penalty up to 300% of tax evaded anytime in next 8 years. The other common mistake is not declaring FD interest where TDS has already been deducted by bank. In this case if the total income is above R5 lakh, the tax slab would be 20%. Hence, additional 10% tax needs to be deposited on FD interest income. Similarly, any commission, rental income on property, amount received from a non relative above R50,000 during the fiscal, gain/loss on sale of capital assets i.e. property, shares, gold, paintings, etc, is to be disclosed in the ITR.
Match returns data with Form 26AS
Form 26AS reflects all your income and tax credits. Always match your return data with Form 26AS before filing the return. Numerous tax demand notices are being sent to taxpayers, because the TDS being claimed in the income tax return is not reflected in form 26 AS. This could be due to submitting wrong PAN to employer/deductor or a case of typo error by employer or delay in depositing the TDS amount by the employer.
Invest in tax saving options after knowing tax laws
Don’t invest in tax saving options without knowing current tax laws. Every year there are changes in tax laws and terms and conditions for eligibility. PAN of the landlord is now mandatory for rent payment of more than R1 lakh per annum. Not giving your PAN to the employer leads to higher TDS of 20% of salary, even if you fall in lower tax bracket. Reverse mortgage has been introduced for the benefit of senior citizens. However, it is not being used as an instrument of tax free retirement planning.
The writer is CFO, TaxSpanner.com