ITR: List of Income Tax Filing Mistakes To Avoid In FY23 For Both Old & New Tax Regime

The final day for filing an Income Tax Return (ITR) in FY 2022-2023 is July 31 and the new assessment period 2023-2024 has been in force from April 1.The revised ITR forms are available on the Income Tax website and were announced by the CBDT on February 10.The option to file your return will be accessible until July 31; after that date, you will need to submit a belated ITR which will be subject to penalty.In order to avoid the unnecessary weight of penalties and legal consequences, taxpayers have started to accelerate through the process of completing their ITR as the deadline approaches.Taxpayers must avoid a number of mistakes while filing an ITR, including filling out the improper ITR Form, providing incorrect details, pre-validating bank accounts, and more.After consulting different tax-experts, here is the list of income tax filing mistakes to avoid in FY23.
Income tax filing can be a complex and daunting task, but avoiding common mistakes can help you navigate the process smoothly.Whether you are opting for the old tax regime or the new regime introduced in recent years, it’s crucial to be aware of the potential pitfalls to ensure accurate and hassle-free tax filing in 2023.
Incorrect Information: Providing incorrect information can lead to complications and potential penalties.Double-check all the details entered in your tax return, including personal information, PAN number, bank account details, and tax calculations.Ensure that you accurately report your income from all sources, including salary, investments, rental income, and other earnings
Ignoring Form 26AS: Form 26AS is a consolidated statement that reflects the tax credits associated with your PAN.

Many taxpayers overlook this crucial documentReview your Form 26AS before filing your tax return to verify that the tax deducted at source (TDS) and advance tax payments are correctly credited.Any discrepancies should be resolved before filing your return
Neglecting Deductions and Exemptions: Both the old and new tax regimes offer various deductions and exemptions that can significantly reduce your taxable income.Familiarize yourself with the applicable deductions, such as Section 80C for investments, Section 80D for health insurance premiums, and Section 24(b) for home loan interest.Ensure you claim all eligible deductions to minimize your tax liability
Failing to File on Time: Missing the tax filing deadline can result in penalties and interest charges.For the assessment year 2023-24, the due date for individuals is generally July 31, 2023.However, it’s advisable to stay updated with any official announcements or changes.

Mark your calendar and file your tax return well before the deadline to avoid last-minute rush and potential errors
Disregarding the New Regime Calculation: If you choose to opt for the new tax regime, be cautious when calculating your taxable incomeThe new regime offers lower tax rates but eliminates most deductions and exemptions.Calculate your tax liability accurately based on the applicable tax slabs and ensure that you haven’t mistakenly included deductions that are not allowed under the new regime
Overlooking Tax-Saving Investments: Saving taxes through investments is an essential aspect of tax planning.Evaluate the available tax-saving investment options, such as National Pension Scheme (NPS), Public Provident Fund (PPF), and tax-saving fixed deposits.Plan your investments strategically to maximize tax benefits and optimize your overall financial portfolio
Non-Compliance with Tax Notices: If you receive any tax notices from the Income Tax Department, it’s crucial to respond promptly and appropriately.Ignoring or mishandling tax notices can lead to penalties, scrutiny, and legal consequences.Seek professional advice if you are unsure about how to respond to a tax notice.
Remember, filing your income tax return accurately and on time is your responsibility as a taxpayer.

Individuals can also utilize assisted platforms like TaxNodes to safeguard against tax filing errors in both the old and new tax regimesBy embracing these resources, tax payers can navigate the complexities of taxation with confidence, ensuring accurate submissions and minimizing the risk of costly mistakes.
Individuals are required to file income tax returns (ITR) for assessment year 2023-2024 by 31st July 2023.As the deadline is approaching, taxpayers have begun to rush through the process of filing their ITR in order to avoid the unnecessary burden of penalties and legal consequences.Such hastiness, at times, can expose the taxpayers to unnecessary consequences.Thus, following are some of the common income tax filing mistakes which should be avoided:
a.Choosing incorrect ITR form
One of the most common mistakes which a taxpayer may commit would be to select an incorrect ITR form for the purpose of furnishing their tax returns.Every taxpayer would be required to consider the eligibility criteria while selecting correct ITR form applicable to him/her.Selection of ITR would be based on certain factors such as the nature of income, number of sources of income, taxpayer opting for presumptive scheme, etc.Selection of correct ITR form is very vital as income-tax return furnished in wrong ITR form would be considered as defective/ invalid and the consequences of non-furnishing of return may apply.
b.Mentioning incorrect personal other details:
Taxpayers should be careful while providing their personal details such as Date of birth, email id, contact number any error in such details may lead to an incorrect return.

