Below are some of the most frequent errors taxpayers make during ITR filing:

1. Choosing the Wrong ITR Form

Selecting an incorrect ITR form based on your income sources can result in the return being marked as “defective” or invalid. Each ITR form applies to specific income categories, so choosing the right one is essential. Professional guidance can help ensure correct form selection.

2. Incorrect Personal or Contact Details

Errors in PAN, Aadhaar number, address, email ID, mobile number, or bank details can delay refunds or cause important notices to go undelivered. The Income Tax Department sends all communications to the details mentioned in the latest ITR, making accuracy critical.

3. Not Reporting Interest Income

Interest earned from savings accounts, fixed deposits, recurring deposits, and other instruments must be reported under “Income from Other Sources.”

• Savings account interest above ₹10,000 is taxable (deduction under Section 80TTA for non-senior citizens).

• Senior and super senior citizens can claim deductions up to ₹50,000 under Section 80TTB.
  Fixed deposit interest must be reported annually, even if the FD has not matured.

4. Ignoring Income from Multiple Employers

If you switched jobs during the financial year, income from all employers must be disclosed. Failure to do so can create mismatches between Form 16 and Form 26AS.

5. Not Reconciling with Form 26AS

Form 26AS reflects TDS, TCS, advance tax, and self-assessment tax payments. Any mismatch between Form 26AS and the income reported in your ITR can trigger notices or reduce refunds.

6. Not Reviewing Bank Statements

Bank statements often reveal interest income, gifts received, or other credits that must be reported. Since all active bank accounts must be disclosed, overlooking this step can lead to discrepancies.

7. Not Declaring Tax-Exempt Income

Even tax-exempt income (such as PPF interest or certain allowances) must be disclosed in the ITR, especially when total income exceeds the basic exemption limit.

8. Ignoring Interest on Income Tax Refunds

Interest received on tax refunds is taxable and must be reported as income from other sources, as reflected in Form 26AS.

9. Failure to E-Verify the Return

Merely submitting the ITR is not sufficient. The return must be e-verified within 30 days, either online (Aadhaar OTP, EVC) or offline by sending ITR-V to CPC Bengaluru. Failure to do so makes the return invalid.

10. Not Aggregating Certain Incomes

Income of a minor child or spouse may need to be clubbed with the taxpayer’s income as per income tax provisions, subject to applicable exemptions.

11. Late Filing of ITR

Filing after the due date can lead to penalties, interest, delayed refunds, and loss of the ability to carry forward losses.

12. Not Retaining Proof of Deductions

Claims under Chapter VIA (Sections 80C, 80D, etc.) must be supported with valid documentation. Lack of proof can lead to disallowance during assessment.

13. Overlooking Tax Rules for Multiple Properties

Taxpayers can treat only two properties as self-occupied. Additional properties are deemed let-out and taxed on notional rental income, even if vacant.

14. Not Disclosing Foreign Assets

Holding foreign bank accounts or assets mandates ITR filing, even if income is below the taxable limit. In such cases, ITR-2 must be filed.

15. Inadequate Advance or Self-Assessment Tax Payment

Shortfall in tax payment due to insufficient TDS must be paid as advance tax or self-assessment tax and correctly reported in the return.

16. Ignoring Capital Gains from Mutual Fund Switching

Switching mutual fund schemes is treated as a taxable event and must be reported, even if no money is credited to the bank account.

17. Submitting Incorrect or False Claims

Submitting fabricated documents or false claims for deductions or exemptions can attract severe penalties and scrutiny.

18. PAN Not Linked with Bank Accounts

PAN must be linked with bank accounts to ensure seamless refund processing.

19. Missing Mandatory Forms

Certain benefits, such as relief under Section 89(1), require prior submission of specific forms (e.g., Form 10E). Skipping these can result in denial of benefits.

20. Incorrect Residential Status

Wrongly determining residential status can significantly impact tax liability, especially for global income.

21. Incorrect Deduction Claims

Not all deductions or donations qualify for 100% exemption. Misunderstanding eligibility rules can lead to errors and notices.

Choosing Between Old and New Tax Regime

Selecting the appropriate tax regime is a critical decision:

Old Tax Regime

• Allows multiple deductions and exemptions (Sections 80C, 80D, HRA, etc.)

• Progressive tax slabs suitable for taxpayers with significant deductions

New Tax Regime

• Lower tax rates with simplified slabs

• Most deductions and exemptions are not allowed

The right choice depends on your income structure and eligible deductions.