Top Reasons Why Income Tax Returns Get Rejected in India (2025)
- Asharam Swain
- 2 days ago
- 10 min read
ncome Tax Return (ITR) rejection continues to be a recurring issue for taxpayers under the Income Tax Act, 1961. Even minor mismatches or incomplete filings can result in rejection, leading to refund delays and compliance troubles. The Income Tax Department’s system cross-verifies every detail from Form 16, Form 26AS, AIS, and bank data — any inconsistency can halt processing. Most rejections stem from incomplete information, failure to e-verify, or incorrect form selection. With updated filing norms for 2025, understanding these errors is essential to ensure seamless tax filing and timely refunds.
Table of Contents
Understanding ITR Rejection Under the Income Tax Act, 1961
An Income Tax Return (ITR) is a legal declaration of income, deductions, and taxes paid under the Income Tax Act, 1961. The Income Tax Department processes each return by cross-verifying the information provided with data available from official sources such as Form 16, Form 26AS, and the Annual Information Statement (AIS). If discrepancies, incomplete details, or verification lapses are found, the return may be marked as “defective” or “rejected.” A rejected ITR is considered invalid, which means it is as though no return was filed at all. This can lead to penalties, interest on unpaid tax, and loss of refund eligibility. Understanding the reasons for rejection ensures smoother filing and compliance with statutory requirements.
Incomplete or Inaccurate Information in ITR Forms
One of the most common reasons for ITR rejection is incomplete or incorrect information in the return form. Errors such as misspelled names, wrong PAN or Aadhaar numbers, incorrect bank account details, or mismatched income figures can cause the return to be rejected during processing. Even small typographical mistakes can prevent the system from verifying taxpayer identity or crediting refunds. It is crucial that all details match exactly with official records such as PAN, Aadhaar, and bank documents. Before submitting the return, taxpayers should use the “Preview and Submit” feature on the e-filing portal to verify every detail and avoid unnecessary rejection.
Income Discrepancies Between Form 16, 26AS, and AIS
Another major reason for rejection is income mismatch. The Income Tax Department compares the data reported in your ITR with information collected from employers, banks, and other financial institutions. Form 16 provides details of salary and TDS, Form 26AS shows tax credits and deductions, and AIS compiles your total income and financial transactions. If any of these differ from the income declared in your ITR — for example, if interest income or freelance earnings are omitted — the return can be flagged as inaccurate and subsequently rejected. To avoid this, taxpayers must reconcile their data with all available forms before filing and ensure that every source of income is correctly reported.
Failure to E-Verify Income Tax Return on Time
Filing an ITR alone does not complete the process — e-verification is mandatory within 30 days from the date of submission. If a taxpayer fails to verify within this period, the return is treated as invalid and automatically rejected by the system. E-verification can be done through multiple methods, including Aadhaar OTP, net banking, or through a digital signature certificate (DSC). Alternatively, a signed ITR-V form can be sent by post to the Centralized Processing Centre (CPC) in Bengaluru. Timely verification ensures that the return is officially accepted and processed for refund or assessment.
Incorrect Computation or Tax Assessment Errors
Many taxpayers face rejection due to calculation errors in income, deductions, or tax liability. Incorrect computation of exemptions under Sections 80C to 80U, or errors while selecting the applicable tax regime, can result in mismatch during processing. Similarly, reporting deductions under ineligible sections or using outdated slab rates from previous financial years can trigger rejections. Using an updated computation tool or a professional service helps in preventing such mistakes. Automated platforms like TaxBuddy cross-verify data with Form 16, 26AS, and other tax records to ensure accuracy in computation before filing.
Wrong ITR Form Selection and Its Consequences
Filing the return using the wrong ITR form is another frequent cause of rejection. Each form is designed for specific taxpayer categories and income sources. For instance, ITR-1 is for salaried individuals with income up to ₹50 lakh, while ITR-2 applies to those with multiple properties or capital gains. Using an incorrect form — such as ITR-1 for a taxpayer with business income — can result in rejection since it does not capture the necessary data fields. Before filing, taxpayers should confirm eligibility by reviewing the latest form guidelines on the Income Tax Department’s website or using platforms like TaxBuddy that automatically suggest the correct ITR form based on user inputs.
Missing Signature or Incomplete Verification Process
In cases where digital signature or verification details are missing, the return cannot be legally accepted. For paper-filed returns, the taxpayer’s physical signature is mandatory; for online filings, either a Digital Signature Certificate (DSC) or Aadhaar-based OTP verification is required. Incomplete or missing verification means the return remains pending and is eventually marked as invalid. Ensuring that the verification process is completed immediately after submission avoids the risk of rejection or delayed processing.
