Choosing the Wrong ITR Form
One of the most fundamental errors is selecting an incorrect ITR form, which can lead to your return being classified as 'defective' by the tax department. For most salaried individuals with an income up to ₹50 lakh from salary, one house property, and
other sources like interest, ITR-1 (Sahaj) is appropriate. However, if you have income from capital gains (from selling stocks or property), own more than one house property, or have foreign assets, you must file ITR-2. Filing ITR-1 when ITR-2 is required is a common last-minute oversight. Carefully assess all your income sources before starting the filing process to ensure you choose the correct form.
Not Reconciling with Form 26AS and AIS
Relying solely on your Form 16 is a significant mistake. The Income Tax Department has comprehensive data on your financial transactions in your Annual Information Statement (AIS) and Form 26AS. These documents record details of tax deducted at source (TDS) by your employer, banks, and other entities, along with information on interest income, dividends, and high-value transactions. Before filing, you must cross-verify the income and TDS details in your ITR draft with your AIS and Form 26AS. Any mismatch can trigger an automated notice from the tax department, leading to scrutiny and potential tax demands.
Forgetting to Report All Income Sources
Many salaried taxpayers mistakenly believe they only need to declare their salary income. However, you are required to report income from all sources. This includes interest earned from savings accounts and fixed deposits, dividend income, rental income, and any capital gains from investments. Even if tax has been deducted (like TDS on FD interest), the gross income must be reported in your ITR. The AIS will reflect most of this income, so failing to declare it is an easy way to get a notice for under-reporting income. Also, remember to consolidate income from all employers if you changed jobs during the financial year.
Making Errors in Personal Information
Rushing through your return can lead to simple but costly data entry errors. Incorrectly entering your PAN, Aadhaar number, date of birth, or contact details can cause processing delays. A particularly critical detail is your bank account information. Ensure the bank account number and IFSC code you provide for your refund are correct and that the account is pre-validated on the e-filing portal. An error here will lead to refund failure, forcing you to raise a 'refund reissue request' and causing unnecessary delays.
Incorrectly Claiming Deductions
While you should claim all deductions you are eligible for, claiming incorrect ones can lead to problems. Common deductions under Chapter VI-A include those under Section 80C (for PPF, ELSS, life insurance), Section 80D (health insurance premiums), and Section 80TTA (on savings account interest). Ensure you have proof for all deductions claimed and that you have not exceeded the prescribed limits. Also, be mindful of which tax regime you have chosen. If you opt for the new tax regime, you cannot claim most of these popular deductions. Claiming deductions available only under the old regime while filing under the new one will result in an incorrect return.
Forgetting to Verify Your Return
Submitting your ITR is not the final step. After filing, you must verify your return within 30 days. If you fail to do so, your ITR will be considered 'invalid', which is equivalent to not having filed it at all. This can lead to a late filing fee of up to ₹5,000. The easiest way to verify is electronically through an Aadhaar OTP or your net banking account. This final step is crucial for the tax department to start processing your return and issue any applicable refund. An unverified return is an incomplete one, so do not forget this critical last step in the rush to meet the deadline.
