Not only undeclared cash, property or assets that can trouble you with income tax notice, there are many other reasons that can make you face tax authorities. These reasons may be not deducting TDS or not filing ITR even if you have paid the taxes. New rules have made tax compliance very strict, every year tax department comes up with new forms and rules to plug the tax leaks and department is catching upon the defaulters. Online income tax return filing and quoting PAN numbers and bank account details for all the transactions have made tracking easy for the tax authorities. Every year thousands of taxpayers receive notice for discrepancies found.
Let’s see some of the common mistakes that fetch you a tax notice:
- Not filing tax returns: You are required to file ITR if your gross total income (before allowing any deductions under section 80C to 80U) exceeds Rs.2,50,000 in the financial year. Don’t miss filing your return even if your tax is zero or all your taxes are paid.
- Ignoring income of old job: If you are switching your job during the year, inform your new employer about income generated from the previous employer so as to adjust the TDS accordingly.
- Clubbing Provisions: Understanding the income clubbing provisions when you invest in the name of your non-working spouse or children, income from such investments may be clubbed in your income.
- Interest income: People often forget to report the interest income from FDs, RDs, etc. All interest from such deposits should add to your income.
- Vacant House: Having a second house which is vacant can amount to tax as per income tax provision even if you are didn’t let out that property. Income from house property is based upon the value of the house and not upon the actual rent.
Please share what mistakes you find that are common, add up in this list.
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