A step-by-step guide to filing timely and accurate income tax return

With the September 15 deadline about a fortnight away, begin now to avoid the last-minute rush and heightened risk of errors

The tax filing deadline of September 15 is about a fortnight away. If you have not started the process yet, it is high time you began to avoid last-minute stress and risk of errors.

 

Keep proofs, statements ready 

 

At the outset, taxpayers must determine whether the old or the new tax regime will be more beneficial for them. Next, they must get all paperwork in order. Some essential documents needed for filing returns include: Form 16, Form 26AS and the annual information statement (AIS); capital gains statements; bank interest certificates and statements; proof of tax-saving investments if you have opted for the old tax regime (proofs under Section 80C and Section 80G, health insurance receipts under Section 80D, home loan interest certificates, etc.); PAN, Aadhaar, and updated bank account details. Businesspersons should gather details of their income, and professionals should do the same for their receipts. Landlords should have details of their rental income.

 

Reconcile details with Form 26AS, AIS 

 

Next, match income details using Form 16, AIS, and Form 26AS.

 

“Reconcile AIS and Form 26AS with personal records to confirm that TDS, advance tax, and tax credits are reflected correctly,” says Sofiya Syed, direct tax division, Dewan P N Chopra & Co. Cross-check capital gains, dividend income, and interest earned to ensure that nothing is missed.

 

Enter deductions under Sections 80C, 80D, and 80G with proper details from investment proofs. “Include exemptions such as HRA, LTA, and home loan interest,” says Abhishek Soni, chief executive officer (CEO), Tax2Win.in. He also advises double-checking pre-filled data to avoid discrepancies and reduce the risk of tax notices.

 

Tax filers must also ensure that their PAN, Aadhaar, and bank account details are updated on the income-tax portal. The correct bank account details will enable timely refunds.

 

Prepare a personal checklist covering documents, income sources, deduction proofs, tax credits, and deadlines. “This reduces the risk of missing out on tax benefits and also helps avoid last-minute errors, repeated corrections, or notices from the tax department. A well-prepared checklist acts as a ready reference and brings discipline to the entire tax filing exercise,” says Syed.

 

Select the right ITR form

 

Selecting the right income-tax return (ITR) form is crucial. The choice of form depends on income type, sources, and taxpayer category.

 

“The golden rule is simple. Match your primary sources of income with the prescribed form. Choosing wisely will ensure smooth processing of your return and avoid complications with the tax department at a later stage,” says Syed.

 

“Filing with the wrong form can render your return invalid,” adds Soni.

 

Pick filing mode that suits you

 

You can file your ITR in three ways, depending on convenience and complexity. The first is offline utilities (Excel/Java/JSON). Download the utility, enter details manually, generate a JSON file, and upload it to the e-filing portal. This is best suited for tax professionals or those confident with offline tools.

 

The second is the income-tax e-filing portal. Log in to the official portal, review pre-filled data, and submit your return online. This is best for individuals with simple income structures.

 

The third option is to use a third-party software or platforms. “Third-party platforms or tax-filing services are the best choice when you are short of time. They offer guided filing, error checks, automated document import (like Form 26AS and capital gains statements), and expert assistance by chartered accountants, who can help you file quickly and accurately without last-minute stress,” says Soni.

 

Verification is mandatory

 

Once you have filed your ITR, it must be e-verified within 30 days of filing. Several methods are available. Aadhaar OTP is convenient and instant for those with Aadhaar-linked mobile numbers. Using net banking or a demat account, you can generate an electronic verification code (EVC) through pre-validated accounts. You can also send the ITR-V to CPC Bangalore. “This option is for those who prefer physical verification, by posting a signed ITR-V,” says Syed. Finally, you can use a digital signature certificate (DSC). This route is mandatory for companies, audit cases, and certain professionals.

 

Errors to watch out for

 

When taxpayers rush to file returns at the last minute, common errors include missing income from savings or fixed deposits, choosing the wrong form, and wrongly reporting deductions or exemptions. Lapses such as not updating bank details or failing to e-verify, which can invalidate the return, are also common.

