Filing your Income Tax Return (ITR) is not just a formality — it’s a responsibility and an essential part of your financial planning. But even in 2025, many individuals and businesses across India continue to make simple yet costly errors while filing their ITRs. These mistakes can lead to delays in refunds, penalties, or even legal consequences.
Whether you are a salaried employee, freelancer, business owner, or earning income online, it’s crucial to file your returns correctly. In this article, we’ll explore the top 8 common mistakes made while filing income tax in India — and how you can avoid them with smart planning and expert help.
Entering Incorrect PAN or Aadhaar Number
One of the most basic yet frequent mistakes taxpayers make is incorrectly entering PAN or Aadhaar details.
🔍 Why This Is a Problem:
- PAN is your unique taxpayer ID; any mismatch results in ITR rejection.
- Incorrect Aadhaar may affect e-verification and cross-verification of identity.
📌 Real-Life Example:
Rohit, a software engineer, mistyped a digit in his PAN number. Though the ITR was filed successfully, it was never processed, and he had to wait months to correct it and refile.
✅ How to Avoid It:
- Always copy PAN and Aadhaar from the original documents.
- Use the auto-fetch feature on government portals where available.
- If your name differs between Aadhaar and PAN, get it corrected before filing.
Not Reporting All Sources of Income
Many individuals believe they only need to report their salary. But your income may include:
- Bank interest (even savings account interest over ₹10,000 is taxable)
- Fixed Deposit or Recurring Deposit interest
- Freelancing, consulting, or online income (YouTube, blogging, Fiverr, Upwork)
- Capital gains from mutual funds or shares
- Rental income or agricultural income
- Cryptocurrency profits (now taxable under separate rules)
📌 Real-Life Example:
Neha earned ₹70,000 through Instagram brand collaborations. She didn’t disclose it, thinking it’s minor. The Income Tax Department detected it via her AIS report and issued a notice.
✅ Solution:
Always download and review your Form 26AS and AIS (Annual Information Statement) from the income tax portal. Disclose all sources, even if the TDS is already deducted.
Ignoring Form 26AS and AIS Before Filing
Most errors in ITR come from not matching the declared income with Form 26AS and AIS data.
📌 What’s in These Forms?
- Form 26AS: Shows tax deducted (TDS), advance tax, and self-assessment tax paid.
- AIS: Contains detailed data about savings, investments, transactions, interest, etc.
✅ What to Do:
Before filing, download both reports and reconcile every source of income. This is especially crucial for:
Those with multiple accounts or investmentsorted income. Be honest — underreporting can attract scrutiny or penalties.
Business owners
Freelancers
Claiming Incorrect or Ineligible Deductions
Tax-saving is important, but many taxpayers either overclaim, underclaim, or select wrong deduction sections.
💡 Common Mistakes:
- Claiming LIC premium under 80D instead of 80C.
- Claiming rent deduction without rent agreement or proof.
- Claiming donations under 80G without valid receipt and approval number.
- Claiming medical insurance deductions for ineligible members.
✅ Solution:
- Understand the difference between 80C, 80D, 80G, 80E, 80TTA, etc.
- Keep proof of all deductions.
- Don’t rely blindly on past returns or suggestions from agents.
Blindly Trusting Agents or Filing Without Understanding
Using a tax professional is smart — but not understanding what’s being filed can backfire. The ultimate responsibility is yours, not your CA’s.
📌 Real Scenario:
A business owner blindly approved his CA’s filing, which didn’t disclose ₹4 lakhs in cash transactions. He received a notice with a demand for penalty and interest.
✅ Best Practice:
- Always review the computation sheet and final ITR before submitting.
- Ask your CA or agent to explain the details.
- Save a soft and hard copy of the final filed return for future reference.
🕒 Missing the Deadline for Filing Returns
Every year, lakhs of Indians rush to file their ITRs in the last week of July — many fail to complete it in time.
⚠️ Consequences:
- Late filing fees up to ₹5,000 under Section 234F.
- Loss of interest on eligible refunds.
- You may not be allowed to carry forward business or capital losses.
📌 Tip for Taxpayers:
Start preparing by June. If you’re expecting Form 16 or financial documents from employers or banks, remind them in advance. If you’re unsure, consult a professional early.For individual taxpayers (non-audit cases), the usual deadline is 31st July each year. If you miss it, you may have to:
- Pay a late fee (up to ₹5,000)
- Lose carry-forward of losses
- Face interest on tax dues
🔔 Tip:
Set a reminder in June to start preparing. Don’t wait till the last week of July when the portal slows down due to traffic.rted income. Be honest — underreporting can attract scrutiny o
Blindly Trusting Agents or Filing Without Understanding
Using a tax professional is smart — but not understanding what’s being filed can backfire. The ultimate responsibility is yours, not your CA’s.
📌 Real Scenario:
A business owner blindly approved his CA’s filing, which didn’t disclose ₹4 lakhs in cash transactions. He received a notice with a demand for penalty and interest.
✅ Best Practice:
- Always review the computation sheet and final ITR before submitting.
- Ask your CA or agent to explain the details.
- Save a soft and hard copy of the final filed return for future reference.
💡 Key Takeaways
| Mistake | Impact | Solution |
|---|---|---|
| Incorrect PAN/Aadhaar | ITR rejection, refund delay | Double-check entries |
| Missing deadline | Late fees, missed benefits | Start early |
| Income not reported | Tax notice, penalties | Review AIS & 26AS |
| ITR not verified | ITR invalid | Verify within 30 days |
| Wrong deductions | Penalty, re-assessment | Claim only with valid proof |
| No documents | Disallowed claims | Keep records for 6 years |
| Ignoring 26AS | Mismatch issues | Always match before filing |
| Blind trust in agents | Legal issues | Review everything filed |
🎯 Final Thoughts
Filing your ITR correctly not only protects you from legal complications but also builds your credibility for loans, visas, and financial planning. With increasing digitization, the income tax department cross-verifies your financial data — so mistakes are easily caught.
Taking a few extra minutes to cross-check your details can save you months of stress.
🚀 Need Help Filing Your Income Tax?
At INDTAX Filing, we help:
- Salaried professionals
- Freelancers and creators
- Shop owners and small businesses
- Partnership firms and LLPs
✅ 100% Accurate Filing
✅ Max Refund Guarantee
✅ Free Document Review
✅ Expert CA Support
📞 Call/WhatsApp us now at [954000696 , 8860691515]
🌐 Visit us at www.indtaxfiling.com
