Filing your Income Tax Return (ITR) isn’t just another annual chore; it’s a personal financial statement that tells the tax department and, ultimately, your future lender exactly how organised you are with money. FY 2024-25 (which the tax department will assess as AY 2025-26) arrives with tweaked forms, tighter data analytics on the portal, and a 30-day e-verification rule that can turn a “submitted” return into an invalid one if you miss the follow-up. In short, the room for money mistakes is shrinking.
This expanded guide digs deep into each error highlighted by Fortune India’s report on “5 common mistakes to avoid when filing ITR for FY 2024-25”, then layers on practical strategies, checklists, and insider context so you can confidently:
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Pick the right form the first time.
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reconcile every rupee in your AIS and Form 26AS,
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declare “tiny” interest that algorithms flag,
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claim deductions without triggering scrutiny, and
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E-verify on Day 1, not Day 29.
If you follow along section by section, you’ll not only dodge notices but also keep more cash in your pocket, secure faster refunds, and build a reputation for squeaky-clean compliance – an underrated asset when you need a loan or visa in the future.
Quick Glossary: Decode Your Tax Toolkit
Before diving into the real money mistakes, let’s synchronise our vocabulary. A shared language removes 80% of filing errors because you instantly spot when a figure has landed in the wrong box.
| Term | What It Means in Plain English | Why It Matters for FY 2024-25 |
|---|---|---|
| Financial Year (FY 2024-25) | Your income period: 1 April 2024 – 31 March 2025. | All salary slips, bank interest, and capital-gain statements must fall inside these dates. |
| Assessment Year (AY 2025-26) | The year the tax department assesses the FY 2024-25 income. | All forms and due dates on the portal refer to AY. |
| ITR-1, 2, 3, 4 | Return forms for different income mixes. | Selecting the wrong one is the #1 filing error. incometax.gov.in |
| Form 26AS | A consolidated tax credit statement showing TDS/TCS and advanced tax. | Your refund calculation lives or dies by this reconciliation. incometax.gov.in |
| Annual Information Statement (AIS) | A data-rich dashboard that logs interest, dividends, securities trades, and high-value spends. | Inland Revenue AI cross-checks it against your ITR within minutes. |
| e-Verification | The digital sign-off (Aadhaar OTP, net banking, DSC, etc.) you must complete within 30 days of submission. | A non-verified return is treated as non-filed. incometax.gov.in |
Pro Tip: Bookmark your AIS and Form 26AS dashboards now; stalking them monthly turns once-a-year panic into a low-key routine.
Mistake #1 – Choosing the Wrong ITR Form
The Indian e-filing system is unforgiving: upload your data into the wrong template, and the portal will either slap a defective return notice on you (Section 139(9)) or silently nix your deductions. Fortune India finds this error to be rampant among gig workers, stock traders, and NRIs who switched roles mid-year.
Signs You Selected the Wrong Form
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You have dividend or capital-gain income but still file ITR-1.
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Your salary topped ₹50 lakh, but you didn’t upgrade to ITR-2.
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You run a side business yet ignore ITR-3 or ITR-4.
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Post-upload, the portal auto-populates zeros for certain schedules it expects a red flag!
Strategy: 3-Step Form Selector
| Step | Question to Ask Yourself | Resulting Form | Money Mistake Risk if Ignored |
|---|---|---|---|
| 1 | Do I have only a salary, one house property, and interest? And is total income ≤ ₹50 lakh? | ITR-1 | Under-declaring side income, causing a later demand notice. |
| 2 | Do I have capital gains, more than 1 property, foreign assets, or income > ₹50 lakh but no business? | ITR-2 | Filing ITR-1 here underplays tax; the portal flags mismatch. |
| 3 | Do I earn from business/profession, presumptive or otherwise? | ITR-3 (regular) or ITR-4 (presumptive) | The wrong form cancels the presumptive benefit or fails to capture books. |
Save this table to your phone. Consult it before hitting Start New Return next July.
Mistake #2 – Ignoring AIS/26AS Mismatches
Inside the tax department’s neural network, every rupee of TDS, TCS, or high-value swipe from your PAN travels to your AIS almost in real time. Forget to mirror that number in Schedule TDS or income heads, and the system will auto-generate a mismatch letter (Section 143(1)). Fortune India lists this as the second-most frequent headache.
Where the Numbers Hide
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Form 26AS surfaces tax deducted at source by employers, banks, or tenants.
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AIS widens the lens: stock trades, EPF withdrawals, mutual-fund dividends, credit-card spends > ₹10 lakh, and even foreign remittances.
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Taxpayer Information Summary (TIS) condenses AIS categories to “reported” vs “modified” figures, helping you self-audit.
Heads-up: The portal’s AI now triggers a soft reminder SMS within 24 hours if your uploaded XML under-reports a figure that appears in AIS by more than ₹1. You have a three-day grace period to revise before a formal notice lands.incometax.gov.in
Strategy: Weekly Reconciliation Ritual
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Friday download – Pull fresh AIS & 26AS PDFs every Friday during filing season.
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Highlight deltas – Use spreadsheet conditional formatting to colour-code mismatches > ₹1.
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Fix or flag –
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Your typo? Edit the ITR draft.
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Deductor’s typo? Email them Form 16/16A for correction.
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Lock the match – Only after a perfect tie-up do you generate the JSON for upload.
Doing this weekly shrinks a Saturday-night data swarm into 15-minute micro-tasks and shields you from the biggest money mistake: under-reported income.