Bank Account and Pre-Validation Issues in ITR Filing
Bank account details are vital for refund processing. If the account number, IFSC code, or name mismatch with PAN records, the refund may fail or the return could be rejected. The Income Tax Department requires taxpayers to pre-validate at least one active bank account before filing. This ensures the refund, if any, is credited securely. Common errors include inactive accounts, closed bank accounts, or wrong IFSC codes. TaxBuddy provides built-in prompts to verify and validate bank details before submission, minimizing refund-related delays or rejection risks.
Technical or Portal-Related Glitches While Filing ITR
Sometimes, ITR rejections occur not due to human error but technical glitches in the e-filing portal. Interrupted uploads, session timeouts, or incomplete data transmission can lead to partially submitted returns. Even system-generated rejections can occur if the portal fails to sync data correctly between Form 26AS and the filed return. In such cases, taxpayers can refile their return after verifying submission status under “My Account → View Filed Returns.” It’s advisable to save a soft copy of the acknowledgment and confirmation email to confirm successful submission.
How to Correct and Refile a Rejected ITR
If an ITR is rejected, the taxpayer must first identify the reason for rejection, which is mentioned in the e-filing portal under the “Filed Returns” section. Once identified, corrections can be made directly in the respective fields. For example, if rejection occurred due to non-verification, e-verification can still be completed within the grace period. For data mismatches or incorrect forms, a revised ITR can be filed before the due date. It is important to ensure that all errors are fixed before refiling, as repeated rejections can attract penalties or scrutiny.
Role of TaxBuddy in Preventing ITR Rejection
TaxBuddy plays a vital role in helping taxpayers file error-free returns. The platform uses AI-driven checks to identify common mistakes such as mismatched income details, incorrect ITR forms, or unverified bank accounts. It automatically fetches and reconciles data from Form 16, 26AS, and AIS, reducing the scope for human error. Additionally, TaxBuddy provides real-time alerts for pending e-verifications and unmatched records, ensuring compliance is completed within deadlines. With both self-filing and expert-assisted options, users can choose the mode that best suits their comfort and complexity of filing.
Conclusion
Filing an Income Tax Return accurately is essential for ensuring timely refunds and avoiding compliance issues. Rejections generally arise from data mismatches, missed verification, or form-related errors — all of which are preventable with careful checks and timely corrections. Using intelligent filing platforms like TaxBuddy simplifies the process by automating data validation, suggesting correct forms, and tracking verification status. For anyone looking for assistance in tax filing, it is highly recommended to download theTaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options? TaxBuddy offers flexibility through two distinct options — self-filing and expert-assisted plans. The self-filing plan is designed for users who are comfortable managing their returns independently. It provides an AI-driven interface that automatically imports Form 16, Form 26AS, and AIS data, guiding users step-by-step to ensure accuracy. The expert-assisted plan, on the other hand, is ideal for those with complex income profiles, such as multiple properties, capital gains, or foreign income. Under this plan, a qualified tax expert prepares, reviews, and files the return after verifying all supporting documents, ensuring compliance and accuracy.
Q2. Which is the best site to file ITR? While the official Income Tax Department e-filing portal is the primary government platform for submitting returns, most taxpayers prefer using guided platforms for simplicity and support. TaxBuddy stands out as one of the best options in India due to its AI-based automation, instant error detection, and professional guidance. The platform ensures correct form selection, checks for data mismatches, and even provides post-filing notice support. It’s suitable for both salaried individuals and professionals who seek accuracy and convenience while staying fully compliant with the Income Tax Act, 1961.
Q3. Where to file an income tax return? Income Tax Returns can be filed online through the official Income Tax e-filing portal (www.incometax.gov.in) or through registered e-filing intermediaries like TaxBuddy. Filing through the government portal requires manual data entry and validation, while platforms like TaxBuddy automate most of these tasks. TaxBuddy’s system pulls information directly from government databases, verifies it for consistency, and ensures error-free submission. This not only saves time but also reduces the likelihood of rejection or refund delays.
