The deadline to file income tax returns (ITR) for the financial year 2024–25 (AY 2025–26) is closing in fast. The government had extended the due date from July 31 to September 15. But it is wise to not wait until the last minute to avoid both technical glitches on the income tax portal and errors that could trigger scrutiny or refund delays.
The Income Tax Department has rolled out utilities for ITR-1 to ITR-4, covering a majority of individual taxpayers. However, with the department’s increasing reliance on technology and artificial intelligence to track discrepancies, filing carelessly may prove costly. Here are seven mistakes that taxpayers should avoid while filing returns:
Technical filing mistakes to avoid
Fraudulent deductions: It may be tempting to exaggerate deductions under Sections 80C, 80G or 80U to trim your tax bill. But the tax department’s AI-backed systems cross-check claims against your Annual Information Statement (AIS). False deductions are easy to flag and could result in notices or penalties.
Over-reliance on Form 16: Salaried employees often fail to account for savings account interest, dividends or mutual fund capital gains since these don’t appear on Form 16. The AIS captures these and non-disclosure can lead to compliance queries.
Foreign assets disclosure: Indians returning from overseas often overlook disclosing dormant foreign accounts, stock options, or pension holdings. While penalties have been eased — non-reporting of movable foreign assets below Rs 20 lakh is no longer penalised — reporting is still mandatory.
Job switch oversight: Professionals with multiple employers in a year must consolidate income across all Form 16s. The AIS auto-populates these details, so any omission may result in a mismatch and subsequent notice.
Common ITR filing mistakes to avoid
Wrong ITR form: Choosing ITR-1 when capital gains or foreign assets are involved can render a return defective and invite suspicion of concealment. ITR-1 is used by the taxpayers with an annual income from salary and pensions up to Rs 50 lakh. Taxpayers with long-term capital gains above Rs 1.25 lakh or overseas accounts must use ITR-2.
Mismatch in records: Taxpayers often overlook reconciling their Form 16, Form 26AS and AIS before filing. Discrepancies in TDS, interest income or property transactions must be resolved by contacting the deductor or flagging errors on the AIS portal. Filing without corrections risks notices and refund adjustments.
Personal details and verification of ITR: Refunds are processed only through pre-validated bank accounts. Errors in account number, IFSC or even personal details like PAN and email can hold up payouts. And, filing is not enough. ITR filing is incomplete without e-verification via Aadhaar OTP, net banking or other approved modes.