Receiving a notice from the Income Tax Department can be stressful. In many cases, notices are triggered due to avoidable errors during return filing.

Here are the most common income tax mistakes taxpayers must avoid.

1. Mismatch with Form 26AS / AIS

If reported income differs from Form 26AS or AIS, automated notices may be generated.

2. Not Reporting Interest Income

Savings account interest and FD interest are taxable and must be declared.

3. Incorrect Capital Gains Reporting

Improper calculation of capital gains from shares or property can trigger scrutiny.

4. Claiming Excess Deductions

Over-claiming deductions under Sections 80C, 80D, or HRA without proof can lead to notices.

5. Selecting Wrong ITR Form

Filing incorrect ITR form may result in defective return notice under Section 139(9).

6. High-Value Transactions Not Reported

Large cash deposits, property purchases, and stock transactions are tracked through AIS.

7. Failure to Verify ITR

Unverified returns are treated as invalid.

8. Filing Form 10IEA Incorrectly for Choosing Old or New Tax Regime

Mistakes in the form while choosing the tax regime may lead to a notice from the Income Tax Department of India.

9. Incorrect residential status declaration

Declaring the wrong residential status in the ITR can lead to incorrect taxation of income and may attract a notice from the Income Tax Department of India.

10. Failure to report foreign income or foreign assets and liabilities

Not declaring foreign income, bank accounts, or investments in the ITR results in incomplete disclosure.

11. Incorrect reporting of foreign tax paid

Claiming foreign tax credit with incorrect amounts, without filing Form 67, or exceeding the limit allowed under the Double Taxation Avoidance Agreement can lead to discrepancies in the return filed with the Income Tax Department of India.

12. Not filing Form 67 before filing the ITR

If a taxpayer claims foreign tax credit without submitting Form 67 before filing the Income Tax Return, the credit may be disallowed.

13. Not uploading the required supporting documents while filing Form 67

Failure to attach documents such as foreign tax payment proof, tax return, or withholding certificates from the foreign country may lead the Income Tax Department of India to disallow the claimed foreign tax credit.

14. Mismatch between ITR and Form 3CD

Differences between the details reported in the Income Tax Return and the tax audit report can trigger queries or notices from the Income Tax Department of India, as the department cross-verifies both filings for consistency.

15. Incorrect Set-off of Brought Forward Losses

Adjusting previous years’ losses against current income incorrectly can lead to notices from the Income Tax Department of India