Filing your Income Tax Return (ITR) is a routine activity, but leaving out even a small piece of information can lead to penalties, questioning, or a delayed refund. The Income Tax Department cross-verifies your returns with Form 26AS, AIS, and bank data. In order to avoid any glitches in filing, it's necessary to take some precautions and check each part separately before you click the submit button.
Check income details with Form 26AS and AIS
As a first step prior to filing your return, download your Form 26AS and Annual Information Statement (AIS) from the income tax website. These reports show all tax deducted, interest received, capital gains, and high-value transactions reported by banks and other intermediaries. Any mismatch between your return and these reports may result in a notice or delay your refund. Always match figures carefully with your Form 16, bank statements, and evidence of investments.
Select the right ITR form based on your income
Choosing a wrong ITR form is the most frequent error. For example, if you are a salaried person with no additional income, you can file ITR-1, but if you have foreign assets or capital gains, you need to file ITR-2 or above. ITR-3 or ITR-4 might be applicable if you receive income from business. Filing with the incorrect form can render your return ineffective, and you will need to revise your returns within a specified deadline.
Report all sources of income, including exempted
Make sure to report all income—salary, interest on deposits, interest on Fixed Deposits, rental income, dividends, or profits on sale—even if some are exempted. Agricultural income, for example, is exempted but must be reported. Concealment by not reporting income—even if it is a minor lapse—would attract reassessment or penalty on audit.
Verification of deductions and exemptions utilized
If you are opting for the old tax regime, verify all the deductions—Section 80C, 80D, HRA, home loan interest, tuition fee, and donations. Have receipts or bank proofs at hand. In case you go with the new regime, only a few deductions available, like NPS under Section 80CCD(2) or standard deductions. Claiming ineligible deductions can result in demand notices and delayed refunds.
Verification of bank information and Aadhaar-PAN linking
Refunds are processed directly into your bank account, so check that your bank account is pre-validated and active. Also, your PAN must be linked to Aadhaar, or your return won’t be processed. Mistakes in IFSC codes or account numbers can cause refund failure. Make sure your contact details are correct to avoid missing any communication from the IT department.
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