Top 10 ITR Filing Mistakes People Make During Tax Season

You might think filing an Income Tax Return (ITR) is a simple process using any popular digital platform. But any small error in the form could lead to a big digit of fine. It could also result in getting late refunds and welcome income tax notices.

The Income Tax Department keeps a check on every little detail and verifies everything received via Form 26AS, AIS, TIS, and other disclosures.

So, whether you are an individual or a business owner, you cannot take risks while filing ITR. You must be aware of the common ITR filing mistakes before you file it.

In this blog, we have discussed 30 common mistakes while filing ITR that you could avoid. Let’s begin.

Pre-Filing & Identification Mistakes

1. Filing Using the Incorrect ITR Form

What if you chose the wrong ITR form? It could render your return defective. And then, you have to pay penalties.

Make sure you choose the correct ITR form, as it is the most common ITR filing mistake people make. Salaried individuals who come under the income of INR 50 lakh per annum with no capital gains have to file the form ITR-1. Individuals exceeding an income of INR 50 lakh have to file ITR-2.

But if you are earning from a business or any kind of trading, you have to file the form ITR-3 or ITR-4.

2. Quoting the Wrong Assessment Year

Always be aware of the difference between the Financial Year (FY) and the Assessment Year (AY).

Quote the right assessment year in the form. For example, for the financial year 2024-25, the right assessment year is 2025-26. If you mistakenly use the wrong AY, this ITR filing mistake could lead to double taxation.

3. Furnishing Incorrect Personal or Contact Details

This is another one of the common ITR filing mistakes. Don’t add wrong details as these are not just formalities.

Everything from your PAN, Aadhaar number, address, DOB, email, and mobile number should be correctly entered in the form.

Apart from this, your bank details must also be correct. If anything is found wrong, your refund will be delayed.

4. Filing Incomplete or Incorrect Bank Account Details

No wrong digits are allowed in your account number or IFSC code.

You can see your refund status as failed or untraceable if any incorrect details are entered.

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5. Incorrect Determination of Residential Status

You need to correctly determine your residential status using the 60/182-day rule. Taxes are defined on the basis if you are a resident of India or not. Misreporting this can lead to both overpayment and compliance issues.

6. Not Linking PAN with Aadhaar

As everyone is nowadays aware that your PAN needs to be linked with your Aadhaar for any official work. Before filing ITR, make sure that it is as stated.

7. Failure to Submit Required Forms (e.g., Form 10E, Form 67)

If you want to claim relief under Section 89(1), you have to submit Form 10E before filing your ITR. On the other hand, for foreign tax relief, you need to submit Form 67.

8. Entering Details in the Wrong Format

Don’t forget that the dates, names, and numerical inputs have a defined format. Although the portal won’t accept wrong formats, you must keep this point in mind while filing ITR.

Income Disclosure Errors

9. Not Reporting All Income Sources

This is another major ITR filing mistake. Many taxpayers forget to disclose income from secondary sources, assuming that if no tax was deducted, it’s not required. All income must be disclosed, including:

• Savings and FD interest
• Rental income
• Capital gains
• Freelance/side gigs
• Tax-exempt income like PPF or long-term capital gains up to ₹1 lakh

Even if exempt, these must be reported under the appropriate schedule.

10. Failure to Disclose Crypto/VDA Income under Schedule VDA

From AY 2023–24 onwards, income from Virtual Digital Assets (VDAs) like cryptocurrencies must be declared under Schedule VDA. This includes profits from buying, selling, or transferring crypto. Tax is charged at a flat 30% without deductions. Not disclosing this income can lead to notices or audits.

11. Not Reporting Capital Gains on Mutual Fund Switches or Sales

Switching between mutual fund schemes is treated as a taxable transfer, even though the money stays invested. This often goes unreported because it doesn’t reflect in bank statements. Use your CAMS/Karvy statements or capital gain reports to check for such transactions.

12. Missing Income from Multiple Employers (Form 16s)

Changed jobs in the year? You’ll have multiple Form 16s. Simply using the latest one without adding income from your previous employer can result in under-reporting. You must consolidate salary income from all employers, even if you didn’t get Form 16 from one of them.

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13. Ignoring Foreign Income or Assets (Schedule FA)

Resident and ordinarily resident (ROR) taxpayers must report all foreign income, accounts, and assets, including:

• Foreign bank accounts
• Shares in overseas companies
• Foreign mutual funds or ESOPs

This must be declared under Schedule FA, regardless of whether it’s taxable in India or not.

14. Failure to Disclose Schedule AL (If Income > ₹50 lakh)

If your total income is more than INR 50 per annum, you have to fill Schedule AL, i.e., for assets and liabilities.

It includes disclosure of residential property, vehicles, jewellery, shares, and their associated liabilities. Non-disclosure is considered non-compliance and could lead to scrutiny.

15. Not Clubbing Income of Minor or Spouse

According to tax rules, income earned by a minor child (e.g., FD interest in their name) or by a spouse without adequate contribution must be clubbed with the taxpayer’s income. Ignoring this can result in under-reporting and interest liabilities.

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16. Not Reporting Interest on Tax Refunds

Did you receive a refund from the IT department? Check Form 26AS if there’s any interest credited with your refund that needs to be reported under Income from Other Sources. It’s taxable as per your slab and is often missed.

