With less than 15 days left for the Income Tax Return (ITR) filing deadline, taxpayers across the country are rushing to complete their submissions. But before hitting submit, experts advise caution. Under the new ITR rules, even a small mistake or a false claim can lead to significant financial consequences.
If a taxpayer hides actual income, a 200% penalty on the tax evaded is charged for misreporting. For underreporting, the penalty is 50% of the tax owed under Section 270A.
Common Filing Errors That Attract Penalties
One of the primary areas of concern is the tendency of taxpayers to claim deductions under Section 80C without adequate proof or documentation. Additionally, issues often arise when individuals make false House Rent Allowance (HRA) claims or record personal expenses as business expenses. Such practices can invite severe penalties, regardless of intent.
Another frequent error is the failure to disclose all sources of income. Earnings from freelancing, crypto trading, or side jobs must be reported in ITR filings. Leaving these out may trigger strict action from tax authorities.
Responsibility Lies With the Taxpayer
To steer clear of penalties, taxpayers should ensure that every deduction or exemption claimed is supported by proper documentation. Mistakes made by a Chartered Accountant (CA) or tax consultant do not shield individuals from liability. The law holds the taxpayer accountable, not the professional who prepared the return.
Therefore, reviewing the tax return thoroughly before submission is crucial. With the deadline fast approaching, a proactive approach can help individuals avoid unnecessary scrutiny and safeguard them from heavy penalties.