As the Income Tax Return (ITR) filing deadline looms, many taxpayers find themselves rushing to meet the statutory obligation. Tax expert Sunil Garg, in a recent discussion with Zee Business, shared critical insights for those making last-minute preparations, highlighting common pitfalls that can delay refunds or trigger notices from the tax authorities.
Garg’s primary warning is against the common misconception that ITR deadlines will be extended. He states, “The government has become strict; dates are no longer extended.” This underscores the need for timely action rather than waiting for eleventh-hour reprieves. For startup founders, investors, and operators, neglecting this can lead to penalties and unnecessary administrative burdens, diverting focus from core business activities.
A significant mistake, according to Garg, is the failure to properly verify financial records. He advises taxpayers to meticulously cross-check bank statements against their declared income, investments, and expenses. A mismatch, such as declared income of ₹12 lakh against investments and expenses totaling ₹24 lakh, will inevitably lead to scrutiny. This diligence is crucial for maintaining financial transparency and avoiding red flags with the tax department.
Furthermore, Garg stressed the importance of retaining documentation for all significant transactions. “If you have taken a loan, made an investment, purchased a vehicle, or bought jewellery, keep the bills,” he urges. While an asset liability statement might be mandatory for incomes above ₹1 crore, maintaining a comprehensive record of all financial movements is a strategic safeguard. The government can inquire about your financial activities for up to six years, making robust record-keeping an essential practice for both individuals and business entities.
Finally, Garg highlighted the necessity of timely e-verification of the ITR. He noted that refunds are currently processed within 24 to 48 hours, provided no errors are present. Delays in e-verification can stall this process, leading to frustration and potential follow-ups from the tax department. For businesses, ensuring personal and corporate tax compliance is foundational to operational integrity and investor confidence.
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