Ignoring Form 26AS and AIS
One of the most frequent errors is filing your return based solely on Form 16 without cross-verifying the data with your Form 26AS (Tax Credit Statement) and Annual Information Statement (AIS). These documents provide a comprehensive view of all financial
transactions linked to your PAN, including TDS details, interest income, and high-value purchases. A mismatch between the income you declare and the information available to the tax department is a major red flag that can lead to scrutiny, processing delays, and tax demands. Always reconcile these documents before filing.
Choosing the Wrong ITR Form
Selecting the incorrect ITR form is a fundamental error that can render your return 'defective'. For instance, a salaried individual who also has capital gains from selling shares or mutual funds cannot use the simple ITR-1 (Sahaj) form and must instead use ITR-2. Similarly, having income from foreign assets or being a director in a company disqualifies you from using ITR-1. Using the wrong form will, at best, delay your refund and, at worst, lead to your return being rejected, requiring you to refile.
Incorrect Personal and Bank Details
It may seem basic, but errors in personal information like your name, PAN, Aadhaar number, or date of birth are surprisingly common. Even a minor typo can cause a mismatch with official records, stalling the verification process. More critically, providing incorrect bank account details is a direct cause of refund failure. Ensure the account number and IFSC code are correct, and that the chosen bank account is pre-validated on the e-filing portal and linked to your PAN.
Not Reporting All Income Sources
Many taxpayers diligently report their salary income but forget to include earnings from other sources. This includes interest from savings accounts and fixed deposits, rental income, capital gains, or earnings from freelance work. Since all these financial activities are linked to your PAN and reflected in your AIS, the tax department can easily spot any omissions. Failing to report all taxable income can result in an income tax notice, along with interest and penalties on the unpaid tax.
Claiming Ineligible Deductions
While maximizing tax savings is important, you must only claim deductions for which you are eligible and have proof. Claiming deductions under sections like 80C or 80D without having made the actual investments or payments can lead to trouble if your return is picked for scrutiny. It is also crucial to correctly calculate and report exemptions like House Rent Allowance (HRA) and Leave Travel Allowance (LTA). Incorrectly claimed deductions can result in tax demands with added interest.
Forgetting to E-Verify Your Return
Simply submitting your ITR is not the final step. Your return is considered invalid until it is verified. Taxpayers have 30 days from the date of filing to complete the e-verification process, which can be done easily via Aadhaar OTP, net banking, or a demat account. Forgetting this crucial step means the tax department considers your return as not having been filed at all, which can lead to penalties for non-filing and will certainly prevent any refund from being processed.
