Common Tax Filing Mistakes (and How to Avoid Them)

Filing income tax returns (ITR) is something every earning individual and business in India must do every year. It may seem like a boring or confusing task, but avoiding mistakes while filing your ITR is very important. A small error can lead to penalties, notices from the Income Tax Department, or delay in getting refunds.

In this blog, we’ll look at common tax filing mistakes made by people in India—and more importantly, how to avoid them.

 

1. Not Filing ITR on Time

 

 

The Mistake:

 

Many people either forget the deadline or wait till the last moment and miss filing their ITR.

 

Deadline:

 

For most individuals, the due date is 31st July of the assessment year.

 

Example:

 

Ravi, a salaried employee, kept delaying his ITR thinking he had plenty of time. He finally logged in on 31st July but the site was too slow and he missed the deadline. He ended up paying a ₹5,000 late fee.

 

How to Avoid:

 

• Set a calendar reminder a month before the due date.
   
• Try to file your return by June so you have time to fix errors, if any.
   

 

2. Choosing the Wrong ITR Form

 

 

The Mistake:

 

Filing using the wrong ITR form can lead to your return being marked as defective.

 

Example:

 

Anita is a freelance content writer. She used ITR-1 thinking it’s the simplest form. But because she had income from freelancing (business/profession), she should have used ITR-4. Her return was rejected.

 

How to Avoid:

 

• Read the ITR form descriptions carefully on the Income Tax Department website.
   
• Use the “Help Me Decide” tool available on the e-filing portal.
   
• If confused, consult a tax expert.
   

 

3. Not Reporting All Income Sources

 

The Mistake:

 

Many people think they only have to report their salary income. But interest from FD, rent, dividends, or freelance earnings also count.

 

Example:

 

Sanjay earned ₹5,00,000 from his job and ₹20,000 interest from FDs. He only declared his salary income. Later, he received a notice from the IT department about the missing income.

 

How to Avoid:

 

• Collect all your Form 16, Form 26AS, and AIS (Annual Information Statement) before filing.
   
• Report all income, even if it’s small or tax-free.
   

 

4. Not Verifying the ITR

 

 

The Mistake:

 

Filing the return but forgetting to verify it within 30 days is like not filing at all.

 

Example:

 

Neha filed her ITR online but didn’t e-verify it. After 2 months, she realised it was still marked as “unverified” and considered invalid.

 

How to Avoid:

 

• After filing, verify immediately using:
   
  • Aadhaar OTP
     
  • Net banking
     
  • Bank account EVC
     
  • Sending a signed ITR-V form to CPC Bengaluru (offline)
     

 

5. Mistakes in Personal Details

 

 

The Mistake:

 

Wrong PAN number, Aadhaar number, bank account details, or email ID can cause delays or problems.

 

Example:

 

Rohan entered the wrong IFSC code. His refund couldn’t be processed.

 

How to Avoid:

 

• Double-check your name, PAN, Aadhaar, bank account number, and IFSC code.
   
• Keep documents open while entering details.
   

 

6. Not Claiming All Deductions

 

 

The Mistake:

 

Many taxpayers forget to claim deductions under Section 80C, 80D, or 80TTA, etc.

 

Example:

 

Priya paid ₹30,000 as life insurance premium but forgot to claim it under Section 80C. She paid more tax than she had to.

 

How to Avoid:

 

• Make a list of tax-saving investments before filing.
   
• Common deductions include:
   
  • LIC/PPF/ELSS (80C)
     
  • Medical insurance (80D)
     
  • Education loan interest (80E)
     
  • Interest on savings (80TTA)
     

 

7. Using Old Tax Regime/Not Comparing Both Regimes

 

 

The Mistake:

 

Since FY 2020-21, India has two tax regimes – Old and New. Many people select one without comparing which is better for them.

 

Example:

 

Vikas had many deductions but chose the new regime (which doesn’t allow deductions). He ended up paying more tax.

 

How to Avoid:

 

• Use online tax calculators to compare both regimes.
   
• If you have many investments and deductions, the old regime is usually better.
   

 

8. Not Paying Advance Tax/Self-Assessment Tax

 

 

The Mistake:

 

If your tax liability exceeds ₹10,000 in a year, you must pay advance tax in installments. Many self-employed people ignore this.

 

Example:

 

Deepa, a freelance designer, earned ₹12 lakh but didn’t pay advance tax. She had to pay interest under Section 234B and 234C.

 

How to Avoid:

 

• Estimate your annual income early.
   
• Pay advance tax quarterly if needed.
   
• Use Form 26AS to track TDS already deducted.
   

 

9. Ignoring TDS Mismatches

 

 

The Mistake:

 

If the TDS shown in Form 16 doesn’t match Form 26AS or AIS, it can cause confusion and delay refunds.

 

Example:

 

Arjun’s employer deducted TDS but didn’t deposit it. Arjun claimed it in ITR, but the mismatch caused a notice.

 

How to Avoid:

 

• Always check Form 26AS and AIS before filing.
   
• Match it with your Form 16 or income documents.
   
• Ask the employer or deductor to correct it if there’s a mistake.
   

 

10. Not Keeping Proofs/Receipts

 

 

The Mistake:

 

Claiming deductions or exemptions without keeping proper proof.

 

Example:

 

Meena claimed ₹50,000 for medical expenses under 80DDB but didn’t have the doctor’s certificate. Her claim was rejected after scrutiny.

 

How to Avoid:

 

• Keep all receipts, premium payment documents, rent receipts, etc.
   
• You don’t need to upload them while filing, but keep them ready for future reference.
   

 

Bonus Tip: Use CA Help for Complex Returns

 

If you have income from business, foreign assets, stock trading, or house property in another city, it’s better to consult a Chartered Accountant (CA).

It may cost ₹1,000–₹2,000 but can save you trouble later.

 

Conclusion

 

Filing your taxes may not be exciting, but avoiding these common mistakes can save you from future headaches. Be organized, check your documents carefully, and don’t wait till the last moment. You can also use online platforms like the Income Tax Department e-filing portal, or private sites like ClearTax, TaxBuddy, etc., to simplify the process.

Remember: Filing your taxes correctly is not just a duty—it’s smart financial behaviour.

✅ Quick Checklist Before Filing ITR:

• Collect Form 16, 26AS, AIS
   
• Choose correct ITR form
   
• Declare all income
   
• Claim eligible deductions
   
• Verify ITR after filing
   
• Keep all proofs and receipts
   

If you still feel unsure, don’t hesitate to take help. A small investment in expert advice can protect you from big mistakes.

Happy Filing!