July 31 ITR deadline: How to avoid wrong forms, refund delays, tax notices before filing

With the July 31 income tax return (ITR) filing deadline fast approaching, tax experts are advising taxpayers not to rush through the process, warning that common mistakes—from selecting the wrong ITR form to overlooking income mismatches—could delay refunds or even trigger tax notices.

According to the Income Tax Department, more than 5 crore ITRs had been filed as of July 29, with over 4.11 crore returns verified and more than 2.3 crore processed. The figures indicate that the filing system is functioning smoothly, leaving little reason for taxpayers to delay filing in the hope of a deadline extension.

Adhil Shetty, CEO of BankBazaar, said one of the biggest errors taxpayers make is assuming ITR-1 is suitable for everyone.

"Many salaried taxpayers assume ITR-1 is the right form, but if you've earned capital gains or traded in stocks, futures and options during the year, you may need to file ITR-2 or ITR-3 instead. Filing under the wrong form can result in a defective return, delaying your refund and potentially triggering a tax notice," he said.

He also urged taxpayers to reconcile their returns with Form 26AS and the Annual Information Statement (AIS) before submission. Any mismatch between the income reported and the information already available with the tax department may invite scrutiny or require the return to be revised later.

Don't bank on a deadline extension

While speculation over an extension surfaces every year, Shetty said taxpayers should plan around the notified July 31 deadline unless the government officially announces otherwise.

He noted that deadline extensions have historically been granted only under exceptional circumstances, such as major technical glitches or administrative reasons. Waiting until the last moment reduces the time available to correct validation errors or deal with portal-related issues.

ITR Filing Checklist: Follow This Flow Before You Click 'Submit'

Step	Action	If You Skip It...
1️⃣	Choose the correct ITR form (ITR-1, ITR-2 or ITR-3 based on your income)	Wrong form can make your return defective and delay refunds.
⬇️
2️⃣	Match your income with Form 26AS & AIS	Income mismatches may trigger scrutiny or require a revised return.
⬇️
3️⃣	Report all income, including capital gains and taxable gifts	Missing or incorrect disclosures can attract tax notices.
⬇️
4️⃣	Validate your bank account on the income tax portal	Refund cannot be credited to an unvalidated account.
⬇️
5️⃣	Submit your ITR before July 31	Waiting until the last day leaves little room to fix errors.
⬇️
6️⃣	Complete e-verification immediately after filing	An unverified return is treated as not filed.
⬇️
✅ Final Check	Track refund status and keep supporting documents safely	Helps resolve refund delays or tax queries quickly.

Simple oversights can delay refunds

Filing the return is only one part of the process. According to Shetty, refund delays are often caused by an unvalidated bank account or failure to e-verify the return.

Refunds can only be credited to a bank account that has been validated on the income tax portal. Likewise, a return that is not e-verified within the prescribed time is treated as not filed. Taxpayers should ensure their bank details are accurate and confirm that the return status shows as verified.

ITR helps beyond tax compliance

A timely and accurate ITR also serves purposes beyond meeting tax obligations.

Shetty said lenders often rely on ITRs as proof of income stability, especially for self-employed individuals and those with multiple income sources. A consistent filing history can strengthen a home loan application and help credit card issuers assess repayment capacity and determine suitable credit limits.

Report gifts correctly

Taxpayers who received gifts during the financial year should also be careful while reporting them.

Under Section 56(2)(x) of the Income Tax Act, gifts from specified relatives—including parents, spouse, siblings and children—are exempt from tax irrespective of the amount. However, gifts from friends or other non-relatives become fully taxable if their aggregate value exceeds ₹50,000 in a financial year.

Shetty cautioned against assuming that tax-exempt gifts need not be disclosed. With tighter reporting requirements for exempt income in AY 2026-27, maintaining records such as bank transfer proofs, gift deeds and evidence of relationship can help address any tax department queries.

With only a few days left before the deadline, experts say taxpayers should avoid last-minute filing, choose the correct ITR form, cross-check details with Form 26AS and AIS, validate their bank account and complete e-verification to ensure a hassle-free filing experience.