ITR Filing Deadline July 31: Avoid These 5 Common Mistakes to Prevent Tax Notices

The deadline for filing Income Tax Returns (ITR) for the Assessment Year 2024-25 (Financial Year 2023-24) is July 31, 2024. As the date nears, the Income Tax Department has urged taxpayers to file early to avoid the last-minute rush. However, haste often leads to errors that can trigger scrutiny notices under Section 143(1) or result in the rejection of refund claims.

1. Ignoring the Annual Information Statement (AIS) and TIS

One of the most frequent mistakes is relying solely on Form 16. Taxpayers must download and review their Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) from the e-filing portal. These documents capture all financial transactions, including savings account interest, dividend income, and stock market transactions. Any discrepancy between your ITR and the AIS can lead to an immediate tax notice for under-reporting income.

2. Selecting the Wrong ITR Form

Choosing the incorrect form is a technical error that can render your filing 'defective.' For instance, ITR-1 (Sahaj) is meant for individuals with income up to ₹50 lakh from salary, one house property, and other sources. However, if you are a director in a company or hold unlisted equity shares, you cannot use ITR-1 and must opt for ITR-2 or ITR-3. Filing the wrong form may require you to file a revised return, potentially after the deadline.

3. Failure to Disclose All Income Sources

Taxpayers often forget to report 'exempt income' or minor income sources. This includes interest earned on savings bank accounts (deductible up to ₹10,000 under Section 80TTA), interest from fixed deposits, and income from capital gains. Even if your total income is below the taxable limit, if you are filing a return, every rupee earned must be accounted for to match the department's data records.

4. Incorrect Bank Account Details for Refunds

If you are eligible for a tax refund, ensure your bank account is 'validated' on the e-filing portal. Errors in the IFSC code or account number are common reasons for refund failures. Additionally, the name on your bank records must match the name on your PAN card. The Income Tax Department only issues refunds to pre-validated bank accounts linked with PAN.

5. Forgetting to E-Verify the Return

Filing the ITR is only half the job. Your return is not considered valid until it is verified. Taxpayers have a 30-day window to e-verify their returns using Aadhaar OTP, net banking, or digital signature. If you fail to verify within this period, your ITR will be treated as 'not filed,' which could attract late fees of up to ₹5,000 under Section 234F and interest on unpaid taxes.

This report is for informational purposes only and does not constitute professional tax advice. Please consult a qualified chartered accountant for specific queries.