Seven income-tax return mistakes that trigger notices — and how to avoid them
Short answer. Most notices are not about tax evasion. They are about mismatches: the department's Annual Information Statement (AIS) says one thing and your return says another. Reconcile AIS, TIS and Form 26AS before you file and you remove most of the risk.
1. Not checking AIS before filing
The AIS lists what banks, employers, mutual funds, brokers and registrars have reported about you: salary, interest, dividends, share and fund sales, property purchases. If an item in AIS is missing from your return, the system flags it automatically. Download the AIS and TIS, tick off every line, and use the feedback option on the portal where an entry is wrong.
2. Leaving out small interest income
Savings-account interest, FD interest and interest on income-tax refunds are all taxable. They are also all in your AIS. The amounts are small; the mismatch is what causes the intimation.
3. Using the wrong ITR form
ITR-1 cannot be used if you have capital gains beyond the small amount the form allows, more house properties than the form permits (the limit was relaxed for AY 2026-27 — check this year's form), foreign assets or foreign income, or are a director in a company. Filing the wrong form makes the return defective, and an uncorrected defective return is treated as never filed.
4. Capital gains reported without the detail
Share and mutual fund sales need scrip-wise or fund-wise detail in many cases, the right holding period, and grandfathering for equity bought before 31 January 2018. Broker and registrar statements rarely match each other perfectly. Build one reconciled capital gains statement, and keep it.
5. RSUs, ESPPs and foreign shares
Three separate things go wrong: the perquisite already taxed through salary is taxed again as capital gains because the cost was taken as zero; foreign tax credit is claimed without filing Form 67 on time; and Schedule FA (foreign assets) is skipped. Non-disclosure of foreign assets carries a penalty under the Black Money Act, subject to a small-value relief — do not leave this schedule blank if you hold foreign shares.
6. Claiming deductions without proof
HRA without rent receipts and the landlord's PAN where required, 80C or 80D figures that do not match premium receipts, and donations without valid 80G details are common triggers for notices asking for evidence. Claim what you can document.
7. Filing and forgetting
A return that is not e-verified within 30 days is invalid. After verification, watch for the intimation under Section 143(1): it compares your figures with the department's. If it shows a demand or a reduced refund, you usually have 30 days to respond or file a rectification.
The checklist we run before every filing
- AIS, TIS and Form 26AS downloaded and reconciled line by line.
- Form 16 and salary slips matched, including both employers if you changed jobs.
- Every bank account's interest certificate collected.
- One capital gains working across all brokers and fund houses.
- Foreign assets, income and taxes listed; Form 67 filed before the return.
- Deduction proofs on file, not just figures.
- Old-vs-new regime comparison done — use our calculator.
- Return e-verified the same day; 143(1) intimation checked when it arrives.
FAQ
I got an intimation under Section 143(1). Is that a notice?
Can I fix a mistake after filing?
What if an AIS entry is wrong?
Education only, not tax advice for your situation. Rules and deadlines change — we check them at the time of filing.
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