17. Assuming NSC Interest Is Fully Tax-Free

Interest on National Savings Certificates (NSC) is taxable each year, but you can claim it as a deduction under Section 80C. However, you cannot claim it in the final year as it is not eligible for a deduction claim.

If you forget to report this income, you cannot claim any deduction and have to pay back taxes later.

TDS, Reconciliation & Tax Payment Mistakes

18. Not Reconciling Form 26AS with Income & TDS

If you don’t cross-check your income and TDS claims with Form 26AS, you risk:

• Claiming TDS was not actually deposited
• Getting a lower refund
• Receiving an intimation notice under Section 143(1)

Always verify your Form 26AS before filing to ensure you get the correct tax credit. Many taxpayers now use income tax software that automatically fetches Form 26AS data and matches it with their return entries.

19. Failure to Match Data with AIS and TIS

The Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) are now crucial to your ITR. They include:

• Bank interest
• Security transactions
• Mutual fund investments
• Credit card spends
• Foreign remittances

AIS shows the detailed transaction-level data, while TIS summarizes it. If the derived values in TIS differ from your actual income, provide feedback before filing. Ignoring this can lead to mismatches, scrutiny, and delayed processing.

20. Not Comparing Form 16 with Form 26AS

Salaried individuals have to match the tax details mentioned by the employer with what is actually deposited with the Income Tax Department.

It is important to reconcile Form 16 with the Form 26AS to avoid any discrepancies between the.

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21. Ignoring TDS on Capital Gains, F&O or FD Interest

Many investment incomes, especially FDs and capital gains, may have TDS deducted at source. If you don’t declare these incomes and only claim the TDS, it may trigger an audit.

Also, for F&O traders, tax must be paid on net profits even if TDS isn’t deducted by the broker. Declare all such income to stay compliant.

22. Not Paying Advance Tax or Self-Assessment Tax When Due

If your total tax liability for the year goes beyond INR 10,000 after adjusting for TDS, you have to pay advance tax in four installments. If you ignore it, you have to pay interest under Section 234B and 234C.

Similarly, any tax due at the time of filing must be paid as self-assessment tax before submitting the return. Filing without paying it in full makes your return defective.

23. Not Claiming Credit for TDS Appearing in 26AS

Check all TDS entries in Form 26AS, even from past employers or small income sources, and claim them correctly.

Deduction & Exemption Mistakes

24. Claiming Ineligible Deductions or Exemptions

You cannot claim any deduction mentioned. For example, education loan deductions under Section 80E are only for ones who opt for higher education.

If you claim a deduction that’s not for you could lead to disallowance and increased tax liability during scrutiny.

25. Submitting Fake Invoices or Rent Receipts for Deductions

Don’t ever try to create any fake donation receipts or rent receipts! Getting caught could even lead you to pay up to 200% penalties of the tax evaded.

26. Not Claiming All Eligible Deductions (80D, 80G, 80TTB, etc.)

Unlike the pointer 24, sometimes people miss claiming the deductions they are eligible for. You can review your bank statements, insurance documents to identify any deductions you can claim for.

Examples include:

• Section 80TTB: Interest deduction for senior citizens (up to ₹50,000)
• Section 80G: Donations to approved charities
• Section 80E: Interest on education loans

If you find it difficult, you can always take help from a CA to do this for you.

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27. Not Having Proof for Claimed Deductions (80C, 80D, etc.)

In a world of so many frauds, you can’t expect the IT Department to let you claim deductions without any proof.

You have to keep digital or physical proof for:

• Life insurance premiums
• ELSS mutual fund investments
• PPF contributions
• Medical insurance
• Children’s tuition fees

You don’t need to upload them while filing, but you must retain them in case of future audits.

28. Claiming Deductions Under Inapplicable Tax Regime (Old/New Confusion)

Many deductions and exemptions are not allowed under the New Tax Regime. Keep an eye on the regime you’ve chosen and adjust your deductions accordingly.

29. Missing HRA Benefits Due to Not Submitting Rent Receipts or PAN of Landlord

Even if your employer didn’t consider your HRA claim during payroll, you can still claim it in your ITR. But you must:

• Calculate HRA exemption manually
• Submit rent receipts (digitally, if asked)
• Provide the landlord’s PAN if your rent is more than INR 1 lakh yearly

Don’t miss out on any deductions that you can easily claim through HR.

Post-Filing & Compliance Mistakes

30. Failure to E-Verify the ITR Within 30 Days

You have to e-verify your ITR within 30 days of submission, else it will be treated as invalid.

You can e-verify using:

• Aadhaar OTP
• Net banking
• Demat account
• Bank ATM (for select banks)

Bonus Mistake: Ignoring Notices or Intimations from the Income Tax Department

After filing, check for Section 143(1) intimations or notices. Ignoring tax department emails/SMS can lead to penalties.

Make it a habit to:

• Check your email and SMS regularly
• Log in to the income tax portal periodically
• Respond promptly to any notices to avoid legal trouble

Final Words

ITR filing is an easy job if done precisely with complete presence of mind. Whether you’re a salaried professional, freelancer, investor, or senior citizen, try to avoid the following common mistakes:

• Maximize your tax savings
• Prevent refund delays
• Stay compliant and stress-free

Don’t hesitate to consult a tax expert if it is required. Filing your ITR is not just a legal formality; it’s a financial hygiene check that safeguards your money and peace of mind.

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