9 ITR filing mistakes that trigger Sec 143(1) notices — and how to avoid them

The Centralised Processing Centre (CPC) Bengaluru processes ~7 crore ITRs a year. Almost all 143(1) intimations originate from arithmetic checks, AIS / 26AS / Form 16 mismatches, or schedule omissions. The good news: every category is preventable with a 30-minute pre-filing review.

01 Filing without reconciling AIS line-by-line

The Annual Information Statement (AIS) now pre-fills 15+ income categories: salary, interest (SB + FD), dividend, broker P&L, mutual-fund redemptions, GST turnover, rent received, foreign remittances, property transactions, even gaming winnings. If your declared total doesn't match AIS within ₹1, CPC sends an intimation.

02 Capital gains entered net of charges instead of gross

Broker statements show net P&L. AIS shows gross sale consideration from your STT report. CPC matches gross to gross. If you report only the net gain, the schedule CG flags a mismatch.

Item	Broker stmt	AIS	Report in ITR
Sale value	₹5,00,000	₹5,00,000	₹5,00,000 (gross)
Cost of acquisition	—	—	₹3,50,000
STT / brokerage	(₹2,500)	—	Not deductible
Net gain	₹1,47,500	—	₹1,50,000

STT is not deductible against capital gains. Brokerage / DP charges are deductible only against business income (if you're trading as business).

03 Forgetting to disclose foreign assets (Schedule FA)

This is the highest-penalty mistake on this list. Resident-and-ordinarily-resident taxpayers must disclose every foreign asset — even ₹50,000 in a US brokerage account — in Schedule FA. Non-disclosure is treated under the Black Money Act with a ₹10 L flat penalty per asset.

04 HRA claim without rent receipts / landlord PAN

Section 10(13A) HRA exemption requires:

• Annual rent < ₹1 L: rent receipts (any landlord)
• Annual rent > ₹1 L: rent receipts plus landlord's PAN on Form 12BB
• Rent > ₹50,000/month: TDS @ 5% u/s 194-IB by tenant

If you skipped TDS on rent paid > ₹50K/month, CPC flags that too. Even if you paid the landlord in cash, TDS is your obligation as a tenant individual.

05 Mismatch between Form 16 and Form 26AS

Common scenarios:

• Employer issued Form 16 but didn't file 24Q (so 26AS is blank)
• You changed jobs mid-year; previous employer didn't issue Form 16 part B
• Salary in Form 16 includes a bonus that's actually on 26AS in a different period

If 26AS shows ₹0 TDS but Form 16 shows ₹40,000 — CPC won't grant the TDS credit. You'll have to chase your employer to file a TDS revision or claim refund via rectification.

06 Standard deduction taken twice

Sounds obvious but happens often. People who switched jobs mid-year sometimes claim ₹75,000 standard deduction from both employers' Form 16. CPC catches this — only one ₹75,000 is allowed per assessee.

07 Wrong ITR form selected

The form picker matters more than you think. Examples we see:

• ITR-1 filed when you have CG → CPC rejects the return as defective
• ITR-1 filed with foreign assets → Schedule FA missing, treated as concealment
• ITR-1 filed with 2 house properties → second house's notional rent missing
• ITR-4 filed when 44AD-eligible but actual profit < 8% → audit required, not presumptive

Use our ITR form picker if you're unsure.

08 Bank account not pre-validated for refund

From AY 2023-24, refunds are issued only to a pre-validated bank account linked to your PAN. Common refund-delay reason: bank account in ITR isn't pre-validated, or the IFSC is wrong, or PAN-Aadhaar isn't linked.

• Log into the e-filing portal → My Profile → Bank Account → Validate
• Ensure PAN-Aadhaar are linked (mandatory; ₹1,000 penalty otherwise)
• Verify the account name exactly matches PAN name

09 Missing 87A rebate marginal relief calculation

If your taxable income is just above ₹12 L in the new regime, you should be applying marginal relief. Without it, ITR utility computes ~₹61,500 tax on ₹12,10,000 income — when the legally correct number is closer to ₹10,000.

Most off-the-shelf calculators (including the official utility, until recently) didn't handle marginal relief correctly. The fix: file Schedule TR-IF with the relief explicitly claimed, and verify the auto-computed tax matches your manual calc.

Our income tax calculator implements marginal relief by default.

The pre-filing checklist we use

Every Finclar ITR goes through this 8-step internal check before it is filed:

1. AIS / 26AS / Form 16 line-by-line reconciliation
2. Bank account pre-validation confirmed
3. PAN-Aadhaar linkage verified
4. Schedule FA disclosure (if ROR with foreign assets)
5. Capital gains entered gross of charges
6. HRA receipts + landlord PAN on file (if claimed)
7. Form selection correctly matches profile
8. Regime selection optimised (we model both)