Avoid These Mistakes While Filing ITR, or You May Face a Fine of Up to ₹1.5 Lakh

If you file your Income Tax Return (ITR) every year, this advisory is important for you. Following the release of Form-16 by employers, many taxpayers have started filing their ITRs. This year, the deadline for filing ITRs has been extended from July 31 to September 15. Tax experts warn that even minor errors during the filing process can lead to serious consequences — including hefty penalties, refund delays, or notices from the Income Tax Department.

In some cases, you may face a fine of up to ₹1.5 lakh. Let’s take a look at some of the most common mistakes taxpayers make while filing their returns.

1. Choosing the Wrong ITR Form

The most common error is selecting the incorrect ITR form. Each form is designated for a specific category of taxpayers:

• ITR-1: For salaried individuals with an annual income of up to ₹50 lakh

• ITR-2: For individuals with capital gains or foreign assets

• ITR-3: For individuals engaged in business or profession

• ITR-4: For those opting for presumptive taxation

Filing a return using the wrong form makes it ‘defective’, and it must be corrected within 15 days. Failing to do so could result in the return being declared invalid.

2. Ignoring E-Verification

Once the return is filed, it must be e-verified within 30 days. This can be done using Aadhaar OTP, net banking, or through a demat account. If e-verification is not possible, taxpayers must send the signed physical copy of the ITR-V to the CPC office in Bengaluru. Without proper verification, the return is treated as incomplete and invalid.

3. Penalty and Fines

• Late Filing: A penalty of ₹5,000 can be levied if your income exceeds ₹5 lakh and you file after the deadline. For those with income below ₹5 lakh, the penalty is ₹1,000.

• Incorrect Information: A fine of up to 50% of the tax amount may be charged for incorrect disclosures.

• Wilful Misreporting: In severe cases, the penalty can be as high as 200% of the tax due.

• Business Owners: Failure to submit books of account or an audit report on time may attract a penalty of up to ₹1.5 lakh.

Filing your ITR accurately and on time is not just a legal obligation — it also ensures timely refunds and helps maintain a clean financial record. With the extended deadline, taxpayers have more time to avoid mistakes and file correctly. However, it is crucial to remain vigilant and follow all required procedures.

For any uncertainties, consulting a certified tax consultant is highly advisable.