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Avoiding Costly Errors in ITR Filing 2025: Typical Blunders to Avoid

Ready your ITR forms for the fiscal year 2024-2025, as they're now up and running. Take this opportunity to gear up and steer clear of rush-hour blunders.

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Prepare for Income Tax Returns (ITR) forms in the financial year 2024-25, as they're now...
Prepare for Income Tax Returns (ITR) forms in the financial year 2024-25, as they're now accessible. Take advantage of this early access and steer clear of last-minute blunders.

Prepare Your ITR Now for FY 2024-25 to Steer Clear of Last-Minute Fumbling and Potential Errors

Avoiding Costly Errors in ITR Filing 2025: Typical Blunders to Avoid

Hey there! With the deadline for filing Income Tax Returns (ITR) for FY 2024-25 looming on July 31, 2025, it's high time to roll up your sleeves and get ready to navigate the tax season like a boss!

CBDT's Announcement - The Lowdown on ITR FormsAs the Central Board of Direct Taxes (CBDT) has already notified ITR forms 1, 2, 3, 4, and 5 for FY 2024-25, knowing which one to pick can make or break your return. Choosing incorrectly can result in an invalid submission that requires a revision, causing you a world of headaches.

ITR Form Selection - A Matter of Income TypeFor most taxpayers who have a simple income composition, resident individuals (excluding not ordinarily residents) with income beneath ₹50 lakh from salary or pension, one house property (excluding cases with carried-forward losses), and other sources (excluding lottery winnings and income from racehorses), the ITR-1 (Sahaj) form is the applicable choice. But remember, if your income is more complex, forms like ITR-2 or ITR-4 might be needed instead.

This Year's ITR-1 Update - What's Changed?The revised ITR-1 form for FY 2024-25 comes packed with a few changes:

  • Long-Term Capital Gains (LTCG) Reporting - Now you can report LTCG up to ₹1.25 lakh under Section 112A from listed equity shares or equity mutual funds within the ITR-1 form.
  • More Detailed Reporting for Deductions and TDS - To provide a cleaner, more standardized filing experience, taxpayers will now need to provide detailed section-wise information for TDS deductions. Deductions under sections like 80C and 80GG will have a drop-down menu in the filing utility for simplification.
  • Improved Form Utility Enhancements - The ITR filing utility has received updates to make filing easier and more accurate. A drop-down menu and enhanced details capture have been added to aid the filing process.

Common Pitfalls to Steer Clear OfWhile the revised ITR form provides a more user-friendly experience, avoiding common errors can save you from penalties, delayed refunds, or even departmental scrutiny:

  • Selecting the Wrong ITR Form - Using the incorrect ITR form can render your return invalid, forcing you to file a revised version.
  • Filing Late - Missing the July 31 deadline can lead to penalties up to ₹10,000 and might limit your ability to carry forward losses or claim certain deductions.
  • Forgetting to Report All Sources of Income - Omitting any income source can raise red flags with the department. Remember to report all income, including interest from savings or fixed deposits, rental income, or capital gains.
  • Failing to Verify the Return - An unverified return is treated as invalid. Verify your return online either through Aadhaar OTP or net banking to ensure that it is legitimate.
  • Ignoring Cross-Checking with Form 26AS and the AIS - To correct any potential mismatches between your records and the department's data, compare your records with Form 26AS and the Annual Information Statement (AIS) before submitting. These forms provide a summary of taxes paid and financial transactions.

The Bottom LinePreparing your ITR early, being informed, and filing diligently can help ensure a smooth and hassle-free tax season. Don't let last-minute mistakes or common errors catch you off guard. Get your ducks in a row now and breathe easy come tax time!

  1. The revised ITR-1 form for FY 2024-25 includes a section to report Long-Term Capital Gains (LTCG) from listed equity shares or equity mutual funds, a common aspect in personal-finance and finance.
  2. In the defi market, decentralized finance projects have the potential to disrupt traditional banking and finance systems, offering innovative solutions for personal-finance management.
  3. As the tax season approaches, understanding the differences between ITR forms such as ITR-2 and ITR-4 becomes crucial for taxpayers with complex incomes, impacting both personal-finance and the larger finance market.

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