Tax Experts Warn Against Filing Errors Before July 31 Deadline

Tax experts are issuing urgent guidance to freelancers and salaried taxpayers to avoid common filing errors before the July 31 deadline for Assessment Year 2026-27 returns. The Income Tax Department of India now employs data analytics and automated validation to detect discrepancies, which can result in defective return notices, delayed refunds, or tax demands.

For freelancers and gig workers, the primary challenge lies in income classification. Experts note that reporting earnings as business income versus salary depends on the level of independence and whether an employer-employee relationship exists. Common mistakes include incorrectly applying presumptive taxation by confusing Section 44AD with 44ADA and failing to reconcile income with Form 26AS and the Annual Information Statement (AIS).

Salaried taxpayers are warned against the mistaken assumption that ITR-1 is the default form for all individuals, as capital gains or foreign assets may require different filings. Additional critical errors include skipping e-verification, failing to disclose exempt income, and omitting Form 16 data from previous employers for those who changed jobs during the year. Experts recommend validating bank accounts and meticulously reconciling all records to ensure compliance.