Choose the Correct ITR Form
One of the most frequent yet easily avoidable errors is selecting the wrong ITR form. The form you need depends entirely on your sources of income. For instance, ITR-1 (Sahaj) is for resident individuals with a total income up to ₹50 lakh from salary,
one house property, and other sources like interest. If you have income from capital gains or more than one house property, you would likely need ITR-2. Filing with an incorrect form can lead the Income Tax Department to mark your return as 'defective', potentially causing processing delays and requiring you to file a corrected return.
Reconcile Income with Form 26AS and AIS
Before you file, it is essential to cross-reference the income you are declaring with your Form 26AS and the Annual Information Statement (AIS). Form 26AS is a consolidated statement of all taxes deducted from your income (TDS), while the AIS provides a comprehensive view of your financial transactions reported by various entities. A mismatch between the income you report and the data in these forms is a red flag for the tax department and can trigger a notice. Take the time to ensure all your salary, interest income, and other earnings align with these official documents.
Report All Sources of Income
It’s surprisingly easy to overlook some income streams, but doing so can lead to penalties for underreporting. Many people forget to include interest earned from savings bank accounts, fixed deposits, or even income from freelancing gigs. All sources must be declared, no matter how small. This includes rental income, dividends from shares or mutual funds, and any capital gains from selling assets like property or stocks. Transparency is key to a clean tax record.
Verify Your Bank Account for Refunds
If you are expecting a tax refund, this check is non-negotiable. You must ensure that the bank account you have provided is pre-validated on the income tax portal. An unvalidated or incorrect account number is a primary reason for refund failures or delays. The process is straightforward and involves linking your PAN with your bank account through the e-filing portal. Taking a few minutes to confirm these details ensures that any refund due reaches you without a hitch.
Claim All Eligible Deductions
While it's important to report all income, it's equally important to claim all the deductions you are legally entitled to. Many taxpayers miss out on deductions under sections like 80C (for investments in PPF, ELSS, life insurance), 80D (for health insurance premiums), and HRA (House Rent Allowance). Keep all your investment proofs, rent receipts, and donation slips handy when filing. Maximising your deductions under the appropriate tax regime can significantly lower your taxable income.
Don't Forget to E-Verify Your Return
This is the final, crucial step that many filers forget. Submitting your ITR is not the end of the process; you must also verify it. An unverified return is considered invalid, as if it was never filed at all. The Income Tax Department provides a 30-day window from the date of filing for verification. There are multiple easy ways to e-verify, including through an Aadhaar OTP, net banking, or a Demat account. Completing this step confirms your filing and initiates processing for any refunds.
