Filing Income Tax Return? Avoid These Mistakes Or Risk Losing Rs 1.5 Lakh

As the deadline for income tax return (ITR) filing nears, financial experts are urging taxpayers to tread carefully. A single oversight could lead to penalties of up to Rs 1.5 lakh, delayed refunds, or worse—legal complications. Whether you're a salaried employee, freelancer, or business owner, filing correctly is crucial.

Here’s a breakdown of common mistakes taxpayers must avoid this year.

Choosing the Wrong ITR Form

One of the biggest errors is filing your return using the wrong ITR form. Each form caters to a specific income type:

• ITR-1 (Sahaj) – For salaried individuals earning up to Rs 50 lakh.
• ITR-2 – For those with capital gains, multiple properties, or foreign income.
• ITR-3 – For individuals running a business or practising a profession.
• ITR-4 (Sugam) – For those under presumptive taxation schemes.

Filing with the wrong form leads to a 'Defective Return', which must be corrected within 15 days or it may be declared invalid.

Ignoring Form 26AS and AIS

Before filing, it’s critical to cross-check the details in Form 26AS and the Annual Information Statement (AIS). These documents reflect your TDS, interest income, and high-value transactions. Missing or mismatched entries can lead to:

• Refund delays
• Additional tax payments
• Tax department notices

Salaried individuals must also collect Form 16 and include other income sources like dividends, capital gains, and home loan deductions.

Not Completing E-Verification

Your tax return is not considered filed until it's verified. You must e-verify within 30 days using:

• Aadhaar OTP
• Net banking
• Demat account
• Or by physically sending a signed ITR-V to CPC Bengaluru

Failure to verify on time means the return is invalid, and you might face penalties or loss of refund eligibility.

Late Filing Penalties

Missing the deadline doesn’t just cause stress—it hits your wallet:

• Rs 5,000 penalty for income above Rs 5 lakh
• Rs 1,000 penalty for income below Rs 5 lakh

This is in addition to interest charges on unpaid taxes.

❌ Misreporting Income or Deductions

Providing inaccurate information can have serious consequences:

• 50% penalty on the tax amount for underreporting
• Up to 200% penalty for wilful misreporting

Ensure all sources of income, including freelance gigs, rent, and bank interest, are declared.

Penalties for Businesses

Businesses and professionals who fail to:

• Maintain proper books
• Submit audit reports
• File returns on time

…may be penalised up to Rs 1.5 lakh, as per the Income Tax Act.

Expert Tip: File Early and Carefully

To avoid last-minute stress and costly errors:

• File early and double-check your details
• Verify the correct ITR form and regime (old or new)
• Reconcile TDS with Form 26AS and AIS
• Keep all supporting documents handy

The Income Tax Department has become increasingly stringent with compliance and digital tracking. Filing an incorrect or delayed return can trigger audits, penalties, and a damaged financial record. Avoid these common mistakes and file your ITR on time to save money and maintain peace of mind.