As tax season kicks off, individual taxpayers have received a breather—the deadline for filing Income Tax Returns (ITR) for FY 2024-25 (AY 2025-26) has been extended from 31st July to 15th September 2025. This 45-day cushion is primarily to accommodate structural changes in ITR forms announced in Budget 2024. However, while this extension offers more time, it also increases the likelihood of errors if you’re not cautious with the new rules and compliance requirements.
Despite the improvements in digital tax filing—from pre-filled forms to real-time validation—errors can still creep in due to incorrect data confirmation, misunderstanding new provisions, or skipping key verifications. Below is a breakdown of the most common mistakes and how you can avoid them.
1. Using the Wrong ITR Form or Not Filing at All
Selecting the correct ITR form is crucial. Each form is aligned with specific income types and taxpayer categories. For example, if your long-term capital gains (LTCG) from equities are up to ₹1.25 lakh, you can still use ITR-1—a new relaxation introduced this year.
Many believe they don’t need to file if they have zero tax liability. However, you must file if you’ve spent over ₹2 lakh on foreign travel or over ₹1 lakh on electricity, even if your taxable income is below exemption limits. Filing is also mandatory if you’re expecting a refund, have carried forward losses, or need financial documentation for loans or visas.
2. Ignoring Budget 2024 Changes
The latest budget has significantly revamped tax calculations, particularly around capital gains. From 23 July 2024 onwards:
- LTCG on listed shares and equity mutual funds is taxed at 12.5% without indexation.
- STCG on the same is taxed at 20%, up from the earlier 15%.
ITR forms now require bifurcation of gains before and after 23 July 2024. Additionally, you must now opt explicitly for the old tax regime by filing Form 10-IEA; otherwise, the new regime becomes default. Aadhaar number is mandatory—Aadhaar enrolment IDs are no longer accepted.
3. Not Checking Form 26AS and AIS
These two documents are your tax return’s mirror:
- Form 26AS reflects TDS/TCS, tax payments, and high-value transactions.
- AIS (Annual Information Statement) provides a more detailed view, including income from FDs, dividends, securities, foreign transfers, and rent.
Always reconcile them with your Form 16, bank statements, and investment proofs to avoid underreporting, duplicate claims, or missed TDS entries.
4. Not Disclosing All Sources of Income
It’s easy to miss or overlook income that’s not actively tracked:
- Interest from savings accounts, FDs, or sovereign gold bonds.
- Rental income below ₹50,000/month (hence, no TDS).
- Capital gains from mutual funds or real estate.
- Freelance or foreign income.
Be especially careful about income from assets transferred to a spouse or income earned by minor children. Misreporting or underreporting could attract penalties ranging from 50% to 200% of the tax due, plus interest.
5. Failing to Report Exempt Income
Just because income is exempt doesn’t mean it should be ignored. Agricultural income, PPF interest, tax-free bonds, gratuity, commuted pensions, EPF proceeds, and certain life insurance payouts must all be disclosed under Schedule EI. Non-reporting may lead to your return being considered defective, triggering notices or delays.
6. Not Accounting for Income from Previous Employer
Changed jobs in FY 2024-25? Double-check the following:
- Basic exemptions and deductions like ₹75,000 (new regime) or Chapter VI-A benefits may be claimed twice, reducing TDS artificially.
- Obtain and consolidate Form 16s from all employers.
- Cross-verify tax deductions in Form 16 with Form 26AS.
- Ensure accurate reporting of gratuity, arrears, bonuses, and leave encashment, especially when limits are exceeded.
7. Errors in HRA Claims
The Income Tax Department is scrutinizing fraudulent HRA claims. To stay compliant:
- Provide a valid rent agreement and PAN of landlord (if rent > ₹1 lakh/year).
- Keep proof of bank transfers for rent.
- Ensure the rental address aligns with your Aadhaar and official documents.
Fake PANs or unverifiable claims may lead to fines up to 200% of the misreported amount. If you don’t receive HRA from your employer but pay rent, consider claiming deduction under Section 80GG, within limits and conditions.
Key Tax Filing Deadlines You Can’t Miss
| Date | Deadline For |
|---|---|
| 15 Sep 2025 | Salaried taxpayers and non-audit cases (AY 2025–26) |
| 31 Oct 2025 | Individuals and professionals requiring audit |
| 31 Dec 2025 | Last date for belated or revised returns |
| 31 Mar 2030 | Last date to file updated return for FY 2024–25 |
Penalties: Late filing attracts ₹1,000 (income < ₹5L) or ₹5,000 (income > ₹5L) under Section 234F. Interest @1% per month applies for unpaid taxes. Severe delays may even lead to prosecution under Section 276CC.
Final Thoughts
This year’s extended tax filing window gives you the opportunity to adapt to the changes brought by Budget 2024. But it also demands increased diligence. Ensure you’re using the correct ITR form, reconciling all income and TDS data, understanding updated tax rates, and complying with mandatory reporting requirements—even for exempt incomes.
Avoiding these common mistakes not only protects you from penalties and notices but also ensures quicker processing and refunds. Make the most of the time available—file accurately, file early, and stay compliant.
ReviewSpire 
Leave a comment