Tax filing season is on. The last date for filing your tax return is July 31st for Financial Year 2013-2014 (Assessment Year 2014-215).
Below are the common mistakes committed by tax assessees with respect to tax filing. Do not commit these mistakes. Else you may receive tax notice from the Income Tax Department.
1 – Not quoting PAN : It is now mandatory to mention your Permanent Account No (PAN) for all the high value transactions. If you do not submit it while making investments or joining the job, your income will be subjected to higher Tax Deduction at Source (TDS) of 20%, instead of 10%. If PAN is incorrect or not mentioned, you could even be slapped with a penalty of upto Rs 10,000 and also TDS will not be credited to your actual account. This may result in additional tax demand. You may not get tax refund too (if any).
The high value transactions are like;
- Purchase of Gold jewellery worth more than Rs 5 Lakh
- Cash deposits of more than Rs 50,000
- Sale or purchase of immovable property valued more than Rs 5 Lakh
- Paying Life insurance premium of more than Rs 50,000
- Mutual Fund investments of Rs 50,000 and above
- Hotel or restaurant bills of Rs 25,000 and above
- Sale or purchase of motor vehicles (other than two wheeler) of Rs 50,000 and above.
2 – Not checking Form 26 AS before tax filing: The Form 26 AS has details of the tax paid by you during a financial year. You can easily access this form online, on Income Tax department’s website. Before you file your Income Tax returns, check if your Form 26 AS has correct TDS entries. For example: Your employer might have deducted TDS amount for last quarter and deposited the amount on your behalf. Check for this transaction in Form 26 AS. Also, check whether all the investments with TDS have been duly mentioned in your Tax return form also. Any mismatch will lead to a notice from the department.
- To check Form 26 AS, visit this link – Click here..
- Enter your login credentials (Create your login ID if you do not have, it hardly takes few minutes)
- Click on “View Form 26 AS.”
- You will be redirected to TDS-CPC website wherein you can check the tax credit (TDS) details.
- In the same screen, you can also check if your communication address that is linked to your PAN is up-to-date. (You may visit my article on how to update address for PAN)
3 – Mismatch in income,expenses and investments: All financial institutions and Registration authorities are supposed to report about high-value transactions to Tax Department. The Department’s CASS (Computer Aided Scrutiny System) will match this information with your Income Tax returns. If there is any mismatch then you may receive a notice.
4 – Not filing returns : If your gross income before deductions (tax savings,home loan, HRA etc.,) is more than Rs 2 Lakh then it is mandatory to file Tax return.
5 – Due Date : If all taxes have been paid then you can file Financial Year 2013-2014 tax returns by 31st March, 2015. If there are tax dues and the return is filed after the deadline then a penalty of Rs 5,000 may be levied.
6 – Change of job : If you had joined a new company during the financial year then do not forget to declare the income from previous employer in the tax return.
7 – Income from other sources: You might have earned interest income on Bank fixed deposits, Bonds, National Saving Certificates (NSCs) etc., This income is taxable. (Interest earned on bank savings account is exempted upto Rs 10,000 but it should be included in filing). You have to declare all these incomes in your tax return.
Income tax slabs for Financial Year 2013-2014.
Kindly note that e-filing is mandatory if your income is above Rs 5 Lakhs. Have you filed your tax return? Do share your comments.