Common mistakes people make while filing Income Tax Return


ITR: Income Tax Return

Income Tax Return is a document which shows the total income earned and the tax liability thereon of the filer during a financial year to the Income Tax Department.  This is why ITR is also used as proof of Income. In this article, we will discuss common mistakes people make while filing Income Tax Return

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Why to File Correct ITR?

It is mandatory for every individual to file Income Tax Return if his income exceeds the prescribed basic exemption limit.  Exemption limit is different for different age group. Many people file their ITR at the last moment due to which wrong ITR form filed and thus, their ITR Form get rejected by the Income Tax Department or they have to pay penalties. This is why it is very important to file correct ITR at the correct time to avoid penalties and other future problems.

The efficient method to file error-free ITR is to know ‘common mistakes which people make while filing ITR’.

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Common Mistakes that people commit while filing ITR

Misconception about ‘Whether to file ITR or not’

It is very common misconception among people that they are not required to file ITR at all if their income is up-to Rs. 5 Lakh. As per Income Tax Act, every person can file ITR even if their income is zero and it is mandatory for every person whose income exceeds the prescribed limit to file ITR although their tax liability is zero. For example, any person earning up-to 5 lakh is mandatorily required to file ITR and thereafter he can claim the rebate up-to Rs. 12,500 u/s 87A.

Filling Incorrect Personal Details

According to Reports, manual filing of income tax return get rejected for filling incorrect personal details such as Name, Address, Bank Account details, and so on. This is also one of the main reasons for delays in refunds.

Thus, everyone must ensure the accuracy of personal details while filing ITR.

Failure to file Correct ITR Form

Choosing the correct ITR Form is the utmost important step while filing ITR. Many people make a huge mistake by filing incorrect ITR Form because they do not know which ITR is applicable on them. This is why it is always suggested to please confirm before submitting an error in ITR or to seek assistance from CAs & experts for filing ITR Form.

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Claiming deductions under Wrong head

The next major mistake many of us commit is income tax returns wrongly filed to claim deductions under wrong heads due to which either our ITR form gets rejected or the tax liability is increased. For example, many people claim Employer’s contribution to EPF under Section 80 C benefits although it is incorrect.

Thus, every ITR filer must ensure that deductions are claimed under correct head.

Failure to report Exempted income

Income Tax Act has exempted certain income from being taxed such as Public Provident Fund Interest, Dividends etc. Although, these income are tax-free but it is mandatory to report these income in the separate annexure in ITR Form. But many people fail to report these exempted income which leads to unnecessary income tax queries.

 Failure to report certain income

Many of us fail to include certain income which is required to be specified while filing ITR. For example, many people do not write Interest received on Fixed Deposits although it is taxable as Income from other sources. Similarly, many of us fail to include Income from Investments made in the name of Children or spouse or Income received from previous employers.

Thus, one must include all the income earned in a financial year under the correct head of Sources of Income.

 Reporting the Wrong Assessment Year

One must always ensure the accuracy of providing correct assessment year as quoting the wrong Assessment year will attract unnecessary penalties and rejection of ITR.

 Failure to report Form 16 from more than 1 employer

Sometimes, a taxpayer might have received Form 16 from 2 or more than 2 employers. In this case, the taxpayer has to be careful while filing ITR Form as it can be tricky to provide correct income amount from all the employers under the correct head of income.

Non-Reporting of Interest Income received on Saving Account

According to Income Tax Act, 1961, any income received in the form of Interest on Saving Account up to the amount of Rs. 10,000 is not taxable. This is why, many people fail to report this income in their ITR Form although it has to be mandatorily reported in ITR as Income from other Sources and then they can claim exemption thereon.

Thus, one must always report Interest Income received on Saving Account even if it is not taxable.

Failure to report more than one house property

In many cases, people own more than one self-occupied or vacant property and as per the Income Tax Act, 1961, one house property is tax-exempted and other properties are taxable at prescribed rates. Thus, people report only one house property in their ITR Form due to which they face legal discrepancies & penalties.

Failure to deposit TDS or to give correct TDS details

It is observed that many times, employers or other required persons fail to deposit TDS with IT Department or mentions wrong TDS details like Incorrect PAN Number or Name etc. Thus, the Form AS26 will show wrong TDS amount.

Non-payment of Advance Tax or Self-assessment Tax

Income Tax has prescribed certain income on which TDS is not applicable but the taxpayer is required to pay advance tax or self-assessment before the end of financial year. Many people fail to pay the same which attracts heavy penalties.

Failure to send ITR-V Form in time

If the ITR filer does not have DSC then he is required to send the ITR-V to the CPC Bangalore either by ordinary post or speed post only within 120 days from the date of filing of ITR Return otherwise the ITR shall be treated as null and void.



Filing a correct Income Tax Return will help to avoid penalties and other legal troubles. One can file ITR by himself but if any person is not confident about the selection of ITR Form or the accuracy of ITR then always seek professional help.

Contact Manthan Experts Team for happy filing of ITR

Knowledge Source:


Significant Changes in Indian Taxation System Applicable From 1st April, 2021

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