How to efile Income Tax Return and which are common mistake in Income Tax Return person faces while efiling income tax return.
Each Income Tax Return excel file is automated to calculate income tax liability as per the applicable income tax slabs. (Check Income Tax Slab Rates for 2013-14 and 2014-15) .once you fill all the data in the excel sheet which includes you name, date of birth PAN number, address, email if mobile number, father name etc. click in validate button given in excel sheet it will automatically show the error in income tax return repeat this process on all pages of income tax return and once page is correct it will show OK message and once all pages are OK click on calculate button given this will automatically calculate income tax liability on total income. Once income tax is calculated click on generate button to generate .xml file of income tax return which assessee has to upload on income tax efilling website. Download Income Tax Return Form: ITR1, ITR2, ITR3, ITR4, ITR4S, ITR5 for AY 2013-14.i.e.FY 2012-13 for efiling of Income Tax Return
Common Mistake in Income Tax Return (ITR Efiling)
Reasons for mistakes in calculation of Income.
- The accurate and complete filling up of the relevant column or detail in the Income Tax Return (ITR) form is necessary for correct calculation of income by the Income Tax Department. In case of any inconsistency between the values as entered in the Schedules and the cross-referenced in values otherView Form 26AS TDS Deduction Status Online
- Schedules or Totals / Summary in PART B-TI, for Incomes, the higher value may be taken and for Expenses, Losses or Deductions, the lower value may be taken for final computation of Income. In case the computation of Income or refund is different than what had been entered or what is expected, please verify the data that you entered in ITR. Except for limited number of complicated tax returns, for most taxpayers, the simple check points are the following:
Income from Salary: From all employers, irrespective of whether Form 16 has been issued or not, should be entered in Item 1 of ITR 1 or details in Schedule Salary in ITR 2, the final amount of Salary should be entered in Item 1 of Schedule Part B TI- Computation of total income in ITR 2, the same amount should be entered in Schedule CYLA- Current Year Loss Adjustment in the row ‘Salaries’, below column (i) in ITR 2.
- Interest income from fixed deposit s, savings bank account etc should be entered in Item 2b of ITR 1 or Item 1b of Schedule OS-Income from Other Sources in ITR 2. The total in Item 2c of ITR 1 and intermediate totals in Items 1e, 1g, and 3 of Schedule OS-Income from Other Sources in ITR 2 should be correctly filled.
- The final amount of Income from Other Sources should also be entered in Item 4a and the total in Item 4c of Schedule Part B TI in ITR 2.
- The same amount should be filled in Schedule CYLA- Current Year Loss Adjustment in the row ‘Other sources (incl. profit from owning race horses)’, below column (v) in ITR 2
Income from House Property Income
- House Property income should be entered in item 1a Municipal taxes paid should be entered in Item 1c and the intermediate total should be entered in Item 1e of Schedule HP-Income from House Property in ITR 2.
- A flat deduction of 30% of the amount in Item 1e is the only deduction permissible for repairs and such expenses and this should be entered in Item 1f.
- Deduction for Interest on housing loan should be entered in Item 1g and is restricted to Rs 1,50,000 for ‘Self Therefore, correctly Tick if the house property is ‘Let Out’ for rent.
- The final value of income from house property entered in 1i. In case of multiple house properties, details of each house property have to be entered.
- In case, the value in Item 3c of Schedule HP is Negative then the value without negative sign should be entered in Schedule CYLA in the row ‘Losses to be adjusted’. Accordingly, the final value of Income from House Property should be entered in Item 1i.
Income from Short Term Capital Gains
- Income from Short Term Capital Gains should be entered in Item A of Schedule CG-Capital Gains in ITR 2.The balance value of STCG should be entered in Item 2c, 2f of ITR 2.
- Out of this value, the amount of STCG attributable to STCG from sale of shares, typically, should be entered in Item A5 namely, ‘Short term capital gain under section 111A included in 4’.
- The balance value of STCG should be entered in Item 2c, 2f of ITR 2. For Short Term Capital Gain the total sale value, typically, should be entered in ‘From assets in the case of others’ in Item 2a of ITR2.
- Against this sale value, cost of acquisition / improvement and allowable expenditure etc should be entered in Item 2b of ITR 2. No benefit of indexation is permissible for short term assets.
