Filing income tax returns (ITR) can be a daunting task for many taxpayers. However, avoiding the common ITR filing mistakes is essential to ensure a hassle-free return filing.

In this article, we will highlight ten crucial ITR filing mistakes to steer clear of, helping you stay compliant with tax laws and avoid unnecessary penalties. Here they go:

Incorrect Personal Information

One of the most critical aspects of ITR filing is providing accurate personal information. This includes your full name, PAN (Permanent Account Number), email ID, and phone number. Any errors in these details can lead to processing delays or issues with your income tax return. Double-checking your personal information ensures a smooth filing process.

Reconciliation of Form 26AS and Form AIS

The government has introduced the Annual Information Statement (AIS) to enhance transparency in reporting income details. “Taxpayers should reconcile Form AIS and Form 26AS with their income records and make any necessary corrections. Providing feedback on Form AIS can help avoid inquiries from the Income Tax Department and ensure compliance,” says Swetha Kochar, Partner, PKC Management Consulting.

Also Read: Income Tax Return Filing: 10 benefits of filing ITR even when not compulsory

Not Reporting All Income Sources

One of the common mistakes taxpayers make is failing to report all sources of income while filing their ITR. It is crucial to include all income, such as salary, rental income, interest income, capital gains, and business income. Overlooking any income source can attract penalties or even legal actions. So, be diligent in reporting all earnings.

Forgetting to Claim Deductions

Claiming deductions is an effective way to reduce your taxable income and lower your tax liability. Deductions such as medical insurance, education loan interest, and charitable donations can lead to significant tax savings. Ensure you are aware of all eligible deductions and claim them diligently, especially if you are filing income tax under the old regime.

Not Verifying the ITR

Verifying your ITR is crucial to confirm that it has been successfully filed. “You can complete the verification process electronically or by sending a signed copy of the ITR-V form to the Centralized Processing Centre (CPC) within 120 days of filing. Neglecting this step can render your ITR invalid. So, make sure to verify it timely,” informs Kochar.

Incorrect Bank Account Details

Providing correct bank account details is essential, especially if you are eligible for a tax refund. Any errors in the bank account information can lead to delays or even non-receipt of the refund. Double-checking the bank account details can save you from unnecessary hassles and ensure a smooth refund process.

Missing to report Assets or Liabilities, Foreign Assets, Directorship, or Unlisted Share Holding

Taxpayers with income exceeding INR 5 million should report their assets and liabilities. Additionally, ordinarily resident taxpayers must furnish details of overseas assets. “If you hold directorship in a company or have unlisted shareholdings, those should also be reported. Neglecting to disclose these details may invite scrutiny under the Income-Tax Act and the Black Money Act,” says Kochar.

Particulars of TDS and TCS

While filing your ITR, ensure that you accurately claim the Taxes Deducted at Source (TDS) or Taxes Collected at Source (TCS). Any discrepancies in these particulars can result in a mismatch of tax credit and lead to demand for additional taxes. Double-checking these details can prevent unnecessary tax burdens.

Not Filing ITR on Time

Filing your ITR within the due date is crucial to avoid penalties and interest. The general deadline for filing ITR is July 31st, but it may be extended to September 30 in some cases. Missing the deadline can result in financial consequences, so make it a priority to file your ITR on time.

Not Keeping Proper Records

Maintaining comprehensive records is vital to substantiate your claims while filing the ITR. These records include bank statements, receipts, invoices, and other relevant documents. Proper documentation can prove beneficial in case of any query or assessment by the tax authorities.

Avoiding these ITR filing mistakes will keep you compliant with tax regulations. Remember to provide accurate personal information, report all sources of income, claim eligible deductions, and verify your return before the deadline. Keeping proper records and reconciling financial details will ensure a smooth and stress-free ITR filing experience.