ITR Filing 2026: Avoid making these mistakes at all costs while filing your tax return, or you might receive a notice..
The Income Tax Return (ITR) filing season is here again. Taxpayers are rapidly filing their returns for Assessment Year 2026-27 (Financial Year 2025-26). According to data, over 4.26 million (42.6 lakh) people had already submitted their returns by June 17, 2026. This time, the Income Tax Department is rigorously utilizing Artificial Intelligence (AI). This simply means that even a minor oversight or incorrect piece of information will be detected immediately, potentially leading to a tax notice being sent directly to your home.
If you are preparing to file your return before the July 31 deadline, it is crucial to keep a few key points in mind. Let us look at the common mistakes you must avoid at all costs to ensure the filing process goes smoothly and without interruption.
**Choosing the Wrong Form Can Prove Costly**
The first step in filing a return is selecting the correct ITR form. Filing the wrong form can result in your return being declared invalid (defective). For instance, if you own foreign assets or have realized long-term capital gains exceeding ₹1.25 lakh from equity mutual funds, you cannot file the simple ITR-1 form; instead, you must use ITR-2. Similarly, salaried individuals engaged in stock market Futures and Options (F&O) trading must report their details using the ITR-3 form.
**Close Scrutiny on Everything from Concealed Income to Fake Deductions**
People often forget to declare income such as nominal interest from savings accounts, dividends, or earnings from a previous employer after changing jobs. The Income Tax Department easily cross-verifies this information against bank records and TDS statements using your PAN card. Furthermore, claiming a tax exemption on House Rent Allowance (HRA) without valid proof can lead to serious consequences. If you are claiming a tax exemption by paying rent to your parents, ensure you keep the rent agreement and proof of payment. Additionally, your parents must declare this rental income in their own tax returns. Similarly, providing the transaction reference number is mandatory to claim a deduction for donations under Section 80G.
**Reconciling AIS and Form 26AS is Crucial**
Before filing your ITR, thoroughly cross-check your Annual Information Statement (AIS) and Tax Information Statement (TIS) against Form 26AS. Discrepancies often arise between the information provided by banks and your actual figures. Filing your return without reconciling these details makes receiving a tax notice highly likely. Exercise particular caution when reporting capital gains; due to recent budget changes, July 23, 2024, is a significant date for capital gains calculations. If you spot incorrect information or duplicate entries in your AIS, be sure to submit your feedback via the Income Tax portal.
**Consequences of Missing the Deadline and Failing to E-Verify**
For salaried individuals, the deadline to file the return is July 31, 2026. Meanwhile, the deadline for those filing ITR-3 or ITR-4 (non-audit cases) is set for August 31. Missing the deadline can attract a penalty of up to ₹5,000 (or ₹1,000 for income below ₹5 lakh).
This year, the 'New Tax Regime' applies by default, offering zero tax on income up to ₹12 lakh (or up to ₹12.75 lakh for salaried individuals). If you wish to avail the benefits of the 'Old Tax Regime,' filing your return before the deadline is mandatory. Finally, and most importantly, do not forget to e-verify your return within 30 days of online submission; failure to do so will render your entire return invalid.
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