ITR-3 & ITR-4: Mistakes Taxpayers Should Avoid

Filing an income tax return involves more than selecting a form and submitting figures.

Taxpayers using ITR-3 or ITR-4 should avoid mistakes that can trigger mismatches, notices or other compliance issues.

Don’t choose ITR-4 simply because it is easier. The correct form depends on your income and eligibility. If you do not meet the ITR-4 conditions, use ITR-3 or the applicable form instead.

Don’t assume income is not taxable because there was no TDS. Bank interest, professional receipts and other earnings may still need to be reported.

Avoid copying last year’s return without checking the details. Income, deductions, investments, bank accounts and tax-regime choices can change every year.

Don’t ignore discrepancies in the Annual Information Statement. Check unfamiliar transactions before filing. If an AIS entry appears incorrect, verify the facts instead of altering your return merely to match it.

Business owners and professionals should not under-report receipts. Freelancers, consultants, doctors, lawyers, creators and traders should ensure their reported income broadly matches invoices, bank records and other financial documents.

Taxpayers with futures and options activity should also be careful. F&O transactions can have specific tax treatment and may require business-income reporting. Trading statements should be reconciled before filing.

Avoid claiming deductions without proper supporting documents. Keep receipts, certificates, statements and other records that substantiate the deductions claimed.

Foreign assets and income should not be overlooked. Where disclosure is required, taxpayers must provide the relevant details in the applicable ITR.

It is also risky to wait until the final hours of August 31, 2026. Eligible non-audit taxpayers may face portal glitches, missing documents, AIS mismatches, payment issues or validation errors. Filing early provides time to resolve such problems.

Finally, don’t assume August 31 is everyone’s deadline. Taxpayers whose business or professional income is subject to audit have different compliance timelines.

After filing, e-verify the return within the prescribed period. Keep the acknowledgement and verification records safely for future reference.

Image from Pxhere (Free for commercial use / CC0 Public Domain)

Image published on February 21, 2017

Image Reference: https://pxhere.com/en/photo/782062