ITR Filing FY 2024-25: Step-by-Step Instructions for First-Time Taxpayers in AY 2025-26

As the ITR filing season for Assessment Year 2025-26 kicks off, many first-time taxpayers are preparing to file their income tax returns. While the process has become more user-friendly with digital tools, new filers often make avoidable mistakes that lead to refund delays, notices, or defective returns.

One of the most common errors is selecting the wrong ITR form. Salaried individuals often default to ITR-1, but if you have capital gains, rental income, or freelance earnings, you may need to file ITR-2 or ITR-3. Using the incorrect form can mark your return as defective.

Relying only on Form 16 is another frequent misstep. First-time filers should also review their Annual Information Statement (AIS), Taxpayer Information Summary (TIS), and Form 26AS—which capture income, TDS, and high-value transactions—to avoid mismatches and ensure accurate reporting.

Many forget to report exempt incomes like PPF interest or fail to declare capital losses, which could be carried forward for future tax benefits. Additionally, deductions such as Section 80C or 80D must be supported with proper documentation, even if not required to be uploaded.

Misclassifying income—for instance, reporting freelance work as salary—can lead to wrong tax calculations. Similarly, individuals holding foreign shares or earning foreign income must report them and claim applicable relief under the Double Taxation Avoidance Agreement (DTAA).

Another overlooked step is disclosing all active bank accounts, not just the salary account. Only dormant accounts, as per tax department guidelines, are exempt from reporting.

Lastly, don’t forget to e-verify your return within 30 days of filing. If not verified, the return is considered invalid.

Filing income tax is more than a legal formality—it’s a key step toward financial empowerment. Avoiding these common mistakes ensures a smooth, stress-free experience for new taxpayers.