ITR Filing Mistakes: The deadline for filing income tax returns for the financial year 2024-25 has been extended to September 15, but salaried people should not wait till the last moment. The forms are already available, and it’s always better to start the process early. Waiting till the last few days can lead to panic, small errors, or even portal issues. Many people face technical glitches when too many users log in at once.
This year, the income tax forms have changed quite a bit, and some new rules from the Budget 2024 have already been added into the forms. For example, salaried people who earlier used only ITR-1 will now find that even those who made some long-term capital gains from listed shares or equity mutual funds if the total gains are less than ₹1.25 lakh can also use ITR-1. This was not allowed in earlier years.
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However, you cannot use ITR-1 under certain conditions:
• Your total income exceeds Rs 50 lakh
• Your capital gains under section 112A exceed Rs 1.25 lakh
• You are a director in a company
• You own unlisted equity shares
• Have drawn foreign income during the financial year
• Own any foreign accounts or assets (including financial interest in any entity)
• If payment or deduction of tax has been deferred on ESOP
• If you have brought forward loss or loss to be carried forward under any head of income
If such cases, you will have to use ITR-2, which is meant for individuals without any income under the head ‘profits and gains from business or profession’.
ITR Filing Mistakes: Choosing the right form
Most salaried people usually choose ITR-1 or ITR-2 to file returns. But you can’t just pick any form. If you have any kind of trading income like intra-day trades or futures and options (F&O), you cannot file your return using ITR-1 or ITR-2. These incomes are treated as business income, and you will have to use ITR-3 for that. This form is for people who have income from business or profession.
If you fall under that category, then you must file your return accordingly. And if you choose presumptive taxation and you follow the required conditions, then you should use ITR-4, also called Sugam. But not everyone can use ITR-4. If you are a director in a company, hold unlisted shares, or earn from outside India, then you are not allowed to use ITR-4.
Choosing the wrong form can lead to rejection or notices from the tax department. So it’s better to understand your income sources properly and file using the correct form.
Claiming fake deductions can lead to trouble
Many people try to get bigger refunds by claiming deductions they can’t actually prove. For example, they may say they invested under Section 80C or paid for health insurance under Section 80D without any actual proof. Some also claim to donate to political parties just to reduce taxes. The problem is that while filing the return, you don’t have to upload any proof. So some people misuse this part. They don’t declare these investments to their employer but still claim deductions in the return.
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But this trick is now being caught by the Income Tax department. They are using the Annual Information Statement (AIS) and artificial intelligence tools to check if your claims match your actual financial records. Many taxpayers have already got notices asking them to submit proof or explain mismatches.
If you receive a notice and you don’t have documents to support your claims, you might have to pay extra tax or even a penalty.
