Filing Income Tax Returns (ITR) could be a tricky process for some. If you are not vigilant, you could end up making some ITR filing errors which may lead to tax-related troubles later. One mistake in the declaration of income or deduction and you may end up with a notice from the Income Tax Department. 

 

ITR Filing could be especially tough if you have multiple sources of income and/or if you are a first-time filer. Knowing the ITR filing process and the mistakes to avoid can help you file your taxes correctly. 

Mistake 1: Not Using the Right ITR Filing Form

You need to identify the applicable form for you on the basis of your income and income sources in the financial year. If you use the wrong form for filing income tax returns, the return will be termed defective. This would mean double the effort on your part, as you will then have to file a revised return using the correct form.

 

The e-filing website for income tax returns mentions the specifications as given below:

ITR Form

Description

ITR 1

For resident individuals with income from pension, a house property, salary, and other sources of up to ₹50 Lakhs

ITR 2

For individuals and Hindu Undivided families (HUFs) whose total income for the assessment year does not include income from profession or a business  

ITR 3

For individuals and HUFs earning an income from business or profession

ITR 4

For resident individuals, HUFs, and firms (excluding LLPs) opting for presumptive taxation under sections 44AD, 44ADA, or 44AE of the Income Tax Act, 1961, with turnover up to ₹2 Crores or receipts up to ₹50 Lakhs

ITR 5

For partnership companies, Limited Liability Partnership (LLP), Association of Persons (AOP), etc.

ITR 6

For companies companies registered under the Companies Act, 2013, if the income earned is not from property held for charity and religious purposes 

ITR 7

For individuals and companies required to file returns under sections 139(4A), 139(4B), 139(4C), 139(4D), 139(4E), or 139(4F)

Mistake 2: Not Reporting Income from Investments

Another common mistake made by many taxpayers is omitting the income earned from investments. You need to report and account for all the income, including your earnings from investments. 

 

This consists of interest income from fixed deposits and capital gains arising from the sale of mutual funds or any other asset. Make sure you report these incomes under the ‘Income from Other Sources’ head. 

 

There are also certain deductions permitted. Section 80TTA provides a deduction of up to ₹10,000  on the interest earned from deposits at bank, post office, or a co-operative society. Senior citizens enjoy a deduction of up to ₹50,000 for the interest earned from FDs and savings accounts under Section 80TTB.

Mistake 3: Failure to Claim Deductions Not Shown in Form 16

Sometimes, an exemption may not be reflected in Form 16 if the proof of investment is submitted later. You are still entitled to claim those exemptions while filing the return, provided you have the supporting documents.

 

This includes deductions under Section 80C for investments in PPF, life insurance premiums paid, and others. You can also claim deductions for Housing Rent Allowance (HRA), home loan principal, and other eligible expenses.

Mistake 4: Failure to Reconcile with Form 26AS Before Filing ITR

Form 26AS reflects details of Tax Deducted at Source (TDS) from your income, payment of advance tax, self-assessment tax, and others. If you are a salaried professional, you must cross-check the details with Form 16, which is issued by your employer, with Form 26AS. 

 

If the TDS is not shown in your Form 26AS, you will not receive a credit for tax deductions that are not mentioned in the form.

Mistake 5: Not Reporting Income from the Last Job

It also happens that when you switch jobs during the financial year, you miss out on reporting the income from the previous job. If this income is not reported, then a discrepancy will be reflected in your TDS certificate (Form 16) and Form 26AS. 


The tax department may send a notice asking you to pay additional tax dues if any. It is always a good practice to verify this beforehand by obtaining the Form 16/16A from your employer or client.

Mistake 6: Not Reporting All Bank Accounts

While filing an ITR, you must report all the bank accounts you hold in India as well as in other countries. Remember, you even need to report the accounts that you had closed during the financial year. This helps the government identify any instances of money laundering.

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