Summary:
Filing your ITR correctly is just as important as filing it on time. This guide covers 15 common mistakes taxpayers make for FY 2025–26 (AY 2026–27), from choosing the wrong ITR form to missing income, incorrect deductions, and failing to verify returns. Avoiding these errors can help prevent notices, refund delays, and penalties.
The same errors occur year after year during tax filing season — incorrect forms, underreporting of income, returns not verified. Nearly 100% of them can be prevented. Lets discuss the top 15 mistakes taxpayers make on their returns for FY 2025-26, and how to avoid them to avoid a notice, or a delayed refund.
Why Accuracy Matters
Any details you enter on your ITR will be compared by the department with information it already has on its records from banks, employers, brokers, mutual fund registrars, and others that submit information on income. It can be a delayed refund, to a formal notice if you get it wrong, even if it's a mistake.
Small errors no longer get through the cracks – thanks to the Annual Information Statement. All the transactions reported against your PAN — salary, interest, dividends, mutual fund redemptions, share sales, property deal, foreign remittance etc. are all collected into AIS. The gap is automatically flagged if the return is different from it. Just one omitted dividend is sufficient.
Generally, a mismatch will appear first as a notice under Section 143(1). Larger gaps will result in a scrutiny under Section 143(2) or a reassessment under Section 148. Answering consumes time, may need professional intervention, and remains on the record following resolution (this can create a problem when applying for a loan or visa down the line).
The same applies to refunds. Most often, a delay or a rejection in refunds is due to inaccurate bank information, a not verified return or a mismatch in income.
Most individual taxpayers will have the due date for AY 2026-27 on 31st July 2026. If you miss it, you will have to pay a late fee under Section 234F — ₹1,000 for income of ₹5 lakh or less, ₹5,000 for income above that — and you will not get to avail of any of the benefits of capital losses and business losses for the year. The department may initiate an underreported income interview within four years after the tax year, and within a longer time period for foreign assets. If it is filed correctly, it doesn't open the door for anyone.
The amount involved does not change whether you get flagged. A ₹50 dividend missing from your return triggers the same automated mismatch as a larger gap. Cross-checking against Form 26AS, AIS, and TIS before you submit is no longer optional.
There is a longer-term cost too. Banks check your ITR for loan sanctions, embassies check it for visas, insurers check it for high-value policies. A clean filing history across years works in your favour. Revised returns and notice responses sitting against your PAN do not.
15 Common ITR Filing Mistakes and How to Avoid Them
1. Choosing the wrong ITR form: Seven forms exist, each for a specific profile. File ITR-1 with even a small mutual fund redemption and the return gets rejected. Any redemption this year means ITR-2 at minimum. Any F&O trade means ITR-3 is mandatory.
2. Skipping reconciliation with Form 26AS and AIS: Download both before entering a single figure. Form 26AS shows TDS deducted against your PAN; AIS shows every reported transaction. Anything in your ITR that does not match either document gets flagged during processing.
3. Missing additional income: Salary is easy to remember. Savings account interest, FD interest, dividends, rental income from a second property, freelance payments, and gifts above ₹50,000 from non-relatives are not. Most of this is already in your AIS — the department sees it whether you report it or not.
4. Claiming deductions you cannot support: Section 80C, 80D, HRA, LTA — every claim needs actual expenditure behind it and the paperwork to prove it. Do not claim 80D premiums you did not pay, or HRA while living rent-free. Inflated claims are a common trigger for scrutiny.
5. Ignoring TDS mismatches: If TDS was deducted, it has to appear in Form 26AS. If the figure you claim does not match what is in 26AS, the credit gets rejected and you could face an unexpected demand. Check every entry before claiming it, and chase the deductor if TDS they cut has not been deposited.
6. Not reporting capital gains: This is the single most common error. Sold mutual fund units, shares, or a flat — that is a capital gain. Switched between mutual fund schemes — also a capital gain, on the scheme you exited. Each transaction needs the correct cost of acquisition, purchase and sale dates, and the right tax treatment based on holding period. Pull consolidated statements from CAMS, KFintech, and your broker before you start.
7. Picking the wrong tax regime without comparing both: The old regime keeps deductions and exemptions; the new regime offers lower slab rates but drops most of them. The new regime has been the default since FY 2023-24 — you have to actively opt for the old one if you want it. Run the numbers both ways. Taxpayers with significant 80C investments, home loan interest, or HRA claims often end up paying less under the old regime.
8. Leaving out foreign assets or income: A foreign bank account, overseas investment, foreign property, or even a small dividend from a US stock held through an Indian platform requires Schedule FA and FSI in ITR-2 or ITR-3. Non-disclosure falls under the Black Money Act, with penalties well beyond standard income tax proceedings.
9. Getting personal details wrong: PAN, Aadhaar, bank account number, IFSC, date of birth, address — all of it needs to match your official documents exactly. A wrong account number means your refund has nowhere to go. A PAN-Aadhaar mismatch stops the return from processing at all.
10. Forgetting exempt income still needs disclosure: Agricultural income, PPF interest, life insurance maturity under Section 10(10D), LTCG below ₹1.25 lakh from equity — none of this is taxable, but all of it has to be declared. Skipping it, even though it costs zero tax, is still a filing error that can trigger a notice.
11. Missing the deadline for carrying forward losses: Short-term capital losses offset both short and long-term gains; long-term losses offset only long-term gains. Whatever is left over can be carried forward for eight years — but only if you file on or before the due date. File late and that year's losses are gone for good.
12. Filing in the last few days: The due date is 31 July 2026. Filing right up against it leaves no room to fix errors, deal with portal slowdowns, or track down a missing document — and no time to respond if a defect notice arrives. File by mid-July and give yourself the buffer.
13. Letting notices sit unanswered: A defect notice under Section 139(9), an intimation under Section 143(1), or a query through the portal needs a response within the stated deadline. None of these resolve themselves by being ignored — they escalate. Check your registered email and the portal's notice section regularly in the months after you file.
14. Forgetting to verify the return: Submitting is not the same as filing. An unverified return is treated as if it was never filed at all. Verify within 30 days using Aadhaar OTP, net banking, bank account validation, or Demat verification. Miss the window and you have to refile with a condonation request.
15. Trusting pre-filled data without checking it: The portal pre-fills fields from Form 26AS, AIS, and employer data — useful as a starting point, not reliable as a finished return. It frequently misses bank interest not reported under your PAN, capital gains not yet updated in the system, or rental income that was never captured. Check every pre-filled entry against your own records and add whatever is missing.
Quick Checklist Before You Submit
- Cross-check AIS and Form 26AS against every entry in your return.
- Confirm you have the correct ITR form.
- Make sure every deduction claim has documentation behind it.
- Match capital gains figures against your broker and AMC statements.
- Verify your bank account number and IFSC code.
- Confirm PAN-Aadhaar linking is active.
- Check that your tax regime choice was deliberate, not the default.
- Match TDS credits to Form 26AS.
- Verify the return within 30 days of filing it.
Explore: Which ITR Form Should You File for FY 2025-26 (AY 2026-27)?
Conclusion
Most ITR errors are not deliberate. They happen because someone rushed, trusted the pre-filled data without checking it, or did not know a particular income needed to be disclosed. The department's systems are automated and thorough, and they will find the gap between your return and the data they already hold. Filing accurately and on time is the only way to stay ahead of that — run through this list every year before you submit, and you will sidestep the notices, delays, and penalties that catch most people off guard.
