FY 2024–2025 ITR filing: Attention, income taxpayers! This year’s income tax return filing errors can cost you lot of money

Filing an Income Tax Return (ITR) is a crucial responsibility for every taxpayer. For many, however, the process can be confusing and overwhelming, especially with ongoing changes in tax laws. Errors made during tax filing can result in delayed refunds, penalties, or even notices from the Internal Revenue Service (IRS) or the Income Tax Department.

To ease the burden for taxpayers, the government has provided a 45-day extension for ITR filing in the 2025 assessment year. The original deadline of July 31 has been extended to September 15 to accommodate significant changes introduced in the Budget 2024, particularly the revised ITR forms and updated reporting requirements.

While this extension gives taxpayers more time, it does not eliminate the risk of mistakes. Below are the most common ITR filing mistakes you must avoid to ensure a smooth and compliant filing process.

Using the Wrong ITR Form

One of the most frequent and easily avoidable mistakes is selecting the incorrect ITR form. The form you choose depends on your income type (salary, business, capital gains, etc.) and your residential status.

Common Mistake: Salaried individuals using ITR-1 even if they have capital gains or foreign assets, which require ITR-2 or ITR-3.

Using the wrong form may lead to rejection of the return and possible delays in refunds. Always consult the updated guidelines or a tax advisor when in doubt.

Incomplete Income Declaration

Failing to report all sources of income—whether accidental or deliberate—can result in serious financial consequences. This includes:

• Interest from fixed deposits or savings accounts

• Freelancing or side income

• Rental income

• Capital gains from stock or mutual fund transactions

Penalty: Between 50% and 200% of the tax liability, plus interest and potential legal proceedings. Ensure that all income sources, no matter how small, are accurately reported in your return.

Ignoring Form 26AS and AIS

Many taxpayers overlook the importance of verifying their Form 26AS and Annual Information Statement (AIS) before filing.

These forms contain details of:

• TDS/TCS deducted

• Advance/self-assessment tax paid

• High-value financial transactions

Mismatch between these records and your ITR may lead to processing delays or notices. Always verify these forms on the income tax portal before submission.

Not Declaring Exempt Income

Although exempt income (like agricultural income, PPF interest, or tax-free dividends) is not taxable, it must still be reported in the relevant section of the ITR.

Common Oversight: Skipping exempt income altogether, assuming it doesn’t matter.

This could raise red flags during tax scrutiny. Declare all exempt income to maintain transparency and avoid unnecessary queries.

Overlapping Deductions from Multiple Employers

If you’ve switched jobs during the financial year, be cautious not to claim the standard deduction or basic exemption twice.

How It Happens: Each employer processes TDS independently based on your declarations. If you don’t consolidate your income correctly, it may result in underreported income or excess deductions.

Always combine salary details from all employers when filing ITR.

HRA Claim Errors

Claiming House Rent Allowance (HRA) without proper documentation can lead to heavy penalties—up to 200% of the incorrectly claimed amount.

To make a valid HRA claim, you must provide:

• A rent agreement

• Monthly rent receipts

• The landlord’s PAN (if rent exceeds ₹1 lakh annually)

• Proof of residence

False HRA claims are a red flag for tax officers, especially under the old tax regime.

Assuming ITR Filing is Not Required

Many people assume they don’t need to file an ITR if they have no tax liability. This is a misconception.

Filing is still mandatory if you:

• Want to claim a TDS refund

• Need to carry forward losses

• Earn more than the basic exemption limit

Skipping your return could also impact your financial records and loan applications.

Not Reviewing Budget 2024 Changes

Budget 2024 introduced several key updates that impact ITR filing:

• New ITR form structures

• Updated compliance rules

• Capital gains taxation changes

• Altered deduction eligibility

Failing to stay updated may lead to calculation mistakes or missed tax benefits. Ensure you review the latest budget announcements and incorporate them into your return.

Conclusion

The ITR filing deadline for FY 2024–25 is now September 15, 2025, giving taxpayers extra time to file correctly. However, avoiding common tax filing mistakes is essential to ensure timely processing, avoid penalties, and secure your tax refunds.

Take your time to review all income sources, verify documents, and stay compliant with the latest rules. When in doubt, seek help from a tax professional or use the official Income Tax e-filing portal for guidance.