🧾 Module 8: Common Mistakes to Avoid While Filing Income Tax
Filing your Income Tax Return (ITR) is more than just a deadline-based task. A small error can lead to delayed refunds, tax notices, or penalties. In this final module of our “Income Tax for Beginners” series, we’ll explore the most common mistakes people make while filing income tax and how you can avoid them for a stress-free experience.
❌ Mistake 1: Selecting the Wrong ITR Form
🔹 Why It Matters:
Choosing the incorrect ITR form can result in defective return notices under Section 139(9), and you may have to refile your return.
🔹 Common Examples:
- Salaried person with capital gains files ITR-1 instead of ITR-2
- Freelancers choosing ITR-1 instead of ITR-3
✅ Solution:
Understand your income sources and refer to the ITR Form Guide provided on incometax.gov.in.
❌ Mistake 2: Not Reporting All Income
🔹 Why It Matters:
Hiding or forgetting to report income may lead to scrutiny notices or penalties.
🔹 Commonly Missed Incomes:
- Interest from savings or fixed deposits
- Dividend income
- Capital gains from shares/mutual funds
- Income from freelance work or part-time gigs
✅ Solution:
Always cross-check your income with:
- Form 26AS
- Annual Information Statement (AIS)
- Form 16 & Form 16A
❌ Mistake 3: Not Verifying the ITR
🔹 Why It Matters:
An unverified ITR is considered invalid. Your return is not processed unless you verify it.
✅ How to Verify:
You can verify your return through:
- Aadhaar OTP
- Net banking
- Demat account
- Sending signed ITR-V by post to CPC, Bengaluru
Tip: E-verification is quick and the most recommended method.
❌ Mistake 4: Ignoring Advance Tax or Self-Assessment Tax
🔹 Why It Matters:
If your tax liability exceeds ₹10,000 in a year, you're required to pay Advance Tax. Missing it leads to interest under Sections 234B and 234C.
✅ Who Needs to Pay Advance Tax?
- Freelancers
- Professionals
- Individuals with rental income or capital gains
- Business owners
- Salaried individuals with no other income don’t usually need to pay advance tax.
❌ Mistake 5: Not Matching Form 26AS and Form 16
🔹 Why It Matters:
Mismatch in TDS as per Form 16 and what's available in Form 26AS or AIS may lead to:
- Lower refund
- Higher demand notices
✅ Solution:
Match your TDS, advance tax, and income details with:
- Form 26AS
- AIS (Annual Information Statement)
- Report discrepancies to the deductor before filing
🧾 Summary Table
| Mistake | Impact | Solution |
|---|---|---|
| Wrong ITR Form | Defective Return Notice | Choose correct ITR form |
| Not reporting all income | Notices, penalties | Cross-check with AIS & 26AS |
| Missing ITR verification | Return not processed | Use e-verification |
| Ignoring advance/self-assessment tax | Interest liability | Pay before due dates |
| Not matching Form 26AS & 16 | TDS mismatch, refund issues | Match and rectify before filing |
🛡️ Bonus Tips to Avoid Mistakes
- File before the due date (usually 31st July)
- Double-check bank details for refund
- Keep your PAN linked with Aadhaar
- Always keep a copy of your return and acknowledgment
Conclusion
Avoiding these common mistakes can save you from unnecessary notices, penalties, or delays in refunds. As a beginner, make it a habit to verify data, choose the right ITR, and file with confidence. Income tax compliance is not just about ticking a checkbox – it’s about protecting your financial future.
