10 COMMON CHALLENGES FACED DURING ITR FILING

10 COMMON CHALLENGES FACED DURING ITR FILING

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Today’s Blog features the challenges faced by an assessee while filing an ITR:

1.     Which ITR forms to file?

In general, Seven (7) ITR filing forms are issued by the Income tax department and its applicability depends on your revenue sources. The number of forms will vary depending on the sources of your Income. In most cases a salaried individual the basic ITR form is ITR-1. There are however certain requirements that a person must fulfill in order to be eligible for ITR-1 filing. This is why understanding the income tax slabs and knowing which ITR form you need to fill becomes the need of the hour. This is the situation where you need to consult a chartered accountant/ITR Filing consultant who will guide yours throughout.

2.     Accuracy of the data

Although the e-filing process has been simplified over the years to a great extent, the official website of the income tax department still requires you to enter the income details manually. Also, the ITR forms carry a number of rows and columns to be filled by the taxpayer.

There is a standard format in which the taxpayers are required to fill in the information. There are high chances of taxpayers entering inaccurate information and thus making mistakes. After selecting the “ITR filing”, fill the form with the required details correctly by giving it a recheck. Most people ignore the accuracy of the basic details.

3.     Accuracy of computing Income tax

There are many income tax slabs & Income tax exemptions under the heads of employment, and taxes from which deductions and exemptions are permitted. For example, you can receive revenue from several sources, such as fixed-deposit interest, household rental income, savings account interest, short-term/long-term income, etc. So, keeping a track of income from different sources to compute taxable income can become complicated.

4.     Tax deducted at source (TDS)

During ITR filing, the TDS should ideally have to be the same in Form 26AS and Form 16 or 16A. There are several reasons because of which there is a mismatch in the automatically generated details of Form16 & Form 26AS. For instance, if the employer has not deposited the amount with the tax department on time, it is likely that the TDS details mentioned in Form 16 will not match with Form 26AS and so on.

You must also know that the TDS is not the only deductible from your salary but also from other incomes such as interest income from fixed deposits. Therefore, if the details entered by you in the ITR filing form do not match with Form 26AS, the Income tax return filed can be termed incorrect.

5.     Login credentials

Many taxpayers are entirely dependent on qualified chartered accountants who are responsible for ITR filing. The CAs also run their ITR accounts much of the time. If your CA connection is broken or the records of the CA are erased/lost then how can you access your account? It’s a must know your User ID (which is your PAN number) and password.

Besides this, many of us appear to forget the password of our e-filing account, as the account is only accessed once a year. In such a long time, taxpayers usually forget the password for their account. In a scenario like this, recovering the account can become a difficult process.


6.     Investment declaration

Investment the declaration is something that will provide you a safety net and save onto your income tax for the corresponding financial year. Various investment options mentioned under section 80C of the Income tax act, 1961 helps you as a rational income taxpayer to save your income tax by parking your extra funds in some the productive side where it will grow and your income tax liability will also come down.

7.     Claiming deduction/exemption

You can save tax by claiming deductions up to Rs 1.5 lakh in a financial year under section 80C of the Income-tax Act, 1961. Several other financial products that allow section 80C benefit or by way of specified expenses like paying your child’s tuition fee, etc.

Any contributions made by an individual towards NPS is allowed as a deduction under section 80CCD (1) up to Rs 1.5 lakh. However, if you make an additional Rs 50,000 donation to NPS (over and above the Rs 1.5 lakh limit) it can be claimed as a deduction under section 80CCD (1B). And the total deduction you can assert for NPS contributions is Rs 2 lakh under two different parts of the income tax law.

Similarly, you can claim the amount charged to the insurer as a deduction under section 80D for a health insurance policy. There are several other eligible deductions available under Section 80 which you might not be aware of and can become a challenging task for you when it comes to doing proper tax-saving calculations at the time of ITR filing.

8.     Missing on the due date

ITR filing due date is much important because of the penalty associated with it are much more complex. So it is must that you must have a reliable & experienced chartered accountant on your side who will help you in all ITR filing due dates & lets you focus your focus on your business growth.

9.      The Multiplicity of Form 16S

Often it can become difficult to file your ITR if you have switched jobs during the financial year and invested money regularly during the year in different tax-saving products. ITR Filing Returns with multiple Form 16s can be a bit challenging.

It’s common for people to switch jobs during the financial year going after better pay or better work. When you change your job in the middle of a financial year, it is very likely to happen that you end up with multiple form 16s. During such situations, the tax calculations need to be performed while considering different form 16 documents.

Income tax Filing with multiple Form 16s can be problematic due to which the taxpayers are often confused and are not sure about what to do.

10.             Finding a Reliable ITR filing Expert

For every ITR filing expert, it is important to understand under which income tax slabs an individual falls under and rest the ITR filing expert will figure out how to manage & fix onto income tax of an individual. Saving on the income tax is an art as well as science which an ITR filing expert is good at.

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