Hiding income or making wrong claims? Your ITR could attract a 200% penalty
It's that time of the year again when taxpayers across the country start filing their Income Tax Returns (ITR). But hold on. If you're all set to hit submit, take a moment and double-check your return. Under the new ITR rules, even a small mistake or a false claim can lead to big trouble.If a taxpayer hides actual income, a 200% penalty on the tax evaded is charged for misreporting. For underreporting, the penalty is 50% of the tax owed under Section 270A, as mentioned by ClearTax.advertisementSounds serious? It is. That's why you need to be extra careful while filing your ITR, as even minor errors can result in significant financial consequences. Therefore, taxpayers must be vigilant and ensure all information is accurate to avoid hefty penalties.COMMON MISTAKES IN ITR FILING
One of the primary areas of concern is the tendency of taxpayers to claim deductions under Section 80C without adequate proof or documentation.Additionally, issues arise when taxpayers declare false House Rent Allowance (HRA) claims or list personal expenses as business expenses. Such practices can lead to severe penalties, regardless of the taxpayer's intentions or errors.Moreover, failing to report earnings from freelancing, crypto, or side jobs in your ITR may attract strict penalties. Make sure nothing is left out.AVOIDING PENALTIESTo avoid incurring penalties, taxpayers should ensure that all claims are backed by legitimate documentation. Mistakes made by a Chartered Accountant (CA) or consultant do not exempt taxpayers from liability. The law holds the taxpayer accountable, not the person who prepared the return.Therefore, it is imperative for individuals to review their tax returns meticulously before submission. This proactive approach can safeguard against potential errors and subsequent penalties.- EndsTrending Reel
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