- The STCG under 111A as entered in Item A5 is taxed at a lower flat rate of 10% and such amount has to be mentioned in Schedule SI – Income chargeable to Income tax at special rates.
- The residual value, where the STCG is due to sale of assets OTHER THAN SHARES, if any, should be entered in Item A6, referred to in section 111A (A4 – A5)’and The STCG due to sale of assets OTHER THAN SHARES is taxed at the normal slab based rates of tax.
- Most mistakes in STCG are due to incomplete filling of the Schedule CG, corresponding value of STCG under section 111A in Schedule SI- Income chargeable to Income tax at special rates.
Income from Long Term Capital Gains
- Long Term Capital Gain Income should be entered in Item B of Schedule CG-Capital Gains in ITR 2.
- The balance value of LTCG should be entered in Item 2c, and after exemption in 2d, if any, in Item 2e of ITR 2.
- For Long Term Capital Gain, the total sale value of assets such as house property, typically, should be entered in ‘Asset in the case of others where proviso under Section 112(1) not applicable’ in Item 2a of ITR 2 in case the benefit of Indexation is claimed.
- Against this sale value, the indexed cost of acquisition / improvement and allowable expenditure etc should be entered in Item 2b of ITR 2. Against this sale value, the cost of acquisition / improvement and Allowable expenditure etc should be entered in Item 3b of ITR 2.
- The balance value of LTCG should be entered in Item 3c, and after exemption, if any, in Item 3e of ITR 2.
- Most mistakes in LTCG are due to incomplete filling of the Schedule- CG and incorrect or incomplete filling up of the correct code and corresponding values of LTCG in Schedule SI- Income chargeable to Income tax at special rates.
- LTCG in case of ‘Asset in the case of others where proviso under section 112(1) not exercised’ as entered in Item 2e of ITR 2 is taxed at a lower flat rate of 20% and the benefit of indexation is allowed the same amount has to be mentioned correctly under the code ‘21’ in Schedule SI- Income chargeable to Income tax at special rates.
- The balance value of LTCG should be entered in Item 3c, and after exemption, if any, in Item 3e of ITR 2.
- The balance value of LTCG should be entered in Item 3c, and after exemption, if any, in Item 3e of ITR 2. Total value of LTCG should be correctly entered in Item 5 of B of Schedule CG for ITR 2.
Adjustment of current year and brought forward losses- Schedules
These schedules are used for permissible adjustment of current year loss of one type of income against another type of income the main checkpoints are:
- No value should be entered in the ‘Grayed out’ boxes.
- Loss adjustment is permissible only to the extent of income available.
- Total of all earlier year loss adjustments should be entered in Item 8 of Part B TI.
- Details of earlier year losses as at the beginning of the year before any adjustment should be entered in Schedule CFL.
- Winnings from lottery should be excluded while entering value in row for ‘Other sources (incl. profit from owning race horses)’ under Column 1 in Schedule CYLA.
- Balance income of LTCG after adjustment of current year losses can be utilized to adjust brought forward losses of the same type only.
- The adjustment of such losses against income should be entered in Schedule BFLA.
- Only positive values need to be entered. No negative value is required to be entered in CYLA, BFLA & CFL.
- Carry forward of Current year losses though computed and shown in intimation will not be allowed if the return is not filed with due date applicable.
- Loss from House Property, and other sources should be entered in the row ‘Loss to be adjusted’ under Column 2, 3 of Schedule CYLA.
- Total of all current year loss adjustments should be entered in Item 6 of Part B TI.
Deductions from Income under Chapter VIA
- The deduction amount claimed should be entered in Items 4a to 4l in ITR 1 and in Items a to m in Schedule VIA in ITR 2.
- The sum of all deductions also cannot exceed the total income deduction cannot be claimed against income chargeable to special rate tax. Total of all deductions claimed should be entered in Item 4m in ITR 1 and Item n in Schedule VIA in ITR 2.
- The deduction under 80G that can be claimed is 50% of such eligible deduction.
Income chargeable to Income tax at special rates– Schedule SI
The following points may be considered-
- The Schedule SI must be filled based on final amounts of income chargeable under special rates as derived from Schedules OS, CG and BP and after adjustment of all current year losses and all brought forward losses. Therefore, before entering this Schedule, losses should be correctly entered and adjust schedule CYLA, BFLA and CFL balance income.
