Managing taxes can be tedious thighs for many. It is a complex process where you have to manage your income and file a tax return at the end of the financial year. A duly filed income tax is also known as ITR (Income Tax Return).
ITR helps the authorities evaluate the exact amount of taxes you have already paid to the authorities and the amount of taxes owed to you as a balance.
Simply put, an Income tax return is a process where an individual can assess their income and communicate it to the authorities. This communication happened through a process called tax filing.
Mistakes To Avoid While Tax Planning-
Tax filing can be a complicated process, and if this is the first time you are filing a tax return, you can make several mistakes. Below are some mistakes that you need to avoid while planning an income tax return.
1. Missing On Due Dates:
Missing out on due dates clearly shows that you are filing a tax return for the first time. Well, you might think missing out on dates will be compensated with a due date. Yes, you are writing, but a due date comes with a penalty.
You might need to pay a hefty fine for missing out on the ITR due date. Depending on the state you live in, the penalty fees will vary.
2. Using The Wrong Form:
One of the most common mistakes most people make while filing an income tax return is using an incorrect form. Filing ITR using an incorrect form will deem defective, and the tax filing will not be considered.
Also, you will be held responsible for this kind of mishaps and will be asked to take responsibility for it. Despite the tax filing process having been simplified over the last decade, it is still complicated for many. Try taking help from legal professionals.
3. Failing To Mention All Sources Of Income:
Income tax filing is all about being transparent with all your income sources. If failing to do so, the government has the right to take discrepancies action against you. You might also receive a tax notice from the tax department, highlighting that you have evaded taxes.
Hence, it is necessary that you clearly disclose all your income sources and write them down in the form. Remember, any non-disclosure income is a serious offense.
4. Not Filing ITR At All:
You might pull a stunt of not filing ITR at all. Or wait till the last minutes. If you plan to do that, you might get a call or a notice from the tax department. You might have to pay a penalty fee as well.
ITR is something that is quite common to every earning individual. It is just that some don’t have to pay due to their low earnings. If you are earning more than the basic exemption limit, you are liable to pay taxes.
If you are new to ITR things, it is best that you hire a professional for your job. Given below infographics hold all the relevant details that you will need for your first-time tax filing:
Provided by Gordon Law
Read Also:Tags: discrepancies action , first-time tax filing , Income Tax , Income Tax Return , legal professionals