Filing Income Tax Returns (ITR) is one of the most important financial tasks for individuals and businesses in India. With the Income Tax Department updating systems and compliance norms every year, even a small mistake can lead to processing delays, tax notices, penalties, or missed refunds. As the ITR filing season for Assessment Year (AY) 2025–26 gains pace, taxpayers must be cautious to avoid common errors — both technical and financial.
In this article, we highlight the most common mistakes taxpayers make while filing their ITRs in 2025, how to avoid them, and what the Income Tax Department expects from compliant taxpayers this year.
1. Missing the Correct ITR Form
Every taxpayer category has a specific ITR form. Using the wrong one can make your return defective under Section 139(9).
For AY 2025–26, individuals may need to file ITR-1 (Sahaj), ITR-2, ITR-3, or ITR-4, depending on salary, business income, capital gains, or other sources.
How to avoid it:
- Review your income sources (salary, interest, capital gains, house property, business, foreign assets).
- Check the updated ITR forms on the Income Tax e-filing portal before submission.
2. Incorrect or Unlinked PAN and Aadhaar
PAN and Aadhaar linkage is mandatory. If details don’t match, tax credits may not reflect, and your return may get rejected.
How to avoid it:
- Verify that your PAN is linked to Aadhaar.
- Ensure names, dates of birth, and gender match official documents.
3. Not Reporting All Income Sources
Many taxpayers forget to include interest income, freelance income, or capital gains from mutual funds, shares, or property sales. Even foreign income and overseas assets must be disclosed if applicable.
How to avoid it:
- Collect all Form 16, Form 26AS, and Annual Information Statement (AIS) data.
- Report even tax-exempt income (like PPF interest or dividends below the threshold) to avoid mismatches.
4. Ignoring Advance Tax or Self-Assessment Tax Liability
If your tax liability exceeds ₹10,000 in a financial year, advance tax must be paid in installments. Many salaried individuals with additional income (like rent or capital gains) forget this, resulting in interest under Sections 234B and 234C.
How to avoid it:
- Compute your total tax liability, including all sources.
- Pay advance tax before due dates.
5. Claiming Wrong Deductions or Exemptions
Incorrect claims under Sections 80C, 80D, 80G, HRA, or LTA can invite scrutiny or demand notices.
How to avoid it:
- Cross-check every deduction with valid proof.
- Only claim exemptions supported by actual investments, premium receipts, or donation certificates.
6. Errors in Bank Account Details
Refunds get delayed when taxpayers enter incorrect bank account details or fail to pre-validate the account.
How to avoid it:
- Update bank account details on the Income Tax portal.
- Ensure your account is active, under your PAN, and pre-validated for refund processing.
7. Not Verifying ITR After Filing
Filing is incomplete unless the return is e-verified. If not verified within the prescribed time (generally 30 days), the return is treated as not filed.
How to avoid it:
- Use Aadhaar OTP, net banking, or bank account-based EVC to verify instantly.
- Alternatively, send a signed ITR-V to CPC Bengaluru within the deadline.
8. Overlooking Technical Filing Errors
Some taxpayers face portal rejections due to:
- Uploading the wrong XML/JSON file.
- Using outdated offline utilities.
- Signature mismatch in cases of DSC usage.
How to avoid it:
- Use the latest version of the Income Tax e-filing utilities.
- Double-check uploaded files and signature requirements.
9. Not Reviewing Form 26AS and AIS Carefully
Form 26AS and AIS now provide detailed tax payment and income data, including interest, dividends, and securities transactions. Mismatch between your return and AIS data may trigger a compliance query.
How to avoid it:
- Download both documents before filing.
- Correct any mismatch by contacting deductors or making a disclosure in the ITR.
10. Missing the Due Date
Late filing results in penalties under Section 234F (₹1,000 to ₹5,000) and interest on unpaid tax. It can also prevent you from carrying forward certain losses.
How to avoid it:
- Plan early — don’t wait till the last day.
- Track any government announcements regarding due date extensions.
Final Thoughts
Filing your ITR accurately is not just about avoiding penalties — it ensures faster refunds, peace of mind, and a clean tax record, which is critical for financial planning, loan approvals, and visa applications. In 2025, with increased digitization and data matching by the Income Tax Department, transparency and accuracy are more important than ever.