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Income Tax Return: Avoid These 5 ITR Filing Mistakes or You Could Receive an Income Tax Notice

Posted on 27th Jul 2026 02:30 pm by rohit kumar

Taxpayers rushing to file their Income Tax Return (ITR) before the deadline often make small but costly mistakes that can invite an Income Tax Department notice. With AI-powered scrutiny and data matching, even minor discrepancies in income, tax deductions, or investments can trigger an alert.

 

The Income Tax Department now cross-checks your ITR with AIS (Annual Information Statement), Form 26AS, bank accounts, fixed deposits, mutual fund investments, stock market transactions, and property records, making accurate filing more important than ever.

 

How a Small Mistake Can Lead to an Income Tax Notice

 

Many taxpayers assume filing the return before the deadline is enough. However, missing details such as capital gains from shares, fixed deposit interest, or other income can result in a tax notice.

 

The Income Tax Department's AI-driven system automatically detects mismatches between your declared income and financial records, increasing the chances of scrutiny for inaccurate returns.

 

5 Mistakes to Avoid While Filing Your ITR

1. Select the Correct ITR Form

 

Selecting the wrong ITR form can make your return defective.

 

ITR-1 (Sahaj): Salary, one house property, bank interest, income up to ₹50 lakh.

ITR-2: Capital gains from shares, mutual funds, or property sales.

ITR-3: Business or professional income with books of accounts.

ITR-4 (Sugam): Small businesses and freelancers under Sections 44AD and 44ADA.

2. Match AIS and Form 26AS Before Filing

 

Always download and compare your AIS and Form 26AS with your ITR.

 

If you find incorrect information in AIS, submit feedback on the Income Tax portal before filing your return.

 

3. Report Every Source of Income

 

Do not ignore:

 

Savings account interest

Fixed deposit interest

Freelance income

Capital gains from shares or mutual funds

Rental income

 

Even small amounts can be detected through AI-based verification.

 

4. Avoid Fake Deductions and Wrong Claims

 

Never claim false deductions for:

 

HRA

Section 80G donations

Other unsupported tax exemptions

 

The department can easily verify these claims using digital records.

 

5. Complete E-Verification

 

Filing the return alone is not enough.

 

You must e-verify your ITR within 30 days through Aadhaar OTP, net banking, or other approved methods. Failure to do so can make your return invalid and may attract a penalty.

 

Select the Right Tax Regime Carefully

 

The new tax regime is the default option. Taxpayers who wish to claim deductions for PPF, HRA, home loan interest, and other exemptions should ensure they opt for the old tax regime while filing their return.

 

What to Do If You Receive an Income Tax Notice

 

If you receive a notice:

 

Read the notice carefully.

Verify its authenticity on the official Income Tax e-filing portal.

Download it from Pending Actions > e-Proceedings.

Submit a point-wise reply with supporting documents such as bank statements, investment proofs, and receipts.

Keep the acknowledgement for future reference.

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