Filing your Income Tax Return incorrectly can result in receiving a tax notice, losing a legitimate refund, or paying more tax than necessary. Here are seven mistakes that thousands of taxpayers make every year-and how to avoid them.
1. Choosing the Wrong ITR Form
Using ITR-1 when you have capital gains, two employers, or freelance income is invalid. ITR-1 is only for simple salary + one house property + interest income up to \u20b950,000. Verify the correct form before filing.
2. Not Reporting All Income
FD interest, savings account interest, rental income from a second property, and freelance income must all be declared-even if TDS was already deducted. The income tax portal\u2019s AIS (Annual Information Statement) now shows all such income reported by banks and other institutions.
3. Not Verifying Form 26AS Before Filing
Form 26AS and AIS show all TDS credits against your PAN. If they don\u2019t match your Form 16 or bank TDS certificates, file a correction request with your employer or bank before submitting the ITR.
4. Missing Deductions Not Declared to Employer
Deductions like education loan interest (80E), donations (80G), or health insurance premium for parents (80D) that were not declared to the employer can still be claimed in your ITR directly.
5. Not Declaring Previous Employer\u2019s Income
If you changed jobs during the year, both salaries must be included in the ITR. Many people forget the first employer\u2019s income, leading to underpayment of tax and subsequent notices.
6. Filing Without e-Verifying
An ITR is not complete until it is e-verified (via Aadhaar OTP, net banking, or bank account validation) within 30 days of filing. Unverified ITRs are treated as if not filed.
7. Missing the Deadline
Late filing attracts \u20b95,000 penalty (\u20b91,000 for income below \u20b95 lakh) and forfeits the ability to carry forward most capital losses. File before July 31 for FY 2024-25.
Use the SaveTaxNow Calculator to accurately compute your tax before filing to ensure no nasty surprises.