ITR filing: Top mistakes to avoid when filing Income Tax returns

Filing Income Tax Returns (ITR) is a crucial responsibility for taxpayers in India. Ensuring accurate and timely submissions can prevent unnecessary hassles, penalties, and legal issues. Here are the top mistakes to avoid during the ITR filing process:

1. Missing the Deadline

One of the most common mistakes is missing the ITR filing deadline. The due date for individuals is usually July 31st. Delayed filing can attract penalties ranging from ₹1,000 to ₹10,000, depending on the delay's duration. Additionally, late filers may lose out on certain deductions and face higher scrutiny from the Income Tax Department.

2. Incorrect Personal Information

Errors in personal information such as name, PAN number, and bank details can lead to complications. These mistakes can result in rejected returns or delays in refund processing. Ensure all personal details are correctly entered to avoid such issues.

3. Choosing the Wrong ITR Form

Selecting the appropriate ITR form is vital. Different forms cater to different types of taxpayers based on their income sources. Using the wrong form can lead to rejection or the need for resubmission. For example, ITR-1 is for salaried individuals, while ITR-4 is for professionals and small businesses.

4. Not Reporting All Income Sources

Failing to report all income sources, including interest from savings accounts, fixed deposits, and rental income, is a common error. Non-disclosure of these incomes can attract penalties and scrutiny. Ensure comprehensive reporting of all income to maintain transparency.

5. Ignoring Form 26AS

Form 26AS contains details of all taxes deducted and deposited against your PAN. Many taxpayers overlook this form, leading to discrepancies between reported income and actual TDS. Reviewing Form 26AS before filing can help ensure accuracy and avoid mismatches.

6. Inaccurate Deductions and Exemptions

Incorrect claims on deductions and exemptions can result in reduced refunds or increased tax liabilities. Familiarize yourself with the deductions available under sections 80C, 80D, and others. Ensure that all claimed deductions are valid and supported by necessary documents.

7. Not Verifying the ITR

After filing, verifying the ITR is crucial to complete the process. Many taxpayers neglect this step, rendering their returns invalid. Verification can be done electronically through Aadhaar OTP, net banking, or by sending a signed physical copy to the CPC office.