ITR Filing 2025: These mistakes in income tax return will cost you heavily, you may have to pay up to 200% penalty; know how to avoid it

ITR Filing 2025: Are you filing your income tax return? Even a small mistake can prove costly. The Income Tax Department can impose a penalty of up to 200% on some mistakes. How to avoid this problem? Know the full report…

ITR Filing 2025: The process of filing Income Tax Return (ITR) for Assessment Year 2025–26 (FY 2024–25) has started. Especially after getting Form 16, a large number of taxpayers are filing returns.

However, tax experts are warning that if you give any wrong information in the return or hide the income, then the Income Tax Department can not only impose a penalty but you may also have to face interest and legal action. This penalty can be up to 200%.

Heavy penalty on wrong claim

According to Sandeep Sehgal, Tax Partner at AKM Global, ‘Hiding income in ITR, claiming false deductions or exemptions, or providing incorrect information is punishable under Section 270A of the Income Tax Act. If the mistake is unintentional, a penalty of 50% of the tax may have to be paid. But for knowingly providing incorrect information, a penalty of up to 200% of the tax can be imposed.’

When can a 200% penalty be imposed?

  • Claiming HRA by showing fake rent receipts.
  • Claiming deductions/exemptions under Section 80C or 10 without proof.
  • Hiding crypto, freelancing, gig economy or foreign income.
  • Making false entries in the books or suppressing facts.

Under section 271AAD, if any wrong or missing entry is found during assessment, then a separate penalty equal to that entire amount can be imposed.

Wrong ITR form can also prove costly

According to the report of ClearTax, many taxpayers do not choose the right form, due to which some income is not reported. In such cases also, the risk of penalty remains. In such a situation, choose the ITR form only after thorough investigation. If necessary, you can also take advice from an expert.

You will not get any support even if CA makes a mistake

Tax experts clarify that even if your chartered accountant or tax consultant makes a mistake while preparing the return, the responsibility will still be considered to be of the taxpayer. Under the law, the one who has filed the return is accountable. This means that you cannot escape by making an excuse that a CA had filed your ITR.

Risk of interest and prosecution

In case of incorrect returns or tax underpayment, taxpayers may have to pay interest under sections 234B and 234C of the Income Tax Act. If the case is serious, the Income Tax Department can also initiate prosecution.

How to avoid these mistakes?

  • Report income from all sources correctly.
  • Choose the appropriate ITR form for yourself.
  • Keep proper documentation ready for every deduction and exemption.
  • If you spot an error, file a revised or updated return immediately.

Sandeep Sehgal advises, ‘Exercise complete honesty and transparency while filing ITR. If any error remains, correcting it quickly can avoid serious legal consequences.’

The post ITR Filing 2025: These mistakes in income tax return will cost you heavily, you may have to pay up to 200% penalty; know how to avoid it first appeared on informalnewz.

News