Q4. What happens if my ITR is rejected? If your Income Tax Return is rejected, it is treated as if no return was filed for that financial year. This can result in the loss of refund eligibility, delayed processing, or penalties for non-filing. The first step is to log in to your e-filing account and check the reason for rejection under “View Filed Returns.” Common reasons include non-verification within 30 days, mismatched data, or wrong ITR form selection. Once the issue is identified, the return must be corrected and refiled before the due date or within the extended grace period allowed by the Income Tax Department.
Q5. How can I verify my ITR after filing? Verification is mandatory for completing the ITR filing process. It must be done within 30 days of submission. Taxpayers can e-verify using any of the following methods:
Aadhaar-based OTP sent to the registered mobile number.
Net banking through authorized banks linked with the PAN.
Demat or bank account-based electronic verification code (EVC).
Using a Digital Signature Certificate (DSC) for certain categories. Alternatively, taxpayers can print and sign the ITR-V acknowledgment and send it via speed post to CPC Bengaluru. Once verified, the Income Tax Department processes the return and initiates refund, if applicable.
Q6. Can incorrect bank details cause my income tax refund to be delayed or rejected? Yes, incorrect or unvalidated bank details are one of the leading causes of refund delays and ITR rejection. If the account number, IFSC code, or holder’s name does not match PAN records, the refund cannot be processed. To prevent this, taxpayers must ensure their bank account is active, linked to PAN, and pre-validated on the e-filing portal before filing. TaxBuddy’s system automatically checks for such mismatches and alerts users to correct them in real-time, ensuring that refund credit happens smoothly without delays.
Q7. Which ITR form should I file if I have income from both salary and business? Taxpayers earning both salary and business income should generally file ITR-3 or ITR-4, depending on their business structure and method of accounting.
ITR-3 is suitable for individuals and HUFs having income from business or profession under the normal provisions of the Income Tax Act.
ITR-4 (Sugam) is for those opting for the presumptive taxation scheme under Section 44AD, 44ADA, or 44AE. Filing the correct form ensures accurate reporting and prevents rejection during processing. TaxBuddy’s automated system selects the appropriate ITR form based on income sources, eliminating confusion.
Q8. How can I check if my ITR has been rejected? To check whether your ITR has been rejected, log in to your account on the Income Tax e-filing portal and go to the “View Filed Returns” section. The status column will indicate if the return has been “Rejected” or “Invalid.” Clicking on the acknowledgment number provides detailed reasons, such as missed verification or data inconsistencies. Once the reason is identified, corrections can be made, and the return can be refiled promptly. Platforms like TaxBuddy notify users instantly if their return faces processing issues, helping them take corrective action quickly.
Q9. Can I correct a rejected return after the due date? Yes, in some cases. If the rejection occurred due to technical issues or missed verification, the taxpayer is allowed a grace period to rectify the error and refile the return. However, if the rejection was due to incorrect data or use of the wrong ITR form, the taxpayer must refile within the timeline allowed under Section 139(5) for a revised return. It’s important to act quickly since rejections left unresolved can lead to penalties or loss of refund eligibility. Using guided tools like TaxBuddy ensures that all corrections are done in accordance with the latest CBDT notifications.
Q10. What documents are required for re-filing a rejected ITR? To refile a rejected ITR, the taxpayer must gather all relevant documents to ensure accuracy. These typically include:
Form 16 from employers for salary details and TDS information.
Form 26AS to verify tax credits and advance tax payments.
Annual Information Statement (AIS) for additional income such as interest, dividends, or capital gains.
Bank account details and pre-validation proof.
Investment proofs for deductions under Sections 80C to 80U, if applicable. Having these documents ready helps ensure the refiled return is complete and error-free.
Q11. Does missing verification make my ITR invalid? Yes. If an Income Tax Return is not verified within 30 days of submission, it is treated as invalid under the Income Tax Act. An invalid return means that no legal filing exists for that financial year, which could lead to interest and penalties for non-compliance. Taxpayers who miss the verification deadline can refile a fresh return, provided the due date or extended time limit allows it. To avoid this, platforms like TaxBuddy send automated verification reminders to ensure users complete the process on time.
Q12. How can TaxBuddy help in preventing ITR rejection? TaxBuddy minimizes the chances of ITR rejection through an AI-driven system that validates every piece of data before submission. It automatically imports and reconciles data from Form 16, Form 26AS, and AIS to detect mismatches early. The platform also checks for bank account pre-validation, correct ITR form selection, and completeness of personal details. Additionally, users receive timely reminders for e-verification and correction of discrepancies. With expert-assisted support available for complex filings, TaxBuddy ensures an error-free, compliant, and seamless tax filing experience.
Comments