Common ITR Filing Mistakes & How to Avoid Them?

Filing an Income Tax Return (ITR) is an essential financial responsibility for every taxpayer in India. While the process has become more streamlined with online filing options, many individuals still make common mistakes that can lead to penalties, notices, or delays in refunds. To ensure a smooth tax filing experience, here are some of the most common ITR filing mistakes and how to avoid them.

1. Incorrect Personal Details

One of the simplest yet most frequent mistakes is entering incorrect personal details such as name, PAN (Permanent Account Number), Aadhaar number, or bank account information. Errors in these details can lead to rejections or delays in processing the return.

How to Avoid:

Cross-check all personal details before submitting the ITR.

Ensure that your name matches exactly with the records in your PAN and Aadhaar card.

Double-check your bank account number and IFSC code to ensure a smooth refund process.

2. Choosing the Wrong ITR Form

The Income Tax Department provides different ITR forms based on the type of income, profession, and category of taxpayer. Filing the wrong form may lead to an incomplete submission, requiring corrections later.

How to Avoid:

Understand which ITR form applies to you:

ITR-1 (Sahaj): For salaried individuals with income up to Rs. 50 lakh.

ITR-2: For individuals with capital gains, multiple income sources, or foreign income.

ITR-3: For professionals and business owners.

ITR-4 (Sugam): For presumptive taxation scheme taxpayers.

If unsure, consult a tax expert or use the Income Tax e-filing portal’s assistance tool.

3. Not Reporting All Income Sources

Many taxpayers report only their primary salary income and forget to disclose additional income such as:

Interest earned from savings accounts, fixed deposits, or recurring deposits.

Freelance or side-business earnings.

Rental income from property.

Capital gains from stock market or real estate transactions.

How to Avoid:

Collect all income-related documents such as bank statements, Form 16, Form 26AS, and stock trading statements before filing.

Verify Form 26AS to cross-check the tax deducted at source (TDS) and match it with your income.

Even if some income is tax-exempt, such as PPF interest, it should still be reported.

4. Failing to Claim Deductions & Exemptions

Many taxpayers miss out on deductions under Sections 80C, 80D, 80E, and others, which can help in reducing tax liability.

How to Avoid:

Be aware of eligible deductions:

80C: Up to Rs. 1.5 lakh for investments in EPF, PPF, ELSS, life insurance, etc.

80D: Health insurance premium for self and family.

80E: Interest on education loans.

80G: Donations to charitable organizations.

Maintain all investment and payment receipts to claim deductions accurately.

5. Not Verifying the ITR After Filing

Filing an ITR does not mean the process is complete. If you fail to verify the return, it will not be processed by the Income Tax Department, making it invalid.

How to Avoid:

Verify your ITR within 30 days of filing.

You can verify electronically using Aadhaar OTP, net banking, or by sending a signed ITR-V to the CPC in Bengaluru.

E-verification is the fastest and easiest method.

6. Mismatch Between Form 16, Form 26AS & AIS

Form 16 (issued by your employer), Form 26AS (tax credit statement), and the new Annual Information Statement (AIS) contain records of tax deducted and paid. If there is a mismatch in these documents, the Income Tax Department may raise a query or demand additional taxes.

How to Avoid:

Download Form 26AS and AIS from the Income Tax portal before filing.

Ensure that the details match with your Form 16 and income records.

In case of discrepancies, contact your employer or deductor for corrections before filing.

7. Not Paying Self-Assessment Tax (If Applicable)

If TDS deducted is less than the total tax liability, the taxpayer must pay the remaining tax before filing. Many forget to do this, leading to additional interest and penalties.

How to Avoid:

Calculate tax liability accurately before filing.

If you owe additional tax, pay it through the tax portal under the 'Challan 280' option.

Enter the tax payment details in the ITR before submission.

8. Filing ITR After the Due Date

Missing the deadline for filing ITR (typically July 31 for individuals) results in late fees, interest on unpaid tax, and loss of certain benefits.

How to Avoid:

Mark the ITR deadline on your calendar.

Prepare and file your return well before the deadline to avoid last-minute technical issues on the portal.

If you miss the deadline, file a belated return as soon as possible to minimize penalties.

9. Ignoring Revised Returns and Rectifications

After filing, if you notice an error, many taxpayers ignore it instead of correcting it.

How to Avoid:

The Income Tax Act allows taxpayers to file a revised return before the end of the assessment year.

Use the ‘Rectification’ feature on the e-filing portal to correct any errors detected by the department.

10. Not Keeping a Copy of Filed Returns

Many taxpayers do not save a copy of their ITR, which is important for loan applications, visa processing, and future tax assessments.

How to Avoid:

Always download and store a copy of the acknowledgment and ITR form after filing.

Maintain a digital backup in a secure location for easy access when needed.

Conclusion

Filing your ITR correctly is crucial to ensure compliance and avoid unnecessary hassles with the Income Tax Department. By being cautious and avoiding these common mistakes, you can streamline the filing process, claim all eligible benefits, and receive refunds without delay. If you are unsure about any aspect of your ITR filing, consulting a tax expert can help you file accurately and efficiently.