Most mistakes are mismatches
The tax department already knows a great deal about your year before you file. Your Annual Information Statement (AIS) lists salary, interest, dividends, mutual fund redemptions, share sales, property deals and the TDS on each. Form 26AS shows the tax credited to your PAN. When your return disagrees with these, the system notices, and that is where most notices come from.
So the habit that prevents most errors is simple: download the AIS from the income-tax portal before you start, and go through it line by line.
The mistakes, and the fixes
1. Leaving out interest
Savings-account interest, fixed-deposit interest, recurring deposits and interest on a tax refund all count as income. A bank deducts 10% TDS on FD interest, and many people assume that settles it. It does not if you are in the 20% or 30% bracket: the rest is due when you file. FD interest is taxed each year as it accrues, even on a cumulative deposit that pays out only at maturity.
Fix: take every interest line from the AIS and add the balance tax due. The TDS calculator shows what was deducted; your slab decides what you owe.
2. Not reporting fund switches and redemptions
A switch from one fund to another, a systematic transfer plan and a systematic withdrawal plan are all redemptions. Each unit sold creates a gain or loss, dated by its own purchase. The AIS will show these sales even if the money never reached your bank.
Fix: get a capital-gains statement from CAMS or KFintech for the year and report every scheme. Equity fund gains held over 12 months are taxed at 12.5% beyond the first ₹1.25 lakh a year; held 12 months or less, at 20%. Gains on debt funds bought after 1 April 2023 are taxed at your slab rate, however long you held them. How mutual funds are taxed has the full table.
3. Using the wrong ITR form
ITR-1 is for resident individuals with salary, one house property and total income up to ₹50 lakh. It can now carry long-term gains on listed equity and equity funds only up to ₹1.25 lakh. Short-term gains, larger long-term gains, more than one house, or losses to carry forward need ITR-2. Business or professional income needs ITR-3 or ITR-4.
Fix: pick the form after listing your income sources, not before. A return on the wrong form can be treated as defective.
4. Choosing the regime without checking
The new regime has been the default since AY 2024-25. If you want the old regime, you must opt for it. Claiming Section 80C, 80D or HRA under the new regime does nothing; those deductions only exist under the old one. A salaried person can change regime every year when filing. Someone with business income can only switch back from the old regime once.
Fix: run both regimes before filing. The old vs new regime calculator shows how many deductions you need for the old regime to win, and choosing your tax regime covers the rules.
5. Filing late
The due dates now are:
| Who | Due date |
|---|---|
| ITR-1 and ITR-2 filers (salary, pension, capital gains) | 31 July |
| Business or profession without a tax audit, and trusts | 31 August |
| Belated return, anyone | 31 December |
The 31 August date for non-audit business cases applies from 2026; before, they shared 31 July.
A late return costs a fee of up to ₹5,000 (₹1,000 if total income is ₹5 lakh or less) plus 1% a month interest on unpaid tax. The cost people miss is losses. A capital loss or business loss can be carried forward for eight years only if the return is filed by the due date. A belated return lets you set off this year's losses against this year's gains but throws away the rest.
Fix: file on time even if something is uncertain; you can revise it. If you harvested losses, the tax-loss harvesting calculator shows how much is at stake.
6. Forgetting to e-verify
A return is not complete until it is verified. You have 30 days after uploading it to e-verify through Aadhaar OTP, net banking or a pre-validated bank account. Miss that and the return can be treated as never filed.
Fix: verify on the same day you upload.
7. A refund that cannot be paid
Refunds go only to a bank account that is pre-validated on the portal and linked to your PAN. A closed account or a name mismatch leaves the refund stuck.
Fix: check the account is pre-validated before filing.
8. Advance tax that was not paid
If your tax for the year, after TDS, is ₹10,000 or more, you were supposed to pay advance tax in four instalments. A large capital gain or rental income is the usual trigger for salaried people. Paying it all at filing time adds interest.
Fix: pay as gains happen. Advance tax and TDS explains the instalment dates and the interest.
9. Not reporting foreign assets
A resident who holds RSUs, foreign shares or a foreign bank account must declare them in Schedule FA, even if they earned nothing that year. This applies to many employees of multinational companies and is commonly missed.
Fix: if you hold anything abroad, use ITR-2 or ITR-3 and fill Schedule FA.
Fixing a return after filing
The rules for correcting a return changed this year:
| Option | Time limit | Cost |
|---|---|---|
| Revised return | Until 31 March following the tax year | Free until 31 December; then ₹1,000 (income up to ₹5 lakh) or ₹5,000 |
| Updated return | Up to four years after the end of the assessment year | Additional tax of 25% to 70% of the tax and interest due, rising with the delay |
An updated return can only increase the tax you pay; it cannot claim a bigger refund or a new loss. A revised return can do either.
This post is educational, not tax advice; tax rules and due dates change, so check the income-tax portal or a professional for your case.
Frequently asked questions
What happens if I miss the 31 July ITR deadline?
You can file a belated return until 31 December, with a late fee of up to ₹5,000 (₹1,000 if total income is ₹5 lakh or less) and interest on any unpaid tax. You also lose the right to carry forward that year's capital or business losses, which is often the bigger cost.
Can I correct a mistake after filing my return?
Yes. Since 1 April 2026, a revised return can be filed up to 31 March, twelve months after the end of the tax year, instead of 31 December. Revising after 31 December carries a fee of ₹1,000 if total income is up to ₹5 lakh and ₹5,000 otherwise. After that, an updated return is possible for some years, with additional tax.
Is switching between mutual fund schemes taxable?
Yes. A switch is a redemption from one scheme and a purchase in another, so it creates a capital gain or loss in the year it happens and must be reported, even though no money reached your bank account.
This is commentary on published data, not investment advice. WealthTicker is not a SEBI-registered adviser or distributor. Figures are as of the dates stated and can be revised by their source.
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