ITR Filing Deadline July 31: Avoid These 5 Common Mistakes to Prevent Tax Notices
Source: Mint Money
Arth Insight · What this means for your wallet
- Avoid a late filing fee of up to ₹5,000 by submitting and e-verifying your return before July 31.
- Prevent delays in receiving your tax refund by pre-validating your bank account and matching it with your PAN.
- Save on potential interest penalties and legal costs by reporting all interest and dividend income accurately.
With the Income Tax Return (ITR) filing deadline of July 31 fast approaching, taxpayers must ensure accuracy to avoid penalties and legal notices. Common errors like mismatched income data and incorrect bank details can lead to delayed refunds or additional tax demands.
- ▸Always cross-check your ITR data with the Annual Information Statement (AIS) to avoid mismatches.
- ▸Ensure your bank account is pre-validated on the tax portal to receive refunds without delay.
- ▸E-verify your return within 30 days of filing; otherwise, the ITR will be considered invalid.
- ▸Report all income, including minor interest from savings accounts and dividends.
- ✓Always cross-check your ITR data with the Annual Information Statement (AIS) to avoid mismatches.
- ✓Ensure your bank account is pre-validated on the tax portal to receive refunds without delay.
- ✓E-verify your return within 30 days of filing; otherwise, the ITR will be considered invalid.
- ✓Report all income, including minor interest from savings accounts and dividends.
The deadline for filing Income Tax Returns (ITR) for the Assessment Year 2024-25 (Financial Year 2023-24) is July 31, 2024. As the date nears, the Income Tax Department has urged taxpayers to file early to avoid the last-minute rush. However, haste often leads to errors that can trigger scrutiny notices under Section 143(1) or result in the rejection of refund claims.
1. Ignoring the Annual Information Statement (AIS) and TIS
One of the most frequent mistakes is relying solely on Form 16. Taxpayers must download and review their Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) from the e-filing portal. These documents capture all financial transactions, including savings account interest, dividend income, and stock market transactions. Any discrepancy between your ITR and the AIS can lead to an immediate tax notice for under-reporting income.
2. Selecting the Wrong ITR Form
Choosing the incorrect form is a technical error that can render your filing 'defective.' For instance, ITR-1 (Sahaj) is meant for individuals with income up to ₹50 lakh from salary, one house property, and other sources. However, if you are a director in a company or hold unlisted equity shares, you cannot use ITR-1 and must opt for ITR-2 or ITR-3. Filing the wrong form may require you to file a revised return, potentially after the deadline.
3. Failure to Disclose All Income Sources
Taxpayers often forget to report 'exempt income' or minor income sources. This includes interest earned on savings bank accounts (deductible up to ₹10,000 under Section 80TTA), interest from fixed deposits, and income from capital gains. Even if your total income is below the taxable limit, if you are filing a return, every rupee earned must be accounted for to match the department's data records.
4. Incorrect Bank Account Details for Refunds
If you are eligible for a tax refund, ensure your bank account is 'validated' on the e-filing portal. Errors in the IFSC code or account number are common reasons for refund failures. Additionally, the name on your bank records must match the name on your PAN card. The Income Tax Department only issues refunds to pre-validated bank accounts linked with PAN.
5. Forgetting to E-Verify the Return
Filing the ITR is only half the job. Your return is not considered valid until it is verified. Taxpayers have a 30-day window to e-verify their returns using Aadhaar OTP, net banking, or digital signature. If you fail to verify within this period, your ITR will be treated as 'not filed,' which could attract late fees of up to ₹5,000 under Section 234F and interest on unpaid taxes.
This report is for informational purposes only and does not constitute professional tax advice. Please consult a qualified chartered accountant for specific queries.
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Frequently Asked Questions
What happens if I miss the July 31 ITR deadline?
If you miss the deadline, you can file a 'Belated Return' until December 31, but you will have to pay a late fee of up to ₹5,000 and interest on any unpaid tax.
Is it mandatory to report savings account interest?
Yes, all interest income must be reported. However, you can claim a deduction of up to ₹10,000 on savings account interest under Section 80TTA.
How do I check if my bank account is validated for a refund?
Log in to the Income Tax e-filing portal, go to 'My Profile,' and select 'My Bank Account' to check the validation status and ensure it is linked to your PAN.
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