ITR filing AY 2026-27: These common mistakes can delay your income tax refund

But you must remember that filing a correct return is much more important than filing early, as even a small mistake in your return can delay the money reaching your account. 

The Income Tax Department now uses a technology-driven system to match the details you report with your AIS, Form 26AS, TDS records, bank account details, and past tax filings, so any mismatch or missing information can trigger delays, scrutiny, or clarification notices. 

Also, while the new Income Tax Act, 2025, came into effect from April 1, 2026, the tax assessment for AY 2026-27 (income earned in FY 2025-26) will still be governed by the provisions of the old Income Tax Act, 1961. 

In this backdrop, taxpayers should stay alert to some common filing mistakes that could hold up their refunds, according to CA (Dr.) Suresh Surana.

Not e-verifying the ITR after filing – Many taxpayers file their ITR on time but forget to e-verify it. An ITR is considered complete only after successful e-verification, and refund processing starts thereafter. If the return is e-verified after 30 days of filing, the date of such verification/receipt by CPC will be treated as the actual filing date, which may attract consequences of delayed filing under the ITA 1961. Further, if the ITR is not verified at all, it may be treated as invalid, as if it were never filed.

Incorrect or non-validated bank account details – Refunds are credited only to a PAN-linked and pre-validated bank account. Providing an incorrect account number, IFSC code, closed bank account, or failure to validate the account on the portal can result in refund failure or delay.

Mismatch between AIS / Form 26AS / Form 16 and ITR – If income, TDS, interest income, stock transactions, or other details reported in the ITR do not match AIS or Form 26AS, the return may be flagged for review. This is one of the biggest reasons for refund delays. Taxpayers should reconcile all figures before filing.

Claiming excess or incorrect TDS credit – Claiming TDS that is not reflected in Form 26AS or claiming a higher amount than actually deducted can lead to processing issues and lower or delayed refunds.

Selecting the wrong ITR form – Choosing an incorrect ITR form may lead to defective return notices, delays in processing, or refund hold-ups. Taxpayers should ensure that the selected form matches their income sources, residential status, and taxpayer category. For instance, filing ITR-1 when you are not eligible (for example, for a taxpayer having foreign assets, capital gains, multiple house properties, or business income) may result in a defective return notice and delay processing.

Wrong deduction or exemption claims – Incorrect claims under sections such as deductions, HRA, interest deduction, or rebate provisions can trigger additional scrutiny and hold up refunds. Taxpayers should always match claims with supporting documents and Form 16.

Other than ITR Filing cases, where the refund may be delayed, may include:

Ignoring defective return notices [Section 139(9) of the ITA 1961] – If the department flags your return as defective and seeks clarification, failure to respond within the specified time can make the return invalid.

Not responding to adjustment notices [Section 143(1)(a) of ITA 1961] – The Central Processing Centre (CPC) may propose adjustments for mismatches or incorrect claims. Ignoring these communications can result in a reduced refund, no refund, or even a tax demand.

Pending old tax demand under Section 245 of ITA 1961 – If there is an outstanding demand from previous years, the department may adjust your current refund against it. Many taxpayers assume the refund is delayed when it has actually been adjusted.

What mistakes do first-time taxpayers make while filing ITR-1 or ITR-2?

First-time taxpayers often make the critical error of selecting the wrong form. A costly error that many are new to the tax system make is selecting the wrong form. They usually file ITR-1 by not being aware that this form can be filed only by individuals who have an income of up to Rs 50 lakh from salary, one house property and other basic sources such as interest. If you have made capital gains by selling stock, mutual funds or property during the financial year, you will have to file ITR-2 instead. Choosing the wrong form will completely invalidate your filing and result in a defective return notice from the tax department.

Many beginners think that if the tax has been deducted at source (TDS) or if the amount is small, it does not need to be declared. You must declare interest for every rupee. However, you can avail a deduction of up to Rs 10,000 on savings account interest under Section 80TTA. If they ignore the discrepancies in their official tax records, it also causes severe processing delays for taxpayers. The Income Tax Department keeps a record of your financial footprint through AIS, i.e. Annual Information Statement and Form 26AS. If the income or TDS that you declare does not match the data already compiled in your AIS, then the system will automatically flag your return as a mismatch.

Last but not least, many taxpayers miss out on legitimate deductions like medical insurance premiums under Section 80D for not submitting the receipts. Others enter the incorrect bank account details or do not pre-validate their account on the portal, which generally delays any tax refunds. Most importantly, many first-timers forget that filing the income tax return is not the last step; you have to e-verify the document through Aadhaar OTP or net banking within the mandatory 30-day window, or the entire return is treated as invalid. 

How important is AIS and Form 26AS reconciliation before filing returns?

A common mistake that occurs while filing tax returns is the reconciliation of their ITR with AIS, Form 26AS, TIS, which includes incorrect TDS claims, a mismatch in capital gains reporting (particularly the off-market transactions), omission of saving bank interest income, selection of incorrect ITR forms, non-reporting of foreign assets, and failure to pre-validate bank accounts. Given the increased scrutiny on incorrect exemption and deduction claims, accurate and well-reconciled reporting has become essential for faster processing and timely refunds.

How does a defective return notice under Section 139(9) impact refunds?

Sandeep Bhalla, Partner, Dhruva Advisors, says, there is now enhanced automated validation, risk profiling, and data analytics mechanisms, due to which even minor inconsistencies may trigger refund delays, defective return notices, or further verification. Another critical aspect is timely e-verification of the return, as refund processing does not commence until verification is completed.

Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Tax laws and regimes are subject to frequent changes by the government. Readers should verify details with official Income Tax Department notifications or consult a Chartered Accountant before making any financial decisions.