Income tax returns: What problems are taxpayers facing while filing ITR

While filing an income tax return (ITR) has become relatively easy thanks to the prefilled form available on the ITR website, you should be careful, especially if you do not understand the implications of what you are filling in the form. ITR is a form in which taxpayers fill information about their income earned (from various sources) and tax applicable to the income tax (I-T) department. 

When you file ITR, ensure you have the correct information available. You must have Form 16 with you before filing your ITR. It is important because even slight carelessness can lead to a higher tax outgo. Money Today lists five common issues that taxpayers are currently facing while filing ITR are as follows: 

1. Form AIS was introduced with the intent that most common income categories would be part of it, and therefore taxpayers can rely on Form AIS to file their ITR. However, Sudhakar Sethuram, Partner, Deloitte India, said, “Taxpayers are witnessing the Form AIS being updated from time to time as various entities furnish income information per their convenience. In addition, income elements such as capital gains, interest from banks, etc. do not reconcile with the income data available at taxpayers’ end.” This delays the process of filing ITR at the taxpayer’s end. 

2. The prefilled data file fails to capture the data of all the income categories, i.e. salary, house property, etc. Therefore, it becomes difficult for taxpayers to rely on the prefilled data to file the ITRs. 

3. While uploading ITR, the JSON utility file shows errors without reference to the particular section of the ITR. This results in hardships on taxpayers' end to rectify the mistake and refill the ITR 

4. “Taxpayers complain of difficulties accessing or downloading their past years’ ITR to capture the details relevant for filing the current year’s ITR. For example, losses reported in last year’s ITR, details of assets and liabilities, etc.,” said Sethuram. 

5. Taxpayers sometimes cannot access the I-T portal or various sections. This creates problems at the taxpayer’s end. 

But before addressing these common issues, you must understand a few things about filing ITR. 

The I-T department issues ITR forms, which can change year after year. So, you’ll need to know and understand which ITR form you need to fill.  

The computation of income is critical. Considering the old tax regime, you can save tax by claiming deductions under several sections of the I-T Act. For instance, you can save up to Rs 1.5 lakh under section 80C. You can claim health insurance premiums under section 80D, etc, so if you miss claiming expenses that are eligible for deductions, your tax outgo increases. 

If you have changed a job within one financial year, you must take Form 16 from your current and previous employer/s. Computing returns with multiple Form 16s can take some work. Hence, you must be careful while filing ITR in such a case. 

If you think you cannot file ITR independently, you must take experts’ advice. This is because if you misreport any information, fraudulently claim tax refunds, or show false losses that reduce taxable income, the I-T department can levy heavy penalties.