ITR Filing - Top 10 challenges faced by taxpayers filing ITR

Filing ITR is not as difficult as it appears. We have listed down the top 10 challenges that people face while filing their ITR and also provided the ways to overcome them.

Aug 14, 2019 10:08 IST India Infoline News Service

The CBDT has already extended the last date for filing tax returns to August 31, 2019. Of course, if you have your documents in place, you need not wait till the last minute as you can do the filing right away. Here are the top 10 tax filing challenges and how to overcome them.

10 common challenges in tax filing and how to overcome?
  • Have you registered yourself with the Income Tax E-filing website? If you have not, then you must do it right away. Unless you register with a secure password, you cannot file your returns online. Register your mobile and Aadhar number also so that in case you forget your password, you can retrieve the same with mobile OTP.
  • Do you know which ITR form to use? There are a number of forms for ITR filing. You must ensure that the income tax return filing is done in the correct form; else the return will be rejected. People with incomes below Rs50 lakhs are allowed to file the SARAL. However, this cannot be used if you have any capital gains during the year or if you are director in a company. Check these aspects before selecting the ITR form.
  • Have you submitted your tax saving investment proofs to your employer on time? If you have not done, you may have to claim the refund from the Income Tax department. Keep all the proofs ready, should the IT department ask for details of investment.
  • Investors are confused about tax-free income disclosure. Remember that even if income is tax free like in the case of dividends on stock holdings, dividends on mutual funds, agricultural income or even interest on bank deposits up to the limit, the income has to be disclosed in returns. Subsequently, the exemption can be claimed.
  • Quite a few tax filers are still confused by the concept of rebate on incomes up to Rs5 lakhs. Remember, you still need to file your tax returns if your annual income is more than Rs2.50 lakhs. Only super senior citizens (above 80 years) are exempted from filing tax returns up to income of Rs5 lakhs. For others, if net taxable income is up to Rs5 lakhs, then the tax calculated is given back as exemption under Section 87A.
  • Matching TDS with Form 26AS is a major challenge for employees and vendors. If your employer or client has not deposited the TDS with the government with your PAN map, there could be a mismatch between TDS and Form 26AS. Normally, Form 26AS is updated by June and you must use that as a reference point and follow up with your employer or client if required.
  • There are also tax filing challenges if you are paying rent for an apartment but you are not getting any HRA. In this case, remember that you can claim a special deduction under Section 80GG for rent paid up to Rs60,000 per year. This is only available if you don’t own a house in the city you are located.
  • One of the tax filing challenges arises when you have shifted jobs during the year. In that case, you need to file your returns with two Form-16 copies issued by both employers. You must submit all details of your previous income to the new employer so that TDS can be managed at their end.
  • Deadlines and penalties are a lot stricter with respect to tax return filing. If you miss your deadline for filing returns, you not only lose capital loss exemptions but also have to pay a mandatory penalty. Excess tax paid is a better situation since you can always claim the refund.
  • Finally, remember that online filing can face technical challenges in the last few days due to pressure on the server. Don’t miss the deadline due to such issues. It makes sense to file the returns at least 10-15 days ahead of schedule, once documents are in place.

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