income accrued on your fixed deposit accounts, it doesn't mean you don't assess your tax liability and mention it in your returns form.

In reality, banks only deduct 10 per cent tax on interest income, whereas you may be in the higher tax slab of 20 per cent or 30 per cent. So if you don't give information about interest income in the returns form, there is a chance that you may receive a notice from the tax department. The portal will take into account Form 16A details you've added and compute the data.

The same is the case for interest Bangalore office. This Make sure you sign the ITR- V form only in blue ink. If signed in black ink, it But there are some conditions revision is allowed only if the omission was unintentional. There is also a time line. You can revise I- T returns before the expiry of a year from the end of the assessment year or before the completion of assessment of returns, whichever is earlier. So, the returns of assessment year 2010- 11 can be revised till March 31, 2012, or before the completion of the assessment.

That's why it is suggested that assessees take a few moments out a little in advance to take a careful look at what is required in the ITR form, read the instructions and then file returns. This can prevent a lot of these errors.

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 answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

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

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

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

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
      2. Franklin India Smaller Companies

E. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

Popular posts from this blog

Equity investors should track market developments

The stock markets have been volatile over the last few days. They are in a sideways movement and trying to find the bottom after a fall of 20 percent a week ago. The market sentiments are not very positive at the moment and the recent developments are expected to dampen them further. Globally, governments and central banks are trying to cut rates and announce packages to improve business sentiments. These are some of the major developments in the markets last few month: A) Global On the global front, another large US bank went into a financial crisis. The US government took quick measures to avoid the spread negative sentiments in the markets. The US government announced a bail-out package and agreed to shoulder the losses on the bank's risky assets. China announced a large cut in interest rates and reserve ratio to boost the investor sentiments in the markets. Recently, the World Bank announced China's growth rate next year will come down to 7.5 percent. The European ...
Read more

Tax Planning: Income tax and Section 80C

In order to encourage savings, the government gives tax breaks on certain financial products under Section 80C of the Income Tax Act. Investments made under such schemes are referred to as 80C investments. Under this section, you can invest a maximum of Rs l lakh and if you are in the highest tax bracket of 30%, you save a tax of Rs 30,000. The various investment options under this section include:   Provident Fund (PF) & Voluntary Provident Fund (VPF) Provident Fund is deducted directly from your salary by your employer. The deducted amount goes into a retirement account along with your employer's contribution. While employer's contribution is exempt from tax, your contribution (i.e., employee's contribution) is counted towards section 80C investments. You can also contribute additional amount through voluntary contributions (VPF). The current rate of interest is 8.5% per annum and interest earned is tax-free. Public Provident Fund (PPF) An account can be opened wi...
Read more

TDS Rate and Personal Account Number(PAN)

    The TDS rate doubles to 20% from 10% if you fail to mention your Personal Account Number   IF you run a glance through your pay slip, you will come across something called TDS, which is tax deduction at source. In most cases, the employer deducts this amount at the time of payment of salary itself and pays the total tax amount to the government on behalf of all the employees. If you are a self- employed or practicing professional s, you have to pay this amount yourself.    Tax deducted at source is one of the modes of income tax collection by the government. Under the income-tax laws, income tax at specified rates is required to be deducted while making certain payments.    The rate of deduction of tax at source on interest and rent payment is 10%. For salary payments, the employers deduct income tax at source on a monthly basis after computing income tax liability on estimated annual taxable income of the employee. Tax benefits on housing loan, investments, etc are consid...
Read more

Fortis Mutual Fund

Fortis Mutual Fund, a relatively new player, it is still to prove its case and define its position in the industry. In September 2004, it came onto the scene with a bang - three debt schemes, one MIP and one diversified equity scheme. And investors flocked to it. Going by the standards at that time, it had a great start in terms of garnering money. Mopping up over Rs 2,000 crore in five schemes was not bad at all. The fund house has not been too successful in the equity arena, in terms of assets. Though it has seven equity schemes, it is debt and cash funds that corner the major portion of the assets. Most of the schemes are pretty new, and the two that have been around for a while have a 3-star rating each. The last two were Fortis Sustainable Development (April 2007), which received a rather poor response, and Fortis China India (October 2007). Fortis Flexi Debt has been one of the better performing funds, after a dismal performance in 2005. It currently has a 5-star rating. None ...
Read more

Gold: It is safe & secure

RETURNS ON GOLD & ITS ETF’s RISE WHILE most of the popular asset classes are going through bad times, the yellow metal shines on. In fact, in the last one year, gold has given a return of more than 25% and currently trades at Rs 14,695 per 10 gm. Even gold exchange traded funds ( ETFs ) have appreciated substantially. Gold Gold Benchmark Exchange Traded Scheme ( BeES ) and Kotak Gold ETF have given more than 25% returns each in the last three months. Even as the equity markets have taken a hit with the Sensex losing around 46% in the last one year and real estate prices also witness a correction, investors’ preference has shifted to safe havens such as gold. On an average, most of the diversified equity mutual funds have fallen and real estate developers are offering discounts. Thus gold remains the safest bet. The appreciation in the gold prices is mainly due to its safe haven status. The key reason for gold to go up is lack of other investment opportunity. There is also a risk in...
Read more
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