10 Common ITR Mistakes (and How to Avoid Them)
✓ Covers returns for FY 2025-26 and Tax Year 2026-27 · Reviewed 19 Oct 2026
The short answer: most tax notices for salaried people come from a handful of avoidable slips. These are the ten I see most often, and the fix for each.
Which law applies: returns for FY 2025-26 (AY 2026-27, filed in 2026) still follow the Income-tax Act, 1961. Income from 1 April 2026 (Tax Year 2026-27, filed in 2027) falls under the Income-tax Act, 2025. The mistakes below matter under both.
1. Using the wrong ITR form
ITR-1 is only for simple cases. Move to ITR-2 if you have capital gains beyond the small listed-equity gains ITR-1 allows, more than one house property, or are a company director. You also need ITR-2 if you hold unlisted shares or have any foreign asset or foreign income. A return on the wrong form can be treated as defective.
2. Not checking AIS and Form 26AS
Your Annual Information Statement (AIS) already shows the department your salary TDS, interest, dividends, share and mutual fund sales, and high-value transactions. Download it before filing and make sure every item is in your return. If an entry is wrong, give feedback on the portal; don't just leave it out.
3. Forgetting interest income
Savings account interest, FD and RD interest, and interest on income tax refunds are all taxable. The ₹10,000 deduction on savings interest (₹50,000 on deposits for senior citizens) is available only in the old regime.
4. Missing capital gains
Every redemption or switch between mutual fund schemes, every SWP payment and every share sale is a capital-gain event, even when you reinvest. Short- and long-term gains are taxed at different rates, and losses only carry forward if you report them in a return filed on time.
5. Not reporting foreign assets
Hold US shares through RSUs or ESPP, or a foreign bank account? Report it in Schedule FA, even if you sold nothing. Leaving it out can attract a ₹10 lakh penalty under the Black Money Act. See our RSU & ESOP guide.
6. Claiming old-regime deductions under the new regime
80C, 80D, HRA and home loan interest on a self-occupied house aren't available under the new regime. Claim them by mistake and you'll get a demand. Choose your regime first, then claim only what that regime allows.
7. Not disclosing exempt income
PPF interest, maturity proceeds of eligible policies, agricultural income and similar exempt amounts still belong in the exempt income schedule. Leaving them out can make large deposits in your bank account look unexplained.
8. Paying tax late, or not at all
If you owe more than ₹10,000 for the year, you need to pay advance tax in instalments. If you don't, you pay interest on top. Any balance must be paid as self-assessment tax before you file, or the return is defective. Filing after the due date also attracts a late fee of up to ₹5,000 (₹1,000 if your income is up to ₹5 lakh).
9. Not e-verifying within 30 days
A return isn't complete until it's verified. E-verify with an Aadhaar OTP, net banking or a demat account within 30 days of filing. If you're late, the return can be treated as filed on the day you verify, with late-filing consequences.
10. Wrong bank account for your refund
Refunds go only to a bank account that is pre-validated on the e-filing portal and linked to your PAN. Check this before filing, especially after changing banks or closing an account.
Missed something? Your options for FY 2025-26
| Option | When | Note |
|---|---|---|
| Belated return | By 31 December 2026 | Late fee applies; some losses can't be carried forward |
| Revised return | By 31 March 2027 | To correct a return already filed; extended by Budget 2026 |
| Updated return (ITR-U) | Within 4 years from the end of the assessment year | Only to declare more income, with additional tax |
Before you press "Submit"
- ☐ AIS and Form 26AS matched line by line
- ☐ Correct ITR form for your income
- ☐ Regime chosen, with only that regime's deductions claimed
- ☐ All capital gains, interest and foreign assets reported
- ☐ Tax paid in full, with challan details entered
- ☐ Bank account pre-validated; e-verify right after filing
General education, not personal tax or investment advice. Laws and rates change, so verify against current law before acting. Disclaimer