As employees have now received Form 16, they can now file income tax returns (ITR) for assessment year 2024-24 (or financial year 2023-24). However, if you are filing your ITR, there are some common mistakes that you need to avoid to successfully file your income tax return. Filing your ITR accurately and on time is crucial to ensure compliance and avoid unnecessary issues with the tax authorities. Below are some common mistakes that you should avoid while filing your ITR for the year 2025.
1. Incorrect personal information
One of the most common mistakes is entering incorrect personal information such as name, address, PAN and bank details. Make sure the details match those in your official documents and bank records to avoid discrepancies that could delay processing or refunds.
Double-check all personal information before submitting your ITR. Please ensure that your name, PAN and bank details are correct and up to date.
2. Choosing the wrong ITR form
There are different ITR forms for different types of taxpayers and sources of income. Using an incorrect form may result in rejections or delays in processing.
RTI-1 (Sahaj) for salaried persons with income up to Rs 50 lakh.
RTI-2 for individuals and HUFs who do not have income from business or profession.
RTI-3 for individuals and HUFs who have income from a business or profession.
RTI-4 (Sugam) for presumptive income from business and profession.
3. Not reporting all sources of income
Many taxpayers forget to report additional sources of income, such as interest from savings accounts, fixed deposits, rental income or capital gains. Skipping them can result in penalties and interest on unpaid taxes.
Gather all financial documents and income statements, including interest, dividends, and rental income, to ensure all sources are reported.
4. Not claiming eligible deductions
Taxpayers are often unable to claim deductions under various sections like 80C, 80D, 80E, etc., which can significantly reduce their taxable income.
Know all the deductions available under the Income Tax Act and claim them appropriately. Common deductions include investments in PPF, NSC, insurance premiums, home loan interest and tuition fees.
5. Errors in TDS details
Discrepancy between the TDS (tax deducted at source) details in your Form 26AS and the TDS claimed in your ITR may lead to discrepancies and delays in processing. Also, if a PAN is not linked with Aadhaar, TDS has to be deducted at double the applicable rate.
Check your TDS details in Form 26AS and make sure they match with the details you enter in your ITR.
6. Lack of ITR verification
After filing the RTI, it is essential to verify it either electronically or by sending a signed physical copy to the Centralized Processing Center (CPC) within 120 days. Unverified RTIs are considered invalid.
Prefer e-verification using Aadhaar OTP, net banking or other available methods for quick processing.
7. Ignore income from previous employer
If you changed jobs during the financial year, make sure you also include income from your previous employer. Ignoring this may result in a notice from the tax department for underreporting income.
Collect Form 16 from all employers and report the aggregate income in your ITR.
8. Incorrect bank account details
Providing incorrect bank account details may delay your refund. Ensure the account number and IFSC code are accurate and up to date.
Update your bank account details in the ITR form and verify them carefully before submitting.
9. Lose foreign income
If you have income from a foreign source, you will have to declare it in your ITR. Failure to do so can lead to penalties and legal issues, especially for NRIs or those with investments abroad.
Include all foreign income and assets in your ITR and seek professional advice if necessary.
10. Delay in filing the ITR
Filing your ITR after the due date may incur late filing charges, interest on the tax due, and reduced time to review the return if necessary.
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Try to file your ITR well before the due date to avoid last minute rush and possible mistakes.
Filing your ITR accurately and timely is essential to ensure smooth processing and avoid penalties. By being aware of these common mistakes and taking steps to avoid them, you can ensure that your 2025 tax filing process is smooth. When in doubt, consider seeking help from a tax professional to navigate the complexities of filing taxes.
first published: June 17, 2024, 15:34 IST
