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 hefty penalty. It could also result in getting late refunds and unwelcome 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.
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 with total income up to INR 50 lakh can file ITR-1. From AY 2025-26, ITR-1 now also allows reporting of long-term capital gains (LTCG) under Section 112A up to INR 1.25 lakh from listed equity or equity mutual funds, provided there are no capital losses to carry forward.
If LTCG exceeds INR 1.25 lakh, or if there are any short-term capital gains, ITR-2 must be filed.
But if you are earning from a business or any kind of trading, you have to file the form ITR-3 or ITR-4.
From AY 2026-27, ITR-1 has been further expanded to allow income from up to two house properties, basically taxpayers with two properties who previously had to file ITR-2 can now use the simpler ITR-1, provided total income stays within INR 50 lakh.
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.
Due dates vary based on taxpayer category and may be extended by the CBDT. Taxpayers should always check the latest notified deadlines before filing.
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.
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:
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.
From FY 2025-26, the Income Tax Department tracks crypto transactions through TDS under Section 194S, AIS, and exchange-reported data, making accurate disclosure essential. Non-disclosure or incorrect reporting of VDA income can lead to a defective return, tax notices, or penalties for under-reporting of income. In severe cases, it may be treated as undisclosed income and taxed at higher rates under applicable provisions.
Note: The Finance Act 2025 has explicitly added ‘crypto-asset’ to the VDA definition, effective from AY 2026-27.
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:
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 > INR 1 Crore)
If your total income exceeds INR 1 crore in the financial year, you are required to fill Schedule AL. This schedule includes disclosure of assets such as property, vehicles, jewellery, shares, and related liabilities.
Earlier, this threshold was INR 50 lakh, but it has been increased to INR 1 crore in recent ITR updates, reducing the compliance burden for many taxpayers.
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.
18. Not Reconciling Form 26AS with Income & TDS
If you don’t cross-check your income and TDS claims with Form 26AS, you risk:
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:
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 two.
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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.
24. Claiming Ineligible Deductions or Exemptions
You cannot claim just any deduction; you must be eligible for it. For example, education loan deductions under Section 80E are only available for loans taken for higher education.
Claiming a deduction you are not eligible for can 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 point 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:
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:
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:
Don’t miss out on any deductions that you can legitimately claim in your ITR.
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:
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:
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:
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.
If ITR is filed wrongly, it may lead to notices from the Income Tax Department, delayed refunds, or penalties for misreporting.
Individuals with income below the basic exemption limit and no specified financial transactions are not required to file an ITR.
You can rectify an ITR only once under Section 154, but you can revise it multiple times before the assessment deadline.
Yes, you can modify a filed ITR by submitting a revised return before the due date or completion of assessment, whichever is earlier.
Yes, you can file your ITR yourself using the Income Tax e-filing portal or tax filing software without needing a Chartered Accountant.
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