Mistake #3 – Not Reporting “Small” Interest or Minor Income
“Does the department really care about ₹437 in bank interest?” Short answer: yes. Algorithms don’t nap, and Fortune India warns that unreported savings-account credit is among the top triggers for notices.
Why the Taxman Notices Paise
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AIS records interest credited, even if TDS wasn’t deducted.
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Section 234A/B/C interest snowballs on under-reported tax as low as ₹100.
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Repeat offenders go into a risk-profiling bucket; future returns face manual review.
Real-life Money Mistake: A Bangalore techie skipped ₹11,200 FD interest for two years. When a machine-generated notice recomputed his tax, late-payment interest tripled the shortfall.
Strategy: Auto-Aggregate Interest Statement
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Net banking pull – Most banks now offer a single-click “Interest Certificate FY 2024-25” download.
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CSV merge – Drop all certificates into a sheet; a pivot table totals by quarter.
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Schedule OS pre-fill – Paste the grand total into Income from Other Sources.
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Deduction cross-check – If you still use the old regime, claim the Section 80TTA/80TTB deduction right below, keeping proof handy.
Five minutes here can save hours of rectification drama later.
Mistake #4 – Mis-claiming Deductions & Exemptions
From inflated HRA splits to double-counting Section 80C ELSS funds, deduction errors are classic money mistakes that drain refunds and invite Section 143(1)(a) adjustments. Fortune India highlights omission and incorrect claims as a double-sided trap.
Money Mistakes Checklist
| Deduction/Exemption | Common Slip-Up | Quick Fix |
|---|---|---|
| HRA | Using rent receipts from relatives without a rental agreement. | Create a stamped agreement; pay via bank transfer. |
| Section 80C | Counting the same PPF deposit twice (self + spouse) or crossing the ₹1.5 lakh cap. | Maintain a running tally in a spreadsheet throughout the year. |
| Section 80D | Claiming parents’ medical claim without paying the premium yourself. | Ensure the premium was debited from your account or a joint one. |
| Section 54 Capital Gain Exemption | Missing the 6-month investment window in REC/NHAI bonds. | Set calendar reminders post-sale to deploy proceeds on time. |
Strategy: Digital Document Vault
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Cloud store – Use a zero-cost cloud folder named “ITR FY 2024-25” and upload proofs on payday each month.
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Timestamped PDFs – Mobile-scan receipts; keep the timestamp visible to silence queries.
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Regime filter – Colour-code files red (old regime only) or green (usable under either).
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Backup reminder – Sync the folder weekly; a crashed laptop shouldn’t wipe tax proof.
A well-organised vault is your bulletproof vest in case of scrutiny, and it preserves your rightful deductions without fear.
Mistake #5 – Skipping or Delaying E-Verification
Submitting the JSON or online form isn’t the finish line. You have 30 calendar days to e-verify, failing which the return is treated as non-filed, nullifying your effort and exposing you to late fees (Section 234F). The Income Tax Department FAQs hammer this rule repeatedly.
Strategy: “Verify the Same Day” Rule
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Set an instant reminder – enable portal notifications in your profile and switch on SMS alerts.
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Pick your weapon –
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Aadhaar OTP (fastest)
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Net-banking (good if your mobile network is flaky)
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Digital Signature Certificate (DSC) (mandatory for audit cases)
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Check bank pre-validation – Refunds hit quicker when your primary bank account is pre-validated before e-verification.
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Download ITR-V – Store the acknowledged PDF in the same cloud vault.
Verifying on Day 0 ensures the clock never even starts, eliminating a surprisingly common money mistake.
Pro Tips Before You Hit “Submit”
Beyond Fortune India’s five headline errors, a few last-minute moves sharpen your filing game:
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Leverage the 45-day extension wisely – The government has moved the individual due date to 15 September 2025 to help taxpayers adapt to new form structures introduced in Budget 2024. Use the cushion to reconcile data, not procrastinate.
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Freeze your tax regime early – Flip-flopping between old and new regimes mid-draft scrambles deductions and TDS credits.
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Track form availability – As of mid-June, only ITR-1 and ITR-4 are live for online filing; plan accordingly if you need ITR-2 or 3.
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Run a simulation – Most portals let you upload drafts repeatedly. Use early uploads to catch validation errors.
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Seek a second pair of eyes – A 10-minute review by a CA or savvy friend often surfaces typos that cost thousands.
FAQ
Q1. What happens if I file the wrong ITR form?
A defective-return notice under Section 139(9) lands in your portal inbox. You then get 15 days to correct and re-file; ignore it, and the return becomes invalid, attracting late fees and interest.
Q2. Is it mandatory to verify my ITR after filing?
Yes. You must e-verify within 30 days of submission. Failure converts your ITR into “not filed”, nullifies deductions, and triggers late filing fees of up to ₹5,000. incometax.gov.in
Q3. How do I reconcile AIS and Form 26AS data?
Download both statements, run a side-by-side comparison in a spreadsheet, highlight variances, and adjust your ITR or ask the deductor to correct their TDS return. Only file once figures tally to the rupee. incometax.gov.in
Q4. Do I need to report interest if TDS is already deducted?
Absolutely. TDS is only a pre-payment of tax; the gross interest still forms part of “Income from Other Sources”. Omit it, and you risk under-reporting penalties.
Q5. Can I revise my return if I spot a mistake later?
Yes. Under Section 139(5) you can file a revised return any time before 31 December 2025. If the error surfaces after that, use the Updated Return window (Section 139(8A)) within two years, but be prepared for an additional tax of up to 50%.