The deadline to file income tax returns for the financial year 2024 to 2025 is fast approaching. The government has already extended the date from July 31 to September 15, giving taxpayers more time to complete the process. However, it is important not to wait until the last moment. Filing in a hurry often leads to errors that could create bigger problems later, including refund delays or even scrutiny from the Income Tax Department. With the department now relying heavily on artificial intelligence and automated systems to flag mismatches, every taxpayer needs to be careful while submitting their return.
The filing utilities for ITR 1 to ITR 4 have already been rolled out, which cover a majority of individual taxpayers in India. Salaried professionals, pensioners, small business owners, and individuals with simple financial profiles usually fall under these forms. Yet even with simplified utilities and a more user friendly portal, mistakes are still common. Understanding what to avoid can save time and stress.
One of the most frequent issues is the wrong use of deductions. Some taxpayers are tempted to inflate claims under sections such as 80C, 80G or 80U to reduce taxable income. However, the Annual Information Statement captures most financial activities and the department’s AI tools quickly match deduction claims with actual transactions. Exaggerated or false deductions can easily lead to notices and penalties. It is always better to stay accurate rather than risk future consequences.
Another common mistake is depending solely on Form 16. While this form provides a summary of salary income and tax deducted at source, it does not reflect other income such as savings account interest, dividends, or capital gains from mutual funds and shares. These details are available in the AIS and must be included. Ignoring them may cause a mismatch which eventually results in compliance questions from the department.
For individuals who have worked with more than one employer in the same year, consolidating income across all Form 16s is crucial. Many professionals forget to include details from their earlier employment, assuming the latest Form 16 is sufficient. Since the AIS automatically reflects all reported income, leaving out any source creates discrepancies and often invites notices.
Foreign asset disclosure is another area where mistakes are frequent. Indians returning from overseas sometimes fail to declare dormant foreign accounts, overseas stock options, or pension holdings. Even though penalties have been relaxed for non reporting of smaller assets, disclosure remains mandatory. Transparency is always the safer choice to avoid complications later.
Choosing the correct ITR form is equally important. For instance, ITR 1 is meant only for individuals with income from salary or pensions up to fifty lakh rupees and without any foreign assets or large capital gains. Using ITR 1 when capital gains or overseas accounts are involved can make a return defective and create suspicion of concealment. In such cases, taxpayers should file ITR 2. Filing under the wrong form is one of the most common yet avoidable errors.
Before submitting, reconciling records is another essential step. Taxpayers should carefully check Form 16, Form 26AS, and AIS to ensure that TDS, interest income, and property transaction details all match. Filing without correcting discrepancies often leads to refund delays or adjustments by the department. Simple cross checking before submission can prevent such issues.
Finally, accurate personal details and verification are critical. Refunds are credited only to pre validated bank accounts, so even a small error in account number or IFSC code can block payouts. Similarly, an incorrect PAN or email address may delay communication. Filing alone is not enough. The return must be e verified through Aadhaar OTP, net banking, or other approved methods for it to be treated as complete.
The tax season does not need to be stressful if returns are filed carefully and well in time. Avoiding these mistakes ensures a smoother process, faster refunds, and fewer compliance issues. With the deadline closing in, taxpayers should prioritize accuracy over speed and make use of available tools like the AIS and online calculators to stay on track.
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