Defective or Invalid ITR: Know Mistakes to avoid while filing various ITR Forms

Income Tax Return (ITR) Forms have already been released by the Income Tax Department. This article discusses some common mistakes Taxpayers do while Filing the Return of Income, that may lead to Defective or Invalid ITR or Demand Notice.

Usually, ITR 1 filing is Easy and you can do it online on your own. But the criteria where ITR 1 is applicable on you is very limited. For Example, if you are a Director in a company, then you are not supposed to file ITR 1. If you are doing so, you are filing a Wrong Return or giving the Wrong Disclosure and may face problems at a later stage.

Not Reconciling Form 26AS

This is the worst mistake, any taxpayer can do. Form 26 AS contains, information about an individual’s income, salary, Tax deducted at source (TDS), Tax Collected at Source(TCS),  advance tax paid, self-assessment tax paid etc. Thus it is vital to Cross verify Form 26AS.

Also if Credit for TDS has been claimed in the return of income, but the corresponding receipts/income has been omitted to be offered for taxation, the same can lead to the demand of tax on a later stage.

Not checking the Annual information Statement

Last year Income Tax Department launched the Annual Information Statement (AIS). Click here to Know what Information is there is AIS. Ensure you check and reconcile the information in The AIS before filing ITR.

Not mentioning Auditors’ Details when Tax Audit is Applicable

Not mentioning Auditors Details when Tax Audit is Applicable can lead to your ITR Defective.

Not Paying Advance Tax

UnnecessaryInterest will be applicable u/s 234B & 234C if you don’t pay your Advance Tax.

Not disclosing complete Bank Details

Again if you are not disclosing all the bank details, the same would be tantamount to giving inaccurate disclosure, which can land you in trouble at a later stage.

Difficulty in getting the Income Tax Refund: Incorrect or incomplete bank details can make it difficult for the I-T department to issue a refund in your bank account and you may have to go through the cumbersome process of raising the request for refund reissue. Do not forget to prevalidate your Bank details, in case you have a Tax Refund.

Do you know that not mentioning Exempt Income is Wrong?

Taxpayers tend to leave their Exempt Income while filing ITR, as same is not liable to tax, which is a wrong practice, because again you are not giving true and fair disclosure to the department.

Disclosing House Properties, if you have more than 2 houses

You can claim up to 2 House Properties and self-occupied. No Notional will be applicable on the same. But if you have more than 2 House properties, you are required to pay tax on Notional Rental Income, even if they are not let-out.

Mentioning wrong challan details

Mention of Wrong challan details can also lead to tax demand. In this case, you need to rectify the challan later when the Tax demand notice comes.

How to Avoid Mistakes while filing various ITR Forms

ITR validation rules are given on the Income Tax Website. We have different Validation rules for Different ITR Forms. The Taxpayer or Tax Consultant should have a good study of these ITR Validation rules before Filing the ITR Form.

Here is the link to get the validation rules.