You know that feeling when a deadline sneaks up on you? That sinking realization that you should’ve started earlier, but now you’re frantically scrambling to get things done? Well, that’s exactly what tax season feels like for most people. It’s that one annual adulting task you can’t escape, but no one really prepares you for it either. School didn’t teach you, your parents might still be filing theirs the old-school way, and the tax jargon? Absolute nightmare.
But filing your ITR doesn’t have to be a last-minute panic attack. With a little bit of planning, you can avoid unnecessary stress, errors, and, worst of all, getting a notice from the tax department. So, before you hit submit, let’s talk about the common mistakes that could cost you money, peace of mind, or both
Waiting till the last minute
We get it. Life is busy, and taxes seem like something Future You should worry about. But waiting till the deadline (usually 31st July, unless extended) can mean rushing through the process, making errors, or missing out on deductions that could’ve saved you money. Plus, if there’s a glitch on the income tax portal, because thousands of other procrastinators are also logging in, you’re stuck in a digital queue with zero control.
The reality is too many people put off filing their taxes, and it’s not a habit you want to fall into. In the 2023-24 fiscal, only 6.68% of India’s population filed an income tax return. Sure, some may not have taxable income, but a good chunk are either cutting it too close or skipping it altogether, both of which can lead to unnecessary stress and even penalties.
A pro tip would be to set a reminder for early July and get it done. Scrambling at the last minute isn’t worth the headache.
Choosing the Wrong ITR Form
Filing under the wrong category is a classic rookie mistake. The Income Tax Department has different forms based on your income sources. If you’re a salaried employee with no other major income, ITR-1 is your best bet. But if you have freelance gigs, stock market earnings, or rental income, you might need to switch to ITR-2 or ITR-3. Filing under the wrong category can lead to rejection, which means redoing the whole thing. And who wants that?
If you’ve already filed using the wrong form, don’t panic; you can correct your mistake by submitting a revised return under Section 139(5) of the Income Tax Act. But be careful: if the error was deliberate (say, underreporting your income by picking an incorrect form), the tax department can impose penalties ranging from 100% to 300% of the tax amount due.
Moral of the story? Take a minute to check which ITR form you actually need, it’s better than dealing with tax headaches later.
Ignoring tax deductions and exemptions
If you’re just looking at your salary and blindly accepting the tax liability, you’re probably paying more than you need to. The government wants you to save money through deductions under sections like 80C (PPF, EPF, life insurance, ELSS), 80D (health insurance), and even 80E (education loan interest).
Then there’s the new tax regime vs. old tax regime dilemma. If you switched jobs and weren’t aware which one your employer opted for, you could be paying extra.
Entering incorrect details
Even a small typo in your name, PAN, bank account number, or Aadhaar can mess things up. And don’t even think about fudging numbers because the Income Tax Department already has data from your employer, bank, and investments. Any mismatch, and you might get a friendly (or not-so-friendly) notice.
Also, don’t forget to verify your return. Filing is just step one. You have to e-verify it within 30 days; otherwise, it’s as good as not filed.
Forgetting to report all income
That fixed deposit interest? The ₹500 you made selling stocks? The rent you got from that flat in your hometown? If you skip mentioning any of these, it’s a red flag. The IT Department cross-checks data from banks, mutual funds, and brokers. If they find something you didn’t disclose, you could get a notice.
Filing taxes isn’t as scary as it seems, if you do it right. Take a little time, use online tools, and avoid these mistakes. Because the only thing worse than paying taxes is paying extra for a silly mistake.