Dos and Don'ts of Income Tax
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Dos and Don'ts of Income Tax
1. Do File Your Tax Return on Time
Ensure you file your Income Tax Return (ITR) before the due date to avoid penalties and interest charges.
2. Do Maintain Proper Records
Keep documentation of your income, expenses, investments, and tax-saving proofs for at least 6 years.
3. Do Report All Sources of Income
Include all income, such as salary, freelance, rent, interest, capital gains, etc., in your ITR.
4. Do Verify Form 26AS and AIS
Cross-check Form 26AS and Annual Information Statement (AIS) for any discrepancies in TDS or reported income.
5. Do Use the Correct ITR Form
Choose the appropriate ITR form based on your income type and category (individual, HUF, company, etc.).
6. Do Claim Eligible Deductions and Exemptions
Utilize deductions under sections like 80C, 80D, 24(b), and exemptions under section 10 where applicable.
7. Do Link PAN with Aadhaar
Ensure PAN and Aadhaar are linked to avoid invalidation of PAN and issues in filing returns.
8. Do Respond to Notices Promptly
Always respond to any communication or notice from the Income Tax Department within the stipulated time.
9. Do Pay Advance Tax if Applicable
If your tax liability exceeds ₹10,000 in a financial year, pay advance tax in quarterly installments.
10. Do E-Verify Your Return
After filing your return, complete the e-verification process to validate and process the return.
1. Don't Miss the Filing Deadline
Late filing can attract penalties, interest, and even disallowance of some deductions or carry forward of losses.
2. Don’t Underreport or Hide Income
Suppressing income is considered tax evasion and may result in penalties or prosecution.
3. Don't Claim False Deductions
Avoid making false or inflated deduction claims; these can lead to scrutiny and penalties.
4. Don’t Use Incorrect Bank Details
Enter accurate bank account details to ensure timely receipt of tax refunds.
5. Don’t Ignore Form 16/Form 16A
Ensure TDS deductions from salary, interest, or contracts are correctly reflected and matched.
6. Don’t Delay Tax Payments
Timely payment of self-assessment or advance tax helps avoid interest under sections 234A/B/C.
7. Don’t Share PAN and Aadhaar Carelessly
These are sensitive documents; misuse can lead to fraudulent filings in your name.
8. Don’t File Returns Without Review
Always review your ITR before submission to avoid errors or omissions.
9. Don’t Use Unreliable Sources for Filing
File through the official Income Tax portal or authorized professionals to avoid data breaches or incorrect filing.
10. Don’t Assume You’re Exempt
Even if your income is below the taxable limit, filing a return may still be beneficial for visa, loan, or refund purposes.
Swami Associates is a trusted financial and taxation consultancy firm based in Koperkhairne, Navi Mumbai. Since our establishment in 2005, we have been delivering expert solutions in direct and indirect taxation, serving individuals, professionals, and corporate clients for over two decades.
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