Avoid These Common Mistakes When Filing Your ITR

As the deadline of July 31 approaches for submitting Income Tax Returns (ITRs) for Assessment Year 2026-27, many taxpayers are hurrying to finalize their filings. The introduction of pre-filled return forms has certainly simplified the process compared to previous years, but it is crucial for individuals to carefully review their submissions. Rushing through the filing can lead to various complications, including processing delays, unexpected tax liabilities, diminished refunds, or even official notices from the Income Tax Department. To mitigate these risks, the department has consistently urged taxpayers to cross-check the information found in Form 26AS, the Annual Information Statement (AIS), and the Taxpayer Information Summary (TIS) prior to finalizing their returns.

One prevalent mistake among salaried individuals is the over-reliance on Form 16. While this document provides a summary of salary details from employers, it does not encompass all potential sources of taxable income. Taxpayers must also report earnings from savings account interest, fixed deposits, rental income, dividends, freelance work, and capital gains from investments in stocks or mutual funds. Neglecting to include these additional income streams can lead to discrepancies when the Income Tax Department reconciles the submitted return with its own records. Furthermore, overlooking the information presented in AIS, TIS, and Form 26AS can result in significant issues. These documents contain financial data submitted by various entities, including employers, banks, and financial institutions. Any inconsistencies between these records and the income declared in the ITR can prompt further tax assessments or scrutiny during the processing phase.

Another frequent error is selecting the incorrect ITR form. Each form is tailored for specific categories of taxpayers and income types. For instance, individuals with capital gains, foreign assets, or multiple property incomes may not be eligible to file ITR-1. Choosing the wrong form can render the return defective and delay processing. Additionally, taxpayers must verify their deductions before claiming them. Incorrect claims can lead to increased scrutiny from tax authorities. It is essential to confirm eligibility for deductions under Sections 80C, 80D, and others before making claims. Similarly, capital gains from the sale of shares, mutual funds, or property must be reported accurately. Omitting these transactions or claiming deductions without meeting eligibility criteria can result in future tax liabilities. Lastly, many taxpayers mistakenly assume that the filing process concludes once they hit the submit button. In fact, an ITR is not considered fully filed until it has been e-verified within the designated timeframe. An unverified return is deemed invalid, as if it was never submitted at all. If errors are identified before e-verification, taxpayers can discard the unverified return and submit a new one, provided they adhere to the relevant deadlines.