As FY2022–2023 came to an end a few days ago, it is that time of year when you may be looking for ways to invest money to take advantage of all possible tax deductions. However, tax planning should ideally be a year-long process geared towards helping you accomplish your financial goals rather than a last-minute effort. When making such selections in a hurry, you risk making blunders. So here we are with this week’s edition of the It’s Time series, where youngsters can learn how to avoid tax mistakes.
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For this week’s tips and tricks on how one can save big, or at least wisely, while avoiding tax mistakes, we talked to Delhi-based tax consultant Bhavna Aggarwal, who has seven years of experience as a chartered accountant.
Here Are Some Frequent Pitfalls To Avoid When Considering Tax-Saving Investments At The Last Minute:
Invest in tax-saving deposits:
Bhavna, while highlighting the process of tax planning, said, “Tax-saving deposits enable you to invest in order to save tax.”
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The expert said, “Salaried person can do LIC, PPF, HRA deduction, mediclaim, and housing loan.”
For a salaried worker with few tax-saving options, the tax deduction benefits provided through HRA and house loan repayment are crucial since they help save a large amount of tax. If you are qualified to claim several deductions at the same time but do not use them all, you are wasting money that you could have easily saved.
Common Mistakes:According to Bhavna, “Usually some people see a video on YouTube and file an ITR, but lots of amendments come regularly, so consult your CA for correct filing.”
The expert added, “Correct ITR form selection, correct section selection, scheme to opt for the old or new regime, tax calculation, and advance tax payment—these are all the facts that one should always keep in mind while filing their ITR.”
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“If we filed the ITR incorrectly, then assessees may receive an income tax notice for correction and also face interest and penalty liability,” the CA says.
Good ITR
Bhavna emphasised, “Filing a correct ITR once without making corrections again is considered a good ITR with good records in the income tax department, and the chance of scrutiny by the income tax department is very low.”
Let’s Get The Basics Correct:
Typically, the ITR filing deadline is July 31. This year, the same day is scheduled to be the deadline for submitting tax returns.
Where Should I File My ITR?The ITR filing service is provided free of charge on the Income Tax Department’s e-filing website (incometax.gov.in).
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Who has to file an ITR?Anyone earning more than the basic exemption amount of Rs 2.5 lakh is obliged to file an ITR. Individuals with taxable income of up to Rs 5 lakh are now exempt from paying tax.
Well, with all the above advice, we wish you happy saving and happy investing.
