Common ITR Filing Mistakes

It's Nov 2025, and thousands of taxpayers who filed their ITR by the September 15 deadline are still waiting for their refunds. If you're one of them, this post is for you.

After analyzing hundreds of cases this filing season, I've identified the most common mistakes causing refund delays—and worse, triggering tax notices. Let me walk you through them.

1️⃣ Selecting the Wrong ITR Form

The Mistake: Using ITR-1 when you should be filing ITR-2 or ITR-3.

Why It Happens:

• Salaried individuals with ESOP gains incorrectly use ITR-1, resulting in defective returns

• Freelancers file ITR-1 instead of ITR-3, leading to blocked refunds

• Business owners use ITR-4 instead of ITR-3, triggering notices

Real Impact: Refunds can be delayed by 3–6 months, with the possibility of receiving a notice from the department

How to Avoid:

• Have capital gains? ➜ ITR-2

• Have business/professional income? ➜ ITR-3

• Using presumptive taxation? ➜ ITR-4

• Simple salaried income only? ➜ ITR-1

2️⃣ Mismatches with AIS/Form 26AS

The Mistake: Your declared income doesn't match what's reported in Annual Information Statement (AIS) or Form 26AS.

Why It's Critical: If your ITR doesn't match the AIS, even small errors can cause the system to hold your refund for checking

Common Scenarios:

• Your employer reports ₹12,50,000 in AIS, but you show ₹12,00,000

• Bank interest of ₹20,000 appears in AIS but not in your ITR

• Dividend income, mutual fund gains, or freelance income captured in AIS but missed in filing

Real Case: Anita, a salaried individual with FD income, didn't include ₹20,000 FD interest shown in AIS. Result: Refund was held and she received a notice

How to Avoid: ✅ Download and review your AIS/TIS before filing ✅ Cross-verify EVERY entry—salary, interest, dividends, capital gains ✅ Use the AIS feedback option to flag incorrect entries ✅ Reconcile TDS entries with bank statements

3️⃣ Bank Account Issues

The Mistake: Entering the wrong bank account number or IFSC code, which can delay tax refunds and create unnecessary follow-ups with banks

Other Banking Problems:

• Using a dormant or closed account

• Not pre-validating your bank account on the portal

• Account not linked with PAN/Aadhaar

How to Avoid: ✅ Pre-validate your bank account on the income tax portal BEFORE filing ✅ Double-check account number and IFSC code ✅ Use an active savings account linked to your PAN

4️⃣ Not E-Verifying Your Return

The Mistake: Filing your ITR but forgetting to e-verify it within 30 days.

Why It Matters: Your return is NOT considered filed until verified. No verification = No processing = No refund.

How to Verify:

• Aadhaar OTP (instant)

• Net banking

• Demat account

• Bank account number

• EVC through bank

⏰ Timeline: You have 30 days from filing to complete e-verification.

5️⃣ Claiming Deductions Without Proper Documentation

The Mistake: Many taxpayers claim deductions like HRA, Section 80C, or medical insurance without having proper proof, and if such claims are suspicious, the tax department may stop the refund and send a notice

Real Case: Rohit, a self-employed individual, forgot to claim medical insurance under Section 80D and ended up paying ₹15,000 extra tax

Common Missing Deductions:

• Section 80C: PPF, ELSS, life insurance

• Section 80D: Health insurance premiums

• Section 24(b): Home loan interest

• HRA: Without rent receipts or agreements

How to Avoid: ✅ Keep all investment proofs ready BEFORE filing ✅ Download interest certificates from banks/post offices ✅ Maintain rent receipts if claiming HRA ✅ Don't inflate claims—the system will catch it

6️⃣ TDS Mismatch or Missing TDS Credits

The Mistake: Sometimes Form 26AS or AIS shows TDS, but your employer or payer may not have filed it properly

What Happens: Your TDS credit doesn't reflect in Form 26AS, so the department doesn't see it when processing your refund.

How to Avoid: ✅ Check Form 26AS 2-3 weeks before filing ✅ If TDS is missing, contact the deductor immediately ✅ Wait for correction before filing, if possible

7️⃣ Ignoring Foreign Assets/Income Disclosure

The Mistake: Not disclosing that dormant overseas bank account or an ESOP from a foreign subsidiary, which must be reported

Who Needs to Report:

• Anyone with foreign bank accounts

• Foreign shares, ESOPs, or investments

• Foreign income or assets

Consequence: This triggers automatic scrutiny and can lead to penalties under the Black Money Act.

8️⃣ Filing Late or Rushing at the Deadline

The Mistake: The crucial final hours of the Income Tax e-filing portal on September 15-16, 2025, were marked by a systemic failure with millions encountering slow page loads, upload failures, and repeated crashes

Why Last-Minute Filing Hurts:

• Portal crashes under load

• No time to fix errors

• Mistakes slip through

• Higher chance of rejection

The Cost of Filing Late: Late fees of ₹5,000 under Section 234F, plus interest charges of 1% per month under Sections 234A/B/C

9️⃣ Not Responding to Tax Notices Promptly

The Mistake: Ignoring emails or SMS from the Income Tax Department asking for clarification.

Why It Matters: If your return is selected for scrutiny or if you get an assessment notice, your refund will be put on hold until the verification is complete, which can take longer than usual

How to Avoid: ✅ Check your registered email and mobile regularly ✅ Respond within the deadline mentioned in the notice ✅ Seek CA help if you're unsure about the notice

🔟 Outstanding Demands from Previous Years

The Mistake: You have unpaid tax from earlier years.

What Happens: If you owe tax from earlier years, the department may deduct it from your refund

How to Check: Log in to the income tax portal and check "Outstanding Demand" under your profile.

✅ The 2025 Refund Processing Reality

The Income Tax Department released ITR-1 and ITR-4 forms only in late May 2025, and the complex forms like ITR-2 and ITR-3 came out as late as July, which is a major reason for the backlog in return submissions and refund processing

The department has improved its systems to run automated checks with stricter scrutiny and more verification, using advanced AI technology to catch fake or inflated claims much faster

Current Timelines:

• Taxpayers who file early using simpler forms like ITR-1 or ITR-4 with correct details usually get refunds within 7 to 20 days

• Complex returns (ITR-2/3) with capital gains or HRA may take longer

📋 Your Refund Checklist Before Filing:

✅ Download AIS and Form 26AS—match EVERY entry ✅ Choose the correct ITR form for your income type ✅ Pre-validate bank account on the portal ✅ Disclose ALL income sources (interest, dividends, capital gains) ✅ Claim only genuine, documented deductions ✅ Report foreign assets if applicable ✅ E-verify within 30 days ✅ Respond to notices promptly

💡 Final Thoughts

Most refund delays in 2025 aren't due to system issues—they're due to filing errors that automated systems now catch instantly.

The good news? Almost all of these mistakes are preventable with careful preparation and attention to detail.

Remember: A refund delayed is money blocked. File correctly the first time, and you'll get your refund faster—without notices, without stress.

Have you received your refund yet? What was your experience this year? Share in the comments! 👇

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