ITR Filing: These Mistakes Can Lead to a Tax Notice:

ITR Filing: These Mistakes Can Lead to a Tax Notice The last date to file ITR for the FY 2024-25 is September 15. Taxpayers should stay alert even after filing their returns. Many people receives notices from the Income Tax Department due to simple mistakes or mismatched information. This year over 1.65 lakh cases have been selected for checking detailed assessment.

Mismatch in TDS and Income Details

If there is any mismatch between the income shown in the return and the TDS details in Form 26AS or the Annual Information Statement (AIS), it may result in a problem. This mainly happens when the income details are not properly matched. Salaried people and freelancers often face this issue.

Leaving Out Any Source of Income

Not properly disclosing every source of income can also be a reason for a notice. This involves income from the savings account interest, fixed deposits, rental income or profits that are made from the sale of shares, crypto or foreign investments. Even if some income is not taxable, it still requires to be mentioned in the return.

Claiming Deductions Without Proof

Claiming the deductions without any proof will lead to penalties. For example, deductions which are under sections like 80C, 80D, or House Rent Allowance (HRA) need proper documents. If the claimed deductions are found to be incorrect, there may be a penalty of 50% for under reporting and up to 200% if the information is false.

Big Drop in Income Without Reason

A sudden decrease in income compared to the previous years can raise a red flag. If someone's income falls sharply, then the tax department may ask for proof like new salary or job loss letters. Not reporting high-value transactions is another reason for a notice. These include:

• Deposition of Rs. 10 lakh or more in cash in a year.
• Paying credit card bills over Rs. 2 lakh.
• Investment of Rs. 2 lakh or more in mutual funds.
• Buying bonds or debentures worth Rs. 5 lakh or more.
• Investment over Rs. 1 lakh in shares.
• Buying or selling property above Rs. 30 lakh.
• Investing more than Rs. 5 lakh in RBI bonds.

If any of these are not reported in the ITR, the tax department may take notice.

Not Disclosing Income from Job Change

If you changed your job and have not reported the income properly from both employers then it will be counted as a mistake. If both the companies have given Form 16 and the income is not combined while filing then it may cause a mismatch and result in a notice.

Filing ITR with the Wrong Form

Using the wrong ITR form is also a common issue. Every ITR form is made for a specific type of taxpayer. If someone filed using the wrong form then some income might jot he shown correctly. This is treated just like under-reporting or giving false information.

Fake or Missing Information in ITR

Addition of fake entries or hiding income in the return is taken very seriously. If the department finds any false information, fake documents or hidden bank accounts then a fine will be charged under the law.

What to Do If You Get a Notice

• Check the notice to see if it has your PAN and a valid Document Identification Number (DIN).
• Understand the reason for the notice, like defective return or detailed checking.
• Gather all documents like income proofs, investment papers, and deduction receipts.
• Talk to a tax expert if needed. It can help you reply better and avoid further issues.

• Reply within the time limit given in the notice. A late reply can create more problems.
• To avoid such notices, it’s best to file your ITR early, honestly report all income, and carefully check everything before submitting. Staying alert after filing is just as important as filing correctly.