1. Choosing the Incorrect ITR Form
One of the most frequent preliminary errors is selecting the wrong ITR form. While ITR-1 (Sahaj) is the default for many salaried individuals, it comes with strict eligibility criteria. You can only use ITR-1 if your total income is up to ₹50 lakh from
salary, one house property, and other sources like interest, with agricultural income up to ₹5,000. If you have any capital gains from selling stocks or mutual funds, income from more than one house property, foreign assets or income, or if you are a director in a company, you must file ITR-2. Filing the wrong form can lead to your return being marked as 'defective' by the tax department, requiring you to file a revised return.
2. Not Reconciling Form 16 with AIS and Form 26AS
Simply copying details from your Form 16 is no longer sufficient. The Income Tax Department now relies heavily on the Annual Information Statement (AIS) and Form 26AS, which consolidate all your financial transactions and taxes paid during the year. Your AIS contains details of salary, interest income, dividends, and securities transactions. Form 26AS is the controlling document for tax credits (TDS). It is crucial to reconcile the TDS details in your Form 16 with those in Form 26AS and cross-verify all income with your AIS. Any mismatch between what you report and what the department's records show can trigger an automated notice, delay your refund, or lead to a tax demand.
3. Forgetting to Report All Income Sources
Many salaried taxpayers mistakenly assume that only their salary is taxable and forget to declare income from other sources. This is a significant oversight, as the tax department has access to this information through your AIS. Common unreported income sources include interest from savings bank accounts (taxable above ₹10,000 for non-senior citizens), interest from fixed or recurring deposits, dividend income from stocks or mutual funds, rental income from a second property, or gains from selling securities. Even exempt income, like that from a Public Provident Fund (PPF), should be reported under the 'Exempt Income' schedule for complete transparency.
4. Claiming Incorrect Deductions or Choosing the Wrong Regime
Taxpayers often make errors when claiming deductions. This includes claiming deductions without valid proof, such as for investments under Section 80C or rent receipts for HRA, or exceeding the permissible limits. Another common mistake is confusion between the old and new tax regimes. The new regime offers lower slab rates but disallows most common deductions like those under Section 80C, 80D, and HRA. It is essential to compare your tax liability under both regimes before filing to see which is more beneficial for your financial situation. Choosing a regime without doing this calculation can lead to a higher tax outgo.
5. Not E-Verifying the Return After Filing
Filing your ITR is a two-step process. The final and most critical step is to verify your return. Many taxpayers forget to do this, rendering their filed return 'invalid'. An unverified ITR is treated as if it was never filed. The deadline for e-verification is now 30 days from the date of filing. You can verify your return electronically using an Aadhaar-based OTP, net banking, or by sending a physical, signed copy of the ITR-V acknowledgment to the Centralised Processing Centre (CPC) in Bengaluru. Failure to verify on time can lead to a late filing penalty.
