25 Critical ITR Filing Errors Every Assessee Must Avoid for AY 2026-27
The Income Tax Return filing season for Assessment Year 2026-27 brings with it a distinct set of challenges — a transitional filing landscape, revised due date structures, expanded form eligibilities, and the coexistence of two tax legislations. Despite technological advancements such as pre-filled returns, the Annual Information Statement (AIS), and increasingly robust validation mechanisms deployed by the Income Tax Department, a recurring pattern of avoidable errors continues to surface in filed returns, year after year.
This guide draws from practical experience across ITR filings involving salaried individuals, professionals, business entities, and corporate assessees to present 25 critical mistakes that must be actively avoided when filing returns for AY 2026-27 (FY 2025-26).
Important Note for AY 2026-27: Returns for FY 2025-26 must be filed under the provisions of the Income-tax Act, 1961, even though the Income Tax Act, 2025 has come into force from 1st April 2026. The due dates are structured as follows: 31st July 2026 for ITR-1/ITR-2 filers, 31st August 2026 for ITR-3/ITR-4 non-audit cases, and 31st October/30th November 2026 for audit and transfer pricing cases respectively. The revised return deadline has been extended to 31st March 2027.
A. Errors Relating to Personal and Basic Information
1. Filing Under an Incorrect ITR Form
One of the most consequential and frequently committed errors is the selection of an inappropriate ITR form. For instance, an assessee earning capital gains or owning two house properties might have incorrectly used ITR-1 in previous years before its scope was broadened. Similarly, a professional opting for presumptive taxation under Section 44ADA who files ITR-2 instead of ITR-4 is making a form-selection error. Filing under a wrong form renders the return defective under Section 139(9), necessitating rectification within the stipulated timeframe.
For AY 2026-27, it is important to note that both ITR-1 and ITR-4 now accommodate up to two house properties, which changes eligibility criteria compared to prior years.
2. Mismatches in Basic Identity Details
Even seemingly minor discrepancies — such as initials used in place of a full name, or a date of birth inconsistency — between the ITR data and PAN/Aadhaar records can result in processing delays, failed e-verification, or outright rejection of pending refunds. Assessees must ensure that the name and personal details entered in the return exactly mirror those in their PAN and Aadhaar databases.
3. Selecting an Incorrect Assessment Year
A particularly prevalent error this year involves confusion between "Tax Year 2026-27" (relevant only for income earned post 1st April 2026, to be filed in 2027) and AY 2026-27, which pertains to income earned during FY 2025-26. Assessees must select AY 2026-27 for income earned in FY 2025-26 and must apply the provisions of the Income-tax Act, 1961 — not the Income Tax Act, 2025 — when filing this return.
4. Misclassification of Residential Status
Assessees who have relocated abroad or returned to India during the financial year frequently misclassify their residential status without rigorously applying the day-count tests under Section 6 of the Income-tax Act, 1961. The three categories — Resident, Resident but Not Ordinarily Resident (RNOR), and Non-Resident — carry materially different tax implications, particularly with respect to the taxability of foreign-source income. An incorrect classification can result in either under-reporting or over-reporting of taxable income.
5. Outdated or Unvalidated Bank Account Details
Refunds processed by the Income Tax Department are credited exclusively to a pre-validated bank account linked with the assessee's PAN. A common failure involves bank accounts that have been closed since last filing, accounts that have not been pre-validated on the e-filing portal, or accounts that are not PAN-linked — all of which lead to refund failures and necessitate subsequent correction requests.