5 Income Tax Return Filing Mistakes That May Land You In Serious Trouble

by Guest on August 11, 2017

While the ITR due date is approaching, if you have not filed ITR before, you are prone to making mistakes on your very first tax return. Here are some common mistakes you probably make when you need to e-file tax, which could land you in serious trouble or cause you to receive a notice from the Income Tax Department of India. Therefore, it is prudent to avoid all such mistakes.

Choosing the wrong form for filing ITR

There are different forms issued by the IT department, which are applicable to you and others as an individual and organization, respectively. You, as an individual, need to report all sources of your income to the IT department through your ITR form and the key here is that you need to make sure you fill out the right form. If you unknowingly fill out the wrong ITR form and submit it, it is cancelled automatically and termed as defective.

Failure to report interest income

When online tax filing returns for the previous financial year, make sure you report all your interest income, accrued or received from any source, including the interest you earned on your savings bank account(s), fixed deposit(s), recurring deposit(s), etc. You need to provide the required information under the heading ‘Income from other sources’.

Remember, any undeclared income or hidden sources of income could lead to serious trouble in the future and might result in a notice from the IT department.

Overlooking ITR filing

There are people who prefer not to file their income tax return, as they possess long-term capital gains that are tax exempt.

The recent amendments to the IT section 139(1) state that one needs to file their income tax return if their gross total income along with the income from long-term capital gains exceeds the minimum tax-exempt level.

Incomes not clubbed

If we stick to the income clubbing rules, your total income tax liability is calculated, based on the total income of various family members (including that of your spouse and minor children). This also means that the amount of money you have to pay in tax comprises the total income tax liability. And, you have to report this total income when income tax filing for the particular financial year. Under the income tax sections 60 to 64, the income of a minor child has to be added to that of the parents.

Based on the clubbed income, an exemption of up to Rs. 1500 can also be availed, subject to the IT section 10(32). A failure of clubbing a minor child’s income requires you to pay your income tax dues with the interest applicable, including a penalty of 50% or 100% subject to underreporting or misreporting of the income.

Hiding income from your previous job

If you changed jobs during the year, then you also need to make note of this when filing your income tax return. Any discrepancy in your ITR form if you fail to mention your income from a previous employer does appear in the TDS you receive, i.e. form 16 and/or 26AS. This might result in you receiving a notice from the IT department of India or bring the taxman to your doorstep. Certain penalties are also applicable, in case of not clubbing the income.


Anyone who has a certain source of income whether it is the house rent, interest earned on savings account(s) in one or more banks, or a full-fledged business needs to report their exact gross annual income along with one or more tax-saving investments to the IT Department in order to prevent penalties or legal action.

If you want to stay out of trouble, it’s best to always be honest when filing your ITR.

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