India tax filing guide warns of common ITR mistakes and form rules

Tax experts in India caution that selecting the wrong Income Tax Return (ITR) form can trigger notices, processing delays and penalties. ITR‑1 is limited to salaried individuals with modest income and no capital gains, property sales, business income, F&O trading, foreign assets, unlisted shares or directorships. Taxpayers with short‑term equity gains, long‑term capital gains above ₹1.25 million, income from multiple properties, freelance or consultancy earnings, or any foreign holdings must use ITR‑2, ITR‑3 or ITR‑4 instead.

Common filing errors also lead to refunds being held up or additional tax demands. Mistakes include claiming incorrect deductions, using the wrong assessment year, providing inaccurate personal details, omitting income sources such as interest, rent or dividends, entering data in the wrong format, failing to reconcile Form 26AS and Form 16, ignoring AIS/TIS statements, not consolidating multiple Form 16s after a job change, overlooking HRA claims, missing advance tax payments, skipping e‑verification within 30 days, and not disclosing Schedule AL or Schedule FA information for high‑value assets or foreign holdings. Following the outlined checks can help taxpayers avoid notices and ensure timely refunds.