ITR filing FY 2024-25: Income tax payers take note! These 7 mistakes in income tax return filing this year can cost you big

Income Tax Return Filing FY 2024-25: Filing ITR can be a complicated process for most of us, and hence it is important that the tax return filing is error-free to avoid any notice from the Income Tax Department. At the beginning of the income tax return filing season, taxpayers have received additional time - a 45-day extension for submitting returns.

The last date to file ITR has moved from July 31 to September 15 to address the substantial structural modifications in ITR forms introduced by the Budget 2024. However, despite the extension being beneficial for many, there remains a possibility of making errors in your returns. Here is a look at the top 7 tax filing mistakes you should steer clear of, as listed in an ET report:

1. Avoid Wrong ITR Form

Several common errors need to be avoided whilst filing returns. These include selecting incorrect ITR forms, failing to verify submitted returns, not meeting deadlines, or incorrectly assuming that filing returns is unnecessary.

Another frequent misconception is that having zero tax liability exempts one from filing returns. It is compulsory to file returns if you have spent over Rs 2 lakh on international travel, Rs 1 lakh on electricity consumption, or similar expenses.

Additionally, if you are due for a tax/TDS refund or need to carry forward losses, filing returns is essential to facilitate these processes.

2. Overlooking AIS & Form 26AS Verification

A common oversight amongst individuals is failing to verify their Annual Information Statement (AIS) and Form 26AS before submission. These documents provide comprehensive details of financial transactions and tax payments.

Also Read | ITR filing deadline extended for FY 2024-25: Here's what income taxpayers need to do

3. Incomplete Income Declaration

The omission of income sources, whether inadvertent or deliberate, carries significant financial implications. The consequences include penalties ranging from 50-200% of tax liability, additional interest charges, and potential legal proceedings.

4. Check for Budget 2024 changes

Taxpayers might encounter errors primarily due to Budget 2024 modifications. The revised ITR forms necessitate new compliance requirements, whilst alterations in deductions and capital gains taxation could result in computational inaccuracies.

5. Omission of exempt income declaration

Although exempt income isn't included in taxable income calculations, one must declare it in the appropriate section (Schedule EI).

6. Overlooking previous employer's income

Individuals switching jobs within a fiscal year often erroneously claim basic exemption and deductions twice. When investment declarations are submitted to both employers, they may separately apply basic exemption limit, standard deduction, and Chapter VI-A deductions, leading to excessive tax benefits and reduced TDS.

Also Read | ITR filing FY 2024-25: What’s new this year? Top things every taxpayer should know before income tax return filing

7. Errors in HRA declarations

False claims for HRA exemption can attract severe penalties, with fines reaching 200% of the incorrectly reported sum. Under the old tax regime, salaried staff can claim HRA exemption as a salary component. Valid claims require supporting documents, including a formal rent agreement, rent receipts and the landlord's PAN (for annual rent above ₹1 lakh), submitted to the employer, along with actual residence in rented premises.