ITR-1 Filing Deadline Extended to Sep 15: Avoid Ineligible Deduction Claims This Season

The deadline for filing ITR-1 returns for non-audit cases has been extended to September 15, 2025. Amid this extension, taxpayers are strongly advised to exercise caution and avoid claiming deductions for which they are not eligible.

Some of the frequently claimed deductions include:

• Section 80C: Investments such as Public Provident Fund (PPF), Equity-Linked Savings Schemes (ELSS), and more
• Section 80D: Health insurance premiums
• Section 80E: Interest on education loans
• Sections 80TTA/TTB: Interest income from savings bank accounts

Consequences of Making Ineligible Claims

The revised ITR guidelines emphasize a strict “zero-tolerance” stance on false or inflated claims. According to Section 270A of the Income Tax Act, 1961, taxpayers who misreport income or claim unwarranted deductions can face penalties up to 200% of the tax due, along with applicable interest. In serious cases, legal prosecution under Section 276C may also be initiated.

It is therefore critical that taxpayers submit only valid claims to avoid hefty fines and potential legal repercussions.

Tips to Avoid Ineligible Claims and Ensure a Smooth ITR Filing for AY 2025-26

With the tax department’s heightened scrutiny and the new tax regime becoming the default, taxpayers must be vigilant when filing their returns. Here are some practical tips to help you file correctly and avoid pitfalls:

1. Select the Appropriate Tax Regime

• The new tax regime offers lower tax rates but disallows most deductions such as 80C, 80D, HRA, and LTA.
• The old tax regime permits these deductions but comes with higher tax rates.

Salaried employees can opt out of the new regime through the ITR form, while business owners and professionals must file Form 10-IEA. Ensure that the regime selected matches the one communicated to your employer.

2. Maintain Proper Documentation

 Supporting documents are essential to substantiate your claims and avoid scrutiny:

• 80C: PPF passbook, ELSS statements, tuition fee receipts
• 80D: Health insurance premium receipts
• HRA: Rent agreement, landlord PAN if rent exceeds ₹1 lakh annually
• Home Loan: Interest and principal certificates
• Donations: Receipts from eligible institutions (non-cash donations over ₹2,000 require proof)
• 80E: Interest certificates for education loans

3. Reconcile Your Income and Deductions with AIS and Form 26AS

• AIS (Annual Information Statement) details interest, dividends, and transactions related to property or mutual funds.
• Form 26AS shows TDS, advance tax, and self-assessment tax paid.

Any mismatch could prompt a notice from the tax department—raise discrepancies with deductors or update your return accordingly.

4. Avoid Ineligible Claims

• Do not claim deductions like 80C, HRA, etc., if you have opted for the new tax regime.
• Avoid claiming personal expenses or inflating deductions.
• Do not claim deductions on cash payments where not permitted.

5. Verify Your Return

 After filing, ensure your return is verified either by:

• E-verification using Aadhaar OTP, net banking, or pre-validated bank accounts, or
• Sending a signed physical ITR-V to CPC Bengaluru within 30 days of filing.

Also Read: ITR Filing FY 2025–26: How Much Money Can You Gift to a Family Member Tax-Free in India?

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.