 

“Mismatches between reported income and details in Form 26AS or AIS are common when taxpayers miss declaring interest, capital gains, or high-value transactions. Such discrepancies may trigger scrutiny, delay refunds, or lead to notices, interest, and penalties,” says Divya Baweja, partner, Deloitte India.

 

Mistakes in deduction claims

 

Many taxpayers make errors while claiming deductions under Sections 80C, 80D, and 24(b). Mistakes include claiming ineligible investments or personal expenses under Section 80C; including premiums for non-dependent relatives or payments made in cash under Section 80D; and claiming home loan interest under Section 24(b) without ensuring timely possession of the property.

 

“Starting this year, taxpayers must provide detailed information such as policy numbers, account numbers, and other particulars to claim deductions under Sections 80C and 80D. Any claim made without actual investment or expenditure is likely to be flagged and may attract scrutiny from the revenue authorities,” says Itesh Dodhi, director, Nangia & Co LLP.

 

Missteps in declaring capital gains 

 

Errors in reporting capital gains are frequent, particularly with mutual funds, stocks, and property transactions. Taxpayers often misclassify gains as short-term or long-term due to incorrect application of holding period rules.

 

“For mutual funds and equities, omissions such as not factoring in Securities Transaction Tax (STT) or ignoring grandfathering provisions for long-term gains are frequent. In property transactions, typical mistakes include overlooking the indexed cost of acquisition, excluding incidental expenses like stamp duty and brokerage, or reporting the sale proceeds in the wrong year,” says Baweja.

 

Incorrect bank details may stall refunds

 

Errors in bank details, such as a wrong account number, IFSC code, or account type, can delay tax refunds. “While the income-tax department now validates account numbers with banks to reduce such errors, refunds may fail or stay on hold if revalidation is required, causing delays,” says Baweja.

 

“Taxpayers must pre-validate their bank account on the e-filing portal and also report it in the return. Any mismatch or error can delay refunds, so details should be entered carefully,” adds Dodhi.

 

Miss deadline, pay penalties

 

If the return is not filed by September 15, 2025 (unless extended), the taxpayer may face a late filing fee of up to ~5,000 under Section 234F (depending on income), and interest at 1 per cent per month or part thereof on the unpaid tax under Section 234A.

 

“If the return is filed late, the taxpayer is also compulsorily shifted to the new tax regime, losing the option to claim deductions and exemptions under the old regime,” says Sujit Bangar, founder, Taxbuddy.com.

 

Correct mistakes with a revised return

 

If any error is found after filing, the taxpayer can file a revised return under Section 139(5) of the Income Tax Act, 1961. For FY 2024-25 (AY 2025-26), the revised return can be submitted by December 31, 2025 (unless CBDT extends the date). It is filed in the same manner as the original return, with the corrected details replacing the earlier information.

 

Not filing after the deadline has consequences

 

If the original deadline is missed, a taxpayer can still file a belated return under Section 139(4) by December 31, 2025 for FY 2024-25, but it attracts late fees of up to ~5,000 under Section 234F, interest, and restrictions such as no carry-forward of losses, delayed refunds, and slower processing.

 

“If both the due date and belated window are missed, the only option is an updated return (ITR-U) under Section 139(8A), which can be filed until March 31, 2030 but comes with strict conditions—refunds are not allowed, it must be filed under the new tax regime, and an additional tax of 25 to 70 per cent of the tax and interest is levied depending on the delay,” says Bangar.

 

Which ITR form is right for you?

 

ITR-1 (Sahaj): Salary, pension, one house property, and interest income; total income ≤ ₹50 lakh

ITR-2: Capital gains, foreign income/assets, multiple house properties; no business income

ITR-3: Business or professional income (freelancers, traders, professionals)

ITR-4 (Sugam): Presumptive taxation for small businesses and professionals

ITR-5/6/7: Firms, LLPs, companies, and trusts

(Source: Tax2win.in)