For instance, mentioning wrong date of birth may deprive the taxpayer of the beneficial rates applicable to citizen or senior citizenThe taxpayer may not be in receipt of the correspondence, if any, made by the income tax authorities in case of wrong email id or contact details.Further, the taxpayers should ensure that the correct year is selected as the concept of financial year and assessment year may be confusing for the layman taxpayers.
c.Pre-validation of the Bank Details:
The taxpayers should specify correct bank details such as bank account number, IFSC code and BSR code, etc.Such bank details should be mandatorily pre-validated so as to avoid any mistakes while quoting bank details which can delay income tax refunds.
d.Discrepancy in TDS details:
The taxpayer should verify the details of transactions as maintained by him (via bank statements, books of accounts etc.) with Form 26AS, Annual Information Statement (AIS), Tax Information Summary (TIS), Form 16 (TDS certificate for salary income), form 16A (TDS certificate for other than salary income) etc.A thorough verification is compulsory as in case of any mismatch between the details provided in the income tax return vis-à-vis in Form 26AS/ AIS/ TIS, etc., the taxpayers may end up getting a tax notice.
e.Clubbing Provisions:
Most of the times, a taxpayer may miss out on including their minor children’s income which is otherwise liable to be included in their total income.Thus, taxpayers must consider the clubbing provisions as mentioned in the Income Tax Act, 1961 (hereinafter referred to as ‘the IT Act’) while furnishing their tax return.
f.Claiming deductions and exemptions:
Taxpayers may mitigate their tax liability using various tax deductions and exemptions as provided in the IT Act.However, such deduction/ exemption amount should be correctly computed after considering the tax regime, residential status, quantum of deduction available etc.

Further, evidences of contribution/ expenses such as insurance premium, interest payment, loan repayment etcand record other tax-savings investments based on which such deduction or exemption has been claimed should be maintained by the taxpayers.
Filing income tax can be cumbersome for individuals who plan to follow a do-it-yourself approach.The most important ITR filing factor to remember is to account for all your investments including the interest that you accrue from your other sources of income such as capital gains from the markets, house rent and the capital credited in your savings accounts.
The other common and totally avoidable income tax mistakes include:
Choosing the wrong assessment year
Entering incorrect bank account details
Filing ITR on an incorrect form
Forgetting to verify the income tax returns after filing
When filing your income tax return (ITR), it’s crucial to avoid common mistakes that can lead to inaccuracies or complications.Here are some key points to consider:
1.Report all sources of income accurately: Ensure that you report all income sources, including salary, investments, rental income, and any other applicable earnings.
2.Include details from previous employers: Don’t forget to include income details from previous employers and accurately mention the information provided in Form 16.
3.Pay attention to Tax Deducted at Source (TDS): Be diligent in reporting TDS details and include them in your ITR to avoid discrepancies.
4.Declare interest income: Remember to disclose interest earned from savings accounts, fixed deposits, bonds, or any other interest-bearing investments

Claim eligible deductions and exemptions: Take advantage of deductions and exemptions available to you, such as investments under Section 80C, medical insurance premiums, and other applicable tax-saving options.
6Consider foreign assets and income: If you have foreign assets or income, ensure that you properly report them as per the tax regulations.
7.Verify and submit ITR within the due date: After filing your ITR, double-check the information for accuracy and submit it within the specified deadline.
8.Be mindful of filing deadlines: Stay aware of the deadlines for filing ITR and avoid any delays to prevent penalties or complications.
9.Review Form 26AS: Pay attention to Form 26AS, which provides details of taxes deducted at source, helping ensure accurate filing.
10.Disclose rental income and claim related deductions: If you receive rental income, accurately report it and consider deductions associated with home loans or house property.

Report capital gains correctly: When selling investments or property, accurately report any capital gains to avoid errors.
12Provide accurate bank details: Double-check the bank account details mentioned in the ITR, including the account number and IFSC code.
13.Report income from all bank accounts: Remember to report income from all bank accounts, including interest earned, to ensure comprehensive reporting.
14.Mention foreign income and assets: If you have income from foreign sources or hold foreign assets, make sure to disclose them as required.
15.Stay informed about eligible deductions: Stay updated on eligible deductions, such as Section 80C, and claim them appropriately to optimize your tax liability.
16.ITR even if income is below the taxable limit: It’s essential to file your ITR even if your income falls below the taxable limit, as it can be beneficial for various purposes like loan applications, visa processing, etc.
Whether you choose the old tax regime or the new tax regime while filing your income tax return in 2023, it is crucial to steer clear of common mistakes.

Ensure that all the details you provide in your income tax return are accurate and completeDouble-check personal information, income sources, deductions, and exemptions to prevent errors.Disclose all sources of income, including salary, rental income, capital gains, interest, dividends, and any other earnings during the financial year.Neglecting to report any income may lead to penalties or scrutiny by tax authorities.Review Form 26AS, which is a consolidated statement displaying details of tax deducted at source (TDS), advance tax payments, and self-assessment tax.Verify the information in Form 26AS to ensure it matches your income sources.
Familiarize yourself with eligible deductions such as Section 80C (investment schemes), Section 80D (medical insurance premiums), and Section 24(b) (home loan interest), among others, in order to reduce your tax liability.If you possess foreign assets or financial interests, ensure compliance with reporting requirements.Failure to disclose or incorrectly report foreign assets can result in penalties.

Maintain consistency between the information provided in your income tax return, form 16 (provided by your employer), and Form 16A (TDS certificates).
Keep proper documentation of your income, expenses, investments, and deductionsRetain supporting documents such as bank statements, investment statements, rent receipts, medical bills, and donation receipts for future reference and in case of scrutiny.These were the few tips to avoid the mistakes.It is advisable to seek professional advice or consult a tax expert to ensure accurate and compliant income tax filing.