Best ways to save tax in 2020 -A test article

The Central Board of Direct Taxes (CBDT) has extended the deadline for filing Income Tax Returns (ITRs) for the assessment year 2019-20 from July 31, 2019 to August 31, 2019. Taxpayers must be extra careful as a small mistake incurred during filing the returns can result in a notice from the Income Tax department (I-T department), asking for an explanation for the discrepancies. Here's how taxpayers can avoid mistakes while filing ITRs:

The foremost task is to select the correct ITR form and the assessment year. If a wrong form is filed, then return will be termed as 'defective'. Individual can determine the type of form applicable to him/her depending on the sources from which income was earned in the relevant financial year.

Personal details like name, phone/mobile number, date of birth, address, email ID should be filed correctly by the taxpayer. Also, make sure that such details match with PAN (permanent account number).

Individuals often miss out disclosing details like interest income earned from savings bank account, fixed deposits (FDs), recurring deposits (RDs), infrastructure bonds or other sources under the head 'income from other sources'. A taxpayer is required to report all such income from investments.

The exemption under section 80TTA is only for interest on savings bank balance. Interest from other sources, such as 5-year tax saving bank FDs, is fully taxable. Interest from tax-free instruments like Public Provident Fund (PPF) and tax-free bonds also have to be reported in the return.

Taxpayers should mention all bank accounts held by them in the ITR forms. Bank details should be reported accurately along with the IFSC (Indian Financial System Code) to make the return process smoother.

The I-T department requires a taxpayer to report all their income in the return forms, be it taxable income or exempt from tax.

If an individual has switched jobs in the financial year 2018-19 then income from previous job should be reported along with income from the current job while filing the tax return. A discrepancy is bound to reflect in Form 16 (TDS certificate) and Form 26AS if such income is not reported.

Individuals tend to believe that since their income is subject to TDS (tax deducted at source), they don't have to file returns. However, it is mandatory for a person to pay file his/her return if the gross total income exceeds Rs 2.5 lakh. Even if the tax liability is zero after deduction under section 80C, the return has to be filed.

If a taxpayer has made investments in the name of his/her minor child, or gave money to spouse for investing, the income from such investments will also be treated as income and should be disclosed in ITR form.

Any mistake discovered after filing the tax return must be rectified by filing a revised return. Taxpayer can pay the revised return within one year after the expiry of relevant financial year. Accordingly, the last date for filing revised return for financial year 2018-19 is March 31, 2020.