As the income tax return (ITR) filing season for the assessment year (AY) 2025–26 (financial year 2024–25) gains momentum, taxpayers must be cautious to avoid errors that can delay processing, trigger notices, or lead to return rejection. The Central Board of Direct Taxes (CBDT) has notified all ITR forms, incorporating updates from the Finance Act, such as relief for small long-term capital gains (LTCG), an increased threshold for foreign asset disclosure, and enhanced reporting for capital gains.

Key mistakes to avoid for a smooth ITR filing process:

1. Inaccurate Income Details Ensure your reported income aligns with Form 26AS, the Annual Information Statement (AIS), and the Taxpayer Information Summary (TIS). Discrepancies may result in scrutiny or notices from the tax department.

2. Choosing the Wrong ITR Form Select the appropriate ITR form based on your income sources. For instance, salaried individuals with income up to ₹50 lakh can use ITR-1, while those with business income or capital gains must opt for other forms.

3. Omitting Income Sources Report all income, including exempt sources like PPF interest or agricultural income, and rental income from additional properties. Failure to disclose these can lead to penalties.

4. Missing Interest and Dividend Income Declare interest from savings accounts, fixed deposits, and dividends, even if Tax Deducted at Source (TDS) has been applied. Non-disclosure is a common error that can attract scrutiny.

5. Incorrect Deduction Claims Claim only eligible deductions under sections like 80C, 80D, or 80G. Verify eligibility and maintain proper documentation to avoid rejection of claims.

6. Failing to Verify Your Return Post-submission, verify your ITR within 30 days, either electronically or by sending a signed ITR-V to the Central Processing Centre (CPC) in Bengaluru. Unverified returns are considered invalid.

7. Not Reporting Foreign Assets Resident taxpayers must disclose foreign assets, such as bank accounts or stocks held abroad. Non-compliance can lead to significant penalties under tax laws.

8. Overlooking Advance or Self-Assessment Tax Ensure all advance or self-assessment taxes paid are accurately reported to avoid miscalculated tax liabilities or reduced refunds.

By addressing these common pitfalls, you can streamline your ITR filing process and minimize the risk of errors. Stay informed, double-check details, and consult a tax professional if needed for a hassle-free experience.

#IncomeTax #ITRFiling #TaxTips #FinanceAct #AY202526