ITR Filing FY 2024-25: THESE 7 income tax mistakes can get you a tax notice | Mint

Over the years, taxpayers across the nation have received an increasing number of Income Tax notices. This has been a consequence of the tax department intensifying its scrutiny due to the data driven and technology backed regime.

Elaborating on the same, CA (Dr.) Suresh Surana, says “Even minor slip-ups while filing your ITR—like using the wrong form, failing to report exempt income or foreign assets, or inflating deductions—can attract scrutiny. The Income Tax Department uses data analytics to flag discrepancies, making accuracy and full disclosure absolutely essential.”

Therefore, keeping the above factors in mind, as we go ahead with filing returns for FY 2024-25, here are seven common errors that can result in triggering an alert:

1. Incorrect ITR form selection

This can be considered as the most common reason of them all. It is to do with choosing the wrong return form such as using ITR-1, despite having capital gains or rental income. Such a decision can result in defective return notices under Section 139(9) of the Income Tax Act.

2. Failure to report all income

Sometimes income tax filing is done without reporting interest from savings, fixed deposits, rental income, cryptocurrencies or overseas assets. This can result in mismatch and errors in Form 26AS and AIS, thus triggering scrutiny and errors or rejection of the filing.

3. Mismatches in TDS reporting

Discrepancies between TDS claimed in returns along with actual figures in Form 26AS can also result in tax notices. These notices are sent under Section 143(1) of the Income Tax Act as an intimation of the found discrepancies.

4. Claiming unsubstantiated deductions

In case you claim incorrect or unsubstantiated claims under Section 80C, 80D or HRA then you can very easily invite the complete attention of the tax authorities. Lack of proof can further complicate things leading to intense assessments, notices or penalties.

5. High‑value transactions or sudden drop in income

Depositing large amounts of funds or a sharp decrease in declared income from year to year can spark automated checks and scrutiny. This is a serious possibility due to the rapidly evolving data analytics led rules and regulations.

That is why it is always prudent to submit solid proof of the deductions, income sources or any other exceptional circumstances influencing the overall income tax return. Hiding of data or submission of partial data cannot go unnoticed now-a-days for much longer.

6. Missing documentation or E‑verification

Not submitting important documents such as bank interest certificates, rent receipts, mutual fund statements, capital gains statements, dividend statements or failing to e-verify within the stipulated time can render your return invalid or defective.

Such a development can eventually result in you receiving a notice from the tax authorities. This notice can be delivered to you under any of the prominent income tax provisions or their respective sub clauses such as Section 139, Section 143 or others.

7. Ignoring income tax portal notices and deadlines

One more very important point to keep in mind is that you should definitely reply to all income tax notices within the stipulated time. If in doubt, take professional advice. Still, do remember not replying promptly to notices under Section 142(1), 143(2) or 148 can result in escalating minor mistakes and errors into a full blown reassessment.

What taxpayers should do

• Do ensure that you opt for the correct ITR form based on income sources.
• Carefully check data with AIS, Form 26AS and Form 16 before filing.
• Keep all supporting documents, facts and data organised for deductions and income.
• E‑verify returns promptly upon the completion of filing to avoid invalidation.
• Respond to every notice through the e‑filing portal or through a professional tax advisor.

Hence, following these simple yet effective measures can help you in avoiding penalties, emotional difficulty, unnecessary scrutiny and refunds being held up, especially during the rapidly evolving technology driven income tax assessment process.

Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Readers are advised to consult a qualified tax professional for guidance specific to their financial situation and compliance requirements.