Income Tax Return for AY 2021-22: ITR filing is mandatory for all individuals whose income is over Rs 2.5 lakh and is aged under 60 years. Senior citizens, whose annual income is under Rs 3 lakh, are exempted from filing ITR. In the case of very senior citizens above 75, ITR filing is not required if their income comes only from pension and interests on deposits.
The Income Tax Return filing due date for FY 2020-21 (AY 2021-22) is September 30. Even as the ITR filing due date is expected to be extended, taxpayers should try to file their returns this month itself. Tax filing is an annual liability and it is always better to get rid of it as early as possible. However, while doing that, taxpayers should avoid certain mistakes. Take a look:
1. Not reporting interest income from Savings Account
Many individuals tend to ingnore interest income from savings accounts. However, as per income tax rules, you are required to show your interest income from savings account deposits.
Under Section 80 TTA of the Income Tax, interest earned up to Rs 10,000 on the savings account is exempt for individuals. For senior citizens, this exemption limit is Rs 50,000 under Section 80TTB.
2. No including interest income from Fixed Deposits
Interest income from fixed deposit accounts is taxable under the Income Tax Act. Hence, you are required to include this income in your ITR.
3. Filing wrong ITR form
There are separate ITR forms for different kinds of sources of income. Hence, you are required to use the ITR form applicable to your sources on income
4. Forgetting e-verification
E-verification of ITR within 120 days of filing returns is mandatory. If you fail to e-verify, the processing of your ITR will be affected. E-verficiation can be done easily through your net-banking account, Aadhaar OTP etc.
5. Not comparing New vs Old Tax Regime to optimize tax-saving
This year you have the option of filing ITR under new and old tax regimes. In the old tax regime, you will get deductions and exemptions, while under the new regime, the tax rate is low sans all deductions and exemptions. You should select the best of the two to optimize your tax-saving.
6. Ignoring Interest earned on money gifted to spouse, child
It is mandatory to include income from the interest earned on the money you may have gifted to your spouse or child. Such interest is earned when the gifted money is used for investment.
7. Not reporting dividend income
Dividend income from equities or mutual funds was earlier considered tax-free. However, from FY 2020-21, dividend earned by individuals from equities and mutuals funds is taxable at the slab rate. Therefore, this year you should declare dividend income in your ITR and pay tax accordingly.
8. Not matching Income and TDS with details on Form 26AS
Form 26AS is the annual tax statement having details of all the income you had during the financial year. Therefore, details provided by you in the ITR should match the income details on Form26As. You may receive an Income Tax Department notice or less Income tax Refund if the income shown in ITR does not match with the income in Form 26AS.