Reconcile the Holy Trinity: Form 16, 26AS, and AIS
This is the most critical check. Your Form 16 is what your employer reports. Form 26AS is your tax passbook, showing all tax deducted on your behalf. The Annual Information Statement (AIS) is a comprehensive report of all your financial transactions known
to the tax department. Mismatches between these three are the biggest red flag for the income tax department. For instance, if the TDS amount in your Form 16 is different from Form 26AS, you must contact your employer to get it corrected before filing. The information in Form 26AS and AIS is what the department considers final, so your ITR must align with them.
Choose the Correct ITR Form
Selecting the wrong ITR form is a common mistake that can get your return marked as 'defective'. For most salaried individuals, the choice is between ITR-1 (Sahaj) and ITR-2. Use ITR-1 if your total income is up to ₹50 lakh from salary, one or two house properties, and other sources like interest. However, if you have any capital gains from selling stocks or mutual funds (beyond a small specified limit), income from more than two house properties, or foreign income, you must file ITR-2. Filing the wrong form can lead to rejection and delays.
Report All Your Income Sources
Your salary is just one part of your total income. Many taxpayers forget to report interest earned from savings bank accounts, fixed deposits, or recurring deposits. This income is captured in your AIS, and failing to declare it is a common cause for tax notices. Even if it’s a small amount, it must be reported. Similarly, if you switched jobs during the financial year, you must combine the income from all employers. Each employer deducts tax based on the salary they paid, but your total tax liability is based on your combined annual income, which might put you in a higher tax slab.
Double-Check All Deductions Claimed
While the old tax regime allows for deductions, you must claim them correctly. For House Rent Allowance (HRA), ensure you have rent receipts, especially if the annual rent exceeds ₹1 lakh, in which case the landlord's PAN is mandatory. You can claim HRA even if you pay rent to your parents, but the transaction must be genuine and documented. For Section 80D, you can claim deductions for health insurance premiums paid for yourself, your spouse, dependent children, and parents. Remember, premiums paid in cash (except for preventive health check-ups) are not eligible for deduction. Choosing the new tax regime means forgoing most of these popular deductions.
Verify Your Personal and Bank Information
This seems basic, but errors here are frequent and costly. Ensure your PAN, name, date of birth, and address match your official records. Most importantly, ensure the bank account where you want to receive your refund is pre-validated on the e-filing portal. An incorrect account number or an account that isn't pre-validated is a primary reason for refund failures, forcing you to raise a 'refund reissue' request later. A simple check can ensure your refund is credited without any hitches.
Don’t Forget the Final Step: E-Verification
Filing your ITR is not the end of the process. Your return is considered invalid if it is not verified within 30 days of filing. The easiest and instant method is e-verification through an Aadhaar OTP. Other methods include using an Electronic Verification Code (EVC) generated via your pre-validated bank or demat account, or through net banking. If you miss this crucial step, it's equivalent to not having filed your return at all, and you could face penalties for late filing.