- The amount of Income chargeable to special rate tax should be adjusted for basic exemption threshold, if applicable and the total value of Special Rate tax in Schedule SI should be entered in Item 1b of PART B –TTI: Computation of Tax Liability.
- The correct code to be entered in this Schedule for i. STCG under 111A is ‘1A’ and the tax rate is 10%. ii. LTCG in case of ‘Asset in the case of others where proviso under section 112(1) not exercised’ where benefit of indexation is allowed is ‘21’ and the tax rate is 20%. iii. LTCG in case of ‘Asset in the case of others where proviso under section 112(1) is exercised’ where the benefit of indexation is not allowed is ‘22’ and the tax rate is 10%. iv. Winnings from Lottery are ‘5BB’ and the tax rate is 30%.
Reasons for difference in calculation of Tax or Interest under 234A, B or C and Interest on Refund
There may be a difference in calculation of tax or interest due to the following reasons:
- Incorrectly computing special rates of tax.
- Mistake in entering important fields relevant for computation of tax such as date of birth (relevant for senior citizens) or gender (relevant for female taxpayers), resident or non-resident, status (relevant in case of HUF).
- Mistakes in computation of Income as mentioned above leading to an increase in Income.
- Mistake in correctly entering data or code of Income chargeable to tax at special rates such as STCG on sale of shares, LTCG where indexation benefit is claimed, winnings from lottery.
- Interest under 234C is also charged in case advance tax on account of STCG under 111A, LTCG or Winnings from lotteries is not paid, beginning from the next quarter from the quarter in which the income is earned.
- Interest under 244A is calculated on refund of tax is reduced by the period of delay in filing of return. Interest till the date of processing under 234A is charged if the return is filed beyond due date, interest under 234B is charged for shortfall in payment of advance tax and interest under 234C is charged for deferment of advance tax.
Reasons for mistakes in Credit for tax payments or TDS
A major mistake in refund amount during processing is that the details of tax payment or TDS do not match the data available with the department. The checkpoints are as under-
- Corresponding deduction of tax (TDS) on salary by all Employers should be correctly entered in Item 21- Tax Deducted at Source from Salary in ITR 1 or in Schedule TDS 1 for ITR 2.
- All employers total of TDS should be entered in item 15B of ITR 1 or in Item 9b of Schedule Part B TTI- Computation of tax liability on total income of ITR 2.
- The TAN number is mentioned on the Form 16 given by the Employer or on the Form 16A given by the Bank. In case the TAN of the Employer not correct TDS credit will not be given.
- If the TAN has been correctly entered but the Employer or Bank does not report the same TDS details to the Department, especially the taxpayer Permanent Account Number (PAN), then also the TDS cannot be matched. The taxpayer should confirm that TDS details have been reported to the Department.
- The Challan Identification Number (CIN) is the combination of BSR code date of deposit of challan In case this is not clearly legible; the Bank can be requested to provide correct details. This must be entered correctly in the return while claiming credit.
- Mis-delivery or non-delivery of communication or in case of Bank Account error causes rejection of refund credit to taxpayer account. The following points may be noted:
- The name in the return should be entered as it appears in the PAN card,
- For faster credit of Income Tax refunds, correct bank account number and MICR code in the return should be mentioned.
- Address should be correctly filled.
- In case of Refunds below Rs 100, no refund is issued and if Demand is below Rs 100, it need not be paid.
How to rectify the mistake and to get the correct refund
Some basic information is provided below:
- The procedure for rectification and correction of mistakes will be available shortly.
- In case of any difference in date of birth or gender in Department records or in case of any need to correct the address, the data may be corrected by submitting a revised PAN application form (quoting the existing PAN number) with correct details and providing relevant proof at any TIN facilitation center.
- In case of any mistake in MICR or Bank Account number a cancelled cheques showing correct particulars would be required to be submitted to CPC for correction in bank account number or MICR code.
- In case the charging of additional tax and interest is only because of non- matching of tax payment or TDS, upon correction of the details by taxpayer or employer / bank, the additional tax and interest will be automatically reduced or eliminated.