For many taxpayers, filing an Income Tax Return (ITR) no longer begins with calculating tax. It begins with questions. Does the interest income in the Annual Information Statement (AIS) match the bank statement? Which capital gains rule applies after selling a house? Have foreign investments been disclosed correctly? Is this even the right ITR form?

On paper, the filing process has become much simpler. Returns are pre-filled, disclosures are available online and the e-filing portal has evolved significantly. Yet, many taxpayers are discovering that the real challenge lies in ensuring every figure is accurate and every disclosure is complete.

To understand where taxpayers are struggling the most this year, I spoke to tax experts, and a common theme emerged: the biggest risks are no longer about paying the wrong amount of tax, but about inaccurate reporting, data mismatches and avoidable filing errors.

PROPERTY SALES HAVE BECOME MORE COMPLICATED

One of the biggest changes this year relates to the taxation of residential property sales.

The Union Budget introduced a new 12.5% long-term capital gains (LTCG) tax rate without indexation. However, taxpayers selling residential properties purchased before 23 July 2024 can choose between the old regime of 20% tax with indexation and the new 12.5% rate without indexation.

According to Gaurav Makhijani, Tax Head at Makhijani Gera \& Associates, this has become one of the most confusing aspects of this year's filing season.

"One challenge we are seeing this year is due to the change in the tax rules for the sale of residential property. Taxpayers selling properties purchased before 23 July 2024 have the option to choose between the old 20% tax with indexation and the new 12.5% tax without indexation. In some cases, taxpayers have also noticed incorrect computation of surcharge or interest in the return utility, requiring manual verification before filing," he said.

He added that reporting has become significantly more detailed for taxpayers who have multiple income sources, including capital gains, foreign assets, ESOPs, cryptocurrency transactions and high-value investments.

YOUR AIS IS HELPFUL, BUT IT ISN'T THE FINAL WORD

Many taxpayers assume that if the Annual Information Statement (AIS), Taxpayer Information Summary (TIS) or Form 26AS contains a particular figure, it must be correct.

Experts warn that this assumption can lead to errors.

According to Makhijani, mismatches continue to be one of the most common problems every filing season.

"Mismatches may arise due to reporting errors by banks, employers or other reporting entities, or because certain transactions are reported without complete details such as PAN. Taxpayers should not rely solely on AIS, TIS or Form 26AS. These are useful reference tools but are not a substitute for maintaining proper records," he said.

He advised taxpayers to reconcile any differences with their own records before filing. If the taxpayer has supporting documents to justify the correct position, the return should be filed accordingly. However, he cautioned that such mismatches could trigger a query from the tax department later.

Anita Basrur, Partner, Direct Taxation, Sudit K. Parekh \& Co. LLP, agrees that data mismatches remain one of the biggest pain points.

"As mentioned earlier, one of the issues faced is the mismatch in the data, especially of interest income, sale of capital assets and foreign transactions. Taxpayers should cross-check the data and, in case of mismatch, highlight the same to the deductor or reporting entity. A grievance should also be raised on the portal," she said.

CHOOSING THE WRONG ITR FORM IS STILL A COMMON MISTAKE

As taxpayers diversify their investments, selecting the correct ITR form has become more important than ever.

Someone earning only salary may require one form, while another taxpayer with capital gains, foreign assets or business income may need a completely different one. Yet many taxpayers continue to make mistakes.

Makhijani said taxpayers often choose the wrong return form, claim deductions not available under their chosen tax regime, incorrectly calculate capital gains or fail to disclose mandatory information relating to foreign bank accounts, overseas investments and foreign income.

He also pointed out that some taxpayers incorrectly report tax deducted and deposited on rental income, leading to avoidable complications.

Basrur echoed these concerns.

"The taxpayer may end up using the incorrect form if they are not aware of the forms applicable for various sources and combinations of income. Many also miss reporting income from the sale of shares, crypto income and disclosure of foreign assets. Incorrect claims of deductions and ineligible exemptions may also lead to scrutiny if discovered by the authorities," she said.

Gaurav also noted that taxpayers frequently overlook mandatory disclosures relating to foreign bank accounts, overseas investments and foreign income, while some also make errors in reporting tax deducted and deposited on rental income.

HAS THE NEW INCOME TAX ACT CREATED CONFUSION?

The introduction of the Income Tax Act, 2025 has prompted many taxpayers to wonder whether the filing process has fundamentally changed.

According to Gaurav, the transition has been more administrative than practical.

"Many taxpayers are checking the provisions of the Income Tax Act, 2025 while filing returns for FY 2025-26. However, the current filing process still follows the forms and terminology of the Income-tax Act, 1961. Apart from some initial confusion, the latest filing utilities guide taxpayers to the correct year and do not create any practical difficulties," he explained.

Basrur believes taxpayers are still getting used to the revised terminology, updated schedules and disclosures. She recommends reading the FAQs issued by the tax authorities and ensuring that the latest filing utilities are used.

TECHNOLOGY HAS IMPROVED, BUT GLITCHES REMAIN

The Income Tax Department's e-filing portal has become significantly more sophisticated over the years, with pre-filled returns, online verification and improved taxpayer services.

However, technical issues have not disappeared completely.

According to Basrur, taxpayers continue to face problems such as slow portal response, login failures, OTP issues, validation errors and e-verification glitches, especially as the filing deadline approaches.

"While the Government is making efforts to encourage filing by providing more information, technical glitches such as slow portal response, login and OTP failures, validation errors and issues with e-verification continue to occur. This could also be due to heavy traffic during the last few days before the deadline," she said.

She advised taxpayers to avoid waiting until the last minute and, where possible, upload their returns during non-peak hours.

THE BIGGEST RISK- INCORRECT REPORTING

The conversations with tax experts make one thing clear. The biggest challenge this year is not the amount of tax payable, but ensuring that the return is complete, accurate and backed by proper records.

Whether it is reconciling AIS with personal documents, choosing the correct ITR form, reporting capital gains under the appropriate rules or disclosing foreign assets, every detail deserves attention.

Their advice is simple: begin the filing process early, verify every piece of information before submitting the return and complete e-verification without delay. In an increasingly data-driven tax system, careful reporting, not rushed filing, is what will help taxpayers avoid unnecessary notices and ensure a smoother ITR filing experience. After all, A little extra time spent today could save months of correspondence with the tax department later.

- Ends

Published By:

Jasmine anand

Published On:

Jul 22, 2026 13:37 IST