The income you make is categorized and taxed in three different ways: tax deducted at the source, advance tax payments, and self-assessment taxes that are paid ahead of time. When you earn an income that satisfies any one of these criteria, you will be subject to the tax laws, and you need to make an income tax payment.
In general, anyone with an income that crosses 10,000 Indian Rupees will be liable to pay taxes. Salary received and subject to TDS doesn’t need to pay advance tax in their monthly income. Yet, if you have capital gains or interest income – you will be taxable.
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When you engage in income tax E-Payment, there are few mistakes you should avoid. In this post, we will focus on these mistakes.
#1 The Year!
First things first, you must choose the assessment year carefully. Whether it is an advance tax or a self-assessment, the year must be accurate. A lot of people tend to confuse financial and assessment year. You must be aware of the fact that the assessment year follows the actual financial year. And, your tax returns will be filed for a specific financial year.
Let’s understand this with an example. If the financial year is 2020 – 2021, the assessment year will be 2021 – 2022. The financial year corresponds to the ongoing year in which you are making the declarations. If you choose the wrong form, the data will not be reflected correctly on your assessment year.
#2 Personal Data
Secondly, the personal data disclosed in the forms are inaccurate. This could be anything like your address, name, bank IFSC code, and account. When you make mistakes in these fields, the refunds will take more time than usual. This is why you should be extremely careful when you fill your income taxes.
#3 Missing Income
A common mistake made by candidates filling the income tax online would be missing certain sources of income. If you have multiple sources of income, there are chances of you missing some erroneously. For instance, an interest gained from your bank FD can be missed easily. A lot of people don’t consider these as a source of income in the first place. Likewise, if you have made income from an investment your child or partner made – they will be taxable. And, any income from your previous company should be shown in your financial year document.
Unfortunately, a lot of people tend to miss, and they end up refiling their taxes.