For most salaried taxpayers, income tax return filing has become largely a digital exercise. Salary details are available in , tax credits can be checked through Form 26AS, and much of the return is now pre-filled using data reported by employers, banks, mutual funds and stockbrokers.
Yet every filing season, taxpayers end up facing lower refunds, additional tax demands, defective return notices or interest liabilities because of avoidable errors. The Department’s reporting framework has become far more comprehensive in recent years, making it easier to detect inconsistencies between the income reported in a return and the information available through official records. As a result, even small omissions can create complications long after a return has been filed.
Here are five mistakes taxpayers should avoid while filing their ITR.
When Form 16 tells only half the story
One of the biggest misconceptions among salaried employees is that Form 16 contains everything required for filing an income tax return.
While Form 16 captures salary income and the tax deducted by the employer, it may not include income from savings accounts, fixed deposits, recurring deposits, dividends, rental income, capital gains, freelance assignments or other sources. Taxpayers who rely exclusively on Form 16 risk underreporting their income.
The tax department receives information from multiple reporting entities, which means income omitted from the return can still be visible through official records. Before filing, taxpayers should ensure that all taxable income earned during the financial year is disclosed.
The three-way check most taxpayers skip
Many taxpayers download Form 16 and proceed directly to filing their return without reconciling it with Form 26AS and the Annual Information Statement (AIS).
This can be a costly mistake. Form 26AS contains details of tax deducted at source, tax collected at source and taxes paid by the taxpayer. AIS provides a much broader view of financial transactions and income reported to the tax department.
Discrepancies between these records and the figures reported in the return can affect tax credits, reduce refunds or result in additional tax demands. A thorough comparison of Form 16, Form 26AS and AIS before filing can help identify missing entries and reporting mismatches.
Choosing the wrong ITR form can invalidate the exercise
A surprisingly common error is filing the return using the wrong ITR form.
Different forms apply to different categories of taxpayers and income. A taxpayer with capital gains, foreign assets, multiple house properties or business income may not be eligible to use the same form as a taxpayer earning only salary income.
Filing the wrong form can lead to the return being treated as defective, requiring the taxpayer to submit a correction later. Selecting the appropriate return form is therefore one of the most important steps in the filing process.
Why salary TDS may not be enough
Many salaried individuals assume that because tax has already been deducted from their salary, no further tax obligations remain.
However, additional income from interest, rent, dividends or investments can increase total tax liability beyond the amount covered through salary TDS. In such cases, taxpayers may be required to pay advance tax during the year.
Failure to pay advance tax where applicable can attract interest under the Income Tax Act. The liability often comes as a surprise when taxpayers calculate their final tax dues while filing the return.
Claiming deductions or exemptions without proper documentation
Taxpayers sometimes claim deductions under sections such as 80C, 80D, home loan interest, or House Rent Allowance without maintaining supporting records. While documents are generally not required to be uploaded with the return, taxpayers must be able to produce them if asked by the tax department later. Incorrect claims can result in disallowances, additional tax liability and interest.
Most tax-related complications faced by salaried taxpayers arise not from complex tax provisions but from basic filing errors. Reporting all sources of income, reconciling tax records and selecting the correct return form can significantly reduce the chances of notices, delays and unexpected tax demands.
As the tax department’s data-matching systems become more sophisticated, accuracy during filing has become just as important as filing on time.