Depositing tax is an important wtopic for every person. Be it making tax-saving investments, paying taxes on time or filing Income Tax Returns (ITR). Many times people make some such mistakes while depositing tax, due to which they have to suffer huge losses in the coming future. Here we are going to tell you about some such mistakes…
If a taxpayer does not deposit the tax on time, then that person has to pay interest on the entire outstanding amount deposited. If the amount of tax is more then legal action can also be taken against that person.
Similarly, if the ITR is not filed within the due date, the taxpayer has to pay a late fee. Apart from this, more interest has to be paid on the tax collected.
Most of the people pay tax at the end of the assessment year. In such a situation, if there is any mistake while filing the income tax return, the taxpayer does not get a chance to rectify it. Its taxpayer has to bear heavy loss.
Most people wait till the end of the financial year to deposit their tax saving investments. After that, they make a mistake in choosing the right investment instrument in a hurry or end up paying more tax if they miss the deadline. Since tax saving investments are generally long term investments, one needs to do proper planning before making a long term commitment.
Vikas Singhania, CEO, Trade Smart, said that most people choose the first tax-saving investment that is in front of them or completely ignore any tax planning. Some people feel that saving a small amount of tax and blocking big capital is not a good idea. Whereas people can save a huge amount in future through such small savings.
Singhania said common mistakes include delay in tax planning in the last few months of the year, investing in low-return instruments, over-planning and not taking full advantage of exemptions and deductions. These are the mistakes that most people make.