ITR Filing FY 2024-25: 7 Costly Mistakes to Avoid for a Hassle-Free Tax Season

ITR Filing FY 2024-25: For many of us, filing the ITR can be an arduous task which is why it is so crucial that we file our return without any errors to avoid receiving a notice from the Income Tax Department. At the start of the income tax return filing period, taxpayers are given additional time; in fact a 45-day extension to file their return.

The last date for filing ITR has not only been extended from July 31, to September 15, but the ITR forms have undergone significant structural changes as per the Budget 2024 announcement. However while the extension was helpful for several taxpayers, there still may be a chance that errors can occur in your returns. The following highlights the top 7 tax filing mistakes you should avoid, according to an ET report.

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1. Avoid Wrong ITR From

While filing returns, there are many mistakes that commonly occur. These include submitting wrong ITR forms, not verifying submitted returns, not filing returns in time or incorrectly believing that you do not have to file returns.

Another misconception that regularly arises, is while no tax was due or paid, you still must file returns. It is also mandatory to file your tax returns, if you spent greater than Rs 2 lakh in travel outside of India, or over Rs 1 lakh in electricity, or enough on other reasons, not included.

Moreover, you should always file returns in order to receive your tax/TDS refund or carry forward losses.

2. Overlooking AIS & Form 26AS Verification

A common mistake people make is that they do not verify their Annual Information Statement (AIS) and Form 26AS before submission. They display all the details of financial transactions and tax payments.

3. Incomplete Income Declaration

Failure to include income, whether intentional or not, could lead to serious cash consequences. These consequences could include fines of between 50-200% of the tax, additional interest, and possibly even criminal prosecution.

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4. Check for Budget 2024 changes

Taxpayers often make mistakes when submitting tax returns due to the amendments arising from Budget 2024. The restructured ITR will introduce new areas of compliance and with some changes to deductions and capital gains, we could see errors in calculation.

5. Omission of exempt income declaration

Although exempt income does not form part of taxable income, it still needs to be declared in the appropriate section (Schedule EI).

6. Overlooking previous employer's income

People changing jobs in the financial year will sometimes claim basic exemption and deductions twice. It normally occurs when the declarations of investment are sent to both employers, they might apply the basic exemption limit, prescribe the standard deduction and Chapter VI-A deductions, thereby reducing the TDS when lodging returns, which equates to an excessive tax benefit to the taxpayer.

7. Errors in HRA declarations

HRA claims must be documented as there are heavy penalties for errors in the claim with fines imposed at 200% of the wrongly declared value. Under the earlier tax rules, you are able to claim HRA exemption as part of your compensation package, if you are a salary staff member of the firm you can claim HRA exemption with supporting documentation in order to verify the claim. You should have a formal rent agreement, land lord receipts, an, PAN number from the landlord if you are paying rent of more than ₹1 lakh per annum, all submitted to the employer, and actually reside in a rented premises.

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