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ITR Filing Errors: To stay out of difficulties with the tax agency, income taxpayers should correctly record their income and take any allowable deductions. It is required of you to accurately record your income on your tax return and to claim any deductions and exemptions for which you are qualified under the relevant tax legislation. Deductions that are incorrectly claimed may result in fines and legal action. If differences are discovered, tax officials may pursue legal action.
According to Archit Gupta, founder and CEO of Clear, deductions and exemptions should not be claimed if they are not backed up by actual transactions and supporting documentation. Additionally, it is possible to be charged with tax evasion and subject to penalties, fines, and even criminal charges if you knowingly claim exemptions or deductions to which you are not entitled. The taxpayer may end up in difficulties as a result of underreporting income or incorrectly claiming deductions.
Abhishek Soni, co-founder and CEO of Tax2win, stated that under Section 270A, misreporting of income is punishable by a fine equal to 200% of the tax that was intended to be evaded, subject to specific conditions. Tax authorities have the right to examine your tax return and assess the veracity of the data you provided. They have the right to sue you if they find any inconsistencies or misleading statements. Should the taxpayer receive a notification for the same, Gupta continued, “The taxpayer must be ready to respond to all of the department’s queries and supply proofs wherever requested.”
How can you fix incorrect exemptions and deductions on income tax returns?
You can fix it by filing an amended return under Section 139(5) of the Income Tax Act, says Abhishek Soni, Co-Founder & CEO of Tax2win. But keep in mind that the updated return can be submitted up to three months before the end of the pertinent assessment year; in the case of the financial year 2022–2023, the deadline for submitting the revised return is December 31, 2023.
Filing deadline for ITRs
The Income Tax Return (ITR) filing date is July 31, 2023, for the fiscal year 2022–2023.
