First-Time ITR Filing for FY 2024-25? Avoid These 8 Common Mistakes in AY 2025-26

Filing your Income Tax Return (ITR) for the first time is a big financial milestone. With the ITR filing season for Financial Year (FY) 2024-25 underway (Assessment Year 2025-26), many new taxpayers unknowingly make mistakes that can delay refunds, trigger tax notices, or cause long-term issues.

Thanks to digital tools, filing is easier than ever, but it still requires attention to detail. If you're a first-time filer, here are 8 common mistakes to avoid and how to stay on the right track.

1. Choosing the Wrong ITR Form

Many first-timers assume ITR-1 is suitable for all salaried individuals. "But if you have additional income, like capital gains, rental income from multiple properties, or freelance earnings, you may need to use ITR-2 or ITR-3," said Tax Expert, Gauri Chadha. So, check your income sources carefully before selecting the form.

2. Ignoring Form 26AS, AIS & TIS

Relying only on your Form 16 provided by your employer is risky. You must cross-check your income and tax details using Form 26AS, Annual Information Statement (AIS), and Taxpayer Information Summary (TIS) as they show your total income and taxes paid from all sources. Matching these with your records helps avoid errors, refund delays, or tax notices.

3. Not Reporting All Income

Taxpayers should not forget to report interest from savings accounts, fixed deposits, rental income, or any side income, even if small. Hiding these can lead to penalties or tax notices.

4. Entering the Wrong Assessment Year

"It is one of the common mistakes by first-time tax filers", said tax expert Kapil Mittal. "When filing your ITR, make sure you select the correct Assessment Year (AY). If you choose the wrong one, you might get a notice or have to pay a penalty," added tax expert Kapil Mittal.

The Assessment Year is the year you file your return for the income you earned in the previous year. So, for income earned in FY 2024-25, the correct AY is 2025-26.

5. Failing to Report Exempt Income or Losses

Even tax-free income like PPF interest, dividends, or capital losses should be disclosed, which taxpayers tend to skip. However, skipping them may impact your ability to carry forward losses for future tax benefits. Hence, report all income, even if it's exempt.

6. Skipping Bank Account Disclosures

Some new filers only report their salary account. But you must declare all active bank accounts including savings, current, or any other type of bank account. Investors should validate one account for refunds, but disclose all.

7. Claiming Fake or Inflated Deductions

Claiming false expenses under sections like 80C or 80D using fake rent receipts or inflated bills may result in tax notices or penalties. Hence, only claim genuine deductions and keep proof for all claims.

8. Forgetting to E-Verify Your Return

Filing is not complete until you e-verify your return. If you forget, it's as if you never filed. Hence, E-verify within 30 days using Aadhaar OTP, net banking, or by sending a signed form.

Important Tips for a Smooth First-Time Filing:

• File early to avoid a last-minute rush and penalties.
• Keep your email, phone number, and address updated on the tax portal.
• Seek help from a tax expert if you're unsure.