Filing ITR for AY 2025-26? Avoid these common mistakes and new pitfalls

New ITR forms, stricter checks, filing your AY 2025-26 return? Here's what to watch out for to avoid delays, notices, or penalties

As the income tax filing season starts for assessment year 2025-26, taxpayers, especially salaried individuals and freelancers, must take into account a few critical changes in ITR forms and avoid some all-too-common mistakes. Even seemingly minor errors can lead to tax notices, delayed refunds, or additional tax liabilities.

 

“Even small errors can trigger a notice or scrutiny. Taxpayers must be cautious while choosing the right form, reporting income, and verifying details with official records like Form 26AS and AIS,” said Naveen Wadhwa, vice president at Taxmann.

 

Choosing the wrong ITR form

 

One of the most frequent mistakes is selecting the incorrect ITR form. This year, changes have been made to ease the process for small taxpayers. Individuals with long-term capital gains (LTCG) up to Rs 1.25 lakh under Section 112A can now file using the simpler ITR-1 or ITR-4, provided there are no carried-forward capital losses.

 

 

“Earlier, even small capital gains meant a more complex form like ITR-2 or 3 had to be used. The relaxation will benefit salaried taxpayers and small business owners,” Wadhwa said.

 

Not reporting all income sources

 

Many taxpayers ignore small income sources like savings bank interest, assuming they’re exempt. “People often skip disclosing interest from savings accounts, thinking it’s not taxable. But it is, and while deductions are available under Section 80TTA or 80TTB, the income must be reported first,” Wadhwa explained.

 

He added that failing to report dividend or interest income correctly may lead to discrepancies with AIS and result in notices.

 

Ignoring AIS, TIS, and Form 26AS

 

Before submitting your return, it is critical to cross-check the pre-filled information with your own records.

 

“Mismatch between the TDS claimed in your return and what appears in Form 26AS is a common reason for tax notices. Reviewing AIS and TIS ensures accuracy and saves future trouble,” he said.

 

Missing new reporting requirements

 

• The new ITR forms for AY 2025-26 include several fresh disclosures: 
• Revised LTCG tax rates (12.5 per cent under Sections 112 and 112A) for transfers after July 23, 2024 
• Aadhaar Enrolment ID no longer accepted 
• Detailed disclosures for opting out of the new tax regime and for income under the cruise shipping presumptive scheme

 

“Taxpayers need to be mindful of these updates, especially while reporting capital gains, dividend income, or deductions under new sections,” Wadhwa said.

 

What if you still make a mistake?

 

Returns can still be corrected after filing, but there are timelines and conditions.

 

“If a taxpayer makes a genuine mistake, a revised return can be filed under Section 139(5) by December 31, 2025, or before the assessment is completed, whichever is earlier,” Wadhwa said.

 

“However, intentional misreporting may attract a penalty of up to 200 per cent of the tax due.”