4 Essential ITR Filing Tips for Salaried Employees to Avoid Penalties

The deadline to file Income Tax Returns (ITR) for the financial year 2024–25 (FY 2024–25) is fast approaching. Taxpayers have until September 15, 2025, to complete their filings. The Income Tax Department has already released the Excel utilities for all forms, ranging from ITR-1 to ITR-6, making it easier for individuals to submit their returns.

For salaried professionals, filing taxes may seem straightforward, but even small errors can invite penalties, scrutiny, or unnecessary stress. Choosing the right form, reporting income correctly, and disclosing all relevant details are critical to ensuring compliance. To help you avoid common mistakes, here are four key tips every salaried taxpayer must follow this year.

1. Choose the Right Tax Regime

One of the most important decisions before filing your ITR is selecting between the old tax regime and the new tax regime.

• Old Regime: This allows taxpayers to claim multiple deductions and exemptions such as HRA (House Rent Allowance), LIC premiums, PF contributions, and others. It is usually more beneficial if you have significant deductions available.

• New Regime: Offers simplified slabs with lower tax rates but very limited exemptions.

Pro Tip: Before finalizing, always use the Income Tax Calculator to compare your tax liability under both regimes. The correct choice can save you thousands of rupees.

2. Report Income Accurately

A common mistake many taxpayers make is under-reporting or misreporting their income. This often happens with capital gains, investments, or side income sources.

For example:

• If you sold shares, mutual funds, or property during the year, ensure that you report the capital gains under the correct section.

• Avoid calculating taxes on old rates—always apply the latest applicable rules for accurate reporting.

Incorrect or incomplete reporting can trigger a tax notice, even if the error was unintentional. Transparency is always safer than omissions.

3. Disclose Foreign Assets and Investments Properly

If you hold foreign investments, shares, ESOPs (Employee Stock Ownership Plans), or own any overseas property, you must declare them under the correct schedule in your ITR form.

Non-disclosure of foreign income or assets is a serious compliance violation and may attract strict action under the Black Money (Undisclosed Foreign Income and Assets) Act.

By correctly filling in details of your global assets and income, you not only comply with the law but also avoid unnecessary legal complications.

4. Provide All Key Information Without Concealment

While filing, ensure that you disclose every detail that affects your tax status:

• If you are a director in a company, you must file using ITR-4.

• If you own unlisted shares or securities, these must be reported transparently.

• Any other directorships, partnerships, or significant financial positions must also be mentioned.

Hiding or skipping crucial information may appear as tax evasion, which can attract penalties and investigations.

Final Takeaway

For salaried individuals, filing ITR on time is not just about meeting deadlines—it is about ensuring accuracy, transparency, and avoiding penalties. Here’s a quick recap of what you should do:

• Pick the right tax regime using the calculator.

• Report all forms of income, including capital gains, at the correct rates.

• Declare all foreign assets and investments in the right schedules.

• Be transparent about shareholdings, directorships, and other financial details.

By following these four simple but essential tips, you can file your ITR confidently, avoid penalties, and maintain peace of mind. With just a few weeks left until the deadline, now is the time to review your documents, use the available utilities, and file without delay.