Top Tax Filing Mistakes First-Time Filers Make | How TaxBuddy Helps Avoid Them

Tax Filing Mistakes First-Time Filers Make (and How TaxBuddy Helps You Avoid Them)

Filing your Income Tax Return (ITR) for the first time can be both exciting and intimidating. While it marks a step toward financial responsibility, the process can also feel overwhelming due to unfamiliar forms, deadlines, and technical terms. Unfortunately, many first-time filers make avoidable mistakes that lead to delays, notices from the tax department, or missed savings opportunities.

The good news? With the right guidance and tools, you can file confidently and avoid these pitfalls. TaxBuddy’s intuitive platform is designed to help you file correctly the first time—without the stress.

Let’s break down the most common mistakes new taxpayers make and see how TaxBuddy helps you sidestep each one.

Mistake 1: Choosing the Wrong ITR Form

One of the most common errors first-time filers make is picking the wrong ITR form. There are multiple ITR types—ITR-1, ITR-2, ITR-3, ITR-4—each suited to specific income sources. Filing with the wrong form can result in your return being treated as defective.

How TaxBuddy Helps:
TaxBuddy asks you simple questions about your income sources (salary, business, capital gains, etc.) and automatically selects the correct ITR form for you. No guesswork, no form confusion.

Mistake 2: Missing the Filing Deadline

The due date for filing ITR for most individuals is 31st July of the assessment year. Missing it can lead to late fees under Section 234F, loss of certain deductions, and delayed refunds.

How TaxBuddy Helps:
TaxBuddy sends timely email and app notifications reminding you of upcoming deadlines. You can even file well before the due date with their quick, guided process.

Mistake 3: Not Reporting All Income Sources

Many first-time filers declare only their salary income but forget to include interest from savings accounts, fixed deposits, rental income, or freelance earnings. Non-disclosure can attract scrutiny.

How TaxBuddy Helps:
The platform auto-fetches your Annual Information Statement (AIS) and Form 26AS from the Income Tax portal, ensuring every source of income is reported accurately.

Mistake 4: Ignoring Eligible Deductions

Section 80C, 80D, and other deductions can significantly reduce your taxable income. First-time filers often overlook eligible investments like PPF, ELSS, or home loan principal repayment.

How TaxBuddy Helps:
TaxBuddy guides you through deduction-claiming with prompts like, “Have you invested in PPF or ELSS this year?” This ensures you don’t leave money on the table.

Mistake 5: Entering Wrong Bank Details

Incorrect bank account numbers or IFSC codes can delay your tax refund indefinitely.

How TaxBuddy Helps:
TaxBuddy validates your bank details before submission, reducing the chance of refund delays.

Mistake 6: Filing Without Verifying the Return

Filing is not complete until you verify your ITR, either electronically or physically. Many first-time filers forget this step, leading to the return being considered invalid.

How TaxBuddy Helps:
Once your return is filed, TaxBuddy prompts you to e-verify immediately through Aadhaar OTP, net banking, or EVC—making it a one-click step.

Mistake 7: Misreporting TDS or Advance Tax

If you’ve had tax deducted at source (TDS) or paid advance tax, these must be accurately reported. Misreporting can cause mismatch notices.

How TaxBuddy Helps:
The platform auto-imports your TDS details from Form 26AS and reconciles them with your income entries, ensuring no mismatches.

Mistake 8: Relying Solely on Form 16

While Form 16 is crucial for salaried employees, it may not cover all income or deductions. Filing only based on Form 16 can lead to incomplete returns.

How TaxBuddy Helps:
TaxBuddy combines Form 16 data with other sources like AIS, bank interest certificates, and investment proofs to prepare a complete return.

Mistake 9: Not Keeping Copies of Filed Returns and Proofs

Keeping records of your filed ITR, acknowledgments, and investment proofs is important for future reference, especially if you get a notice.

How TaxBuddy Helps:
Your TaxBuddy dashboard stores all past returns and documents securely in one place, accessible anytime.

Mistake 10: Falling for Fake Filing Services

Some first-time filers, looking for low-cost help, end up sharing sensitive data with unverified agents. This can lead to fraud or misuse of personal information.

How TaxBuddy Helps:
TaxBuddy is a trusted, RBI-compliant, and data-secure platform. Your personal and financial details are encrypted and never shared without consent.

Step-by-Step Filing with TaxBuddy for First-Timers

Step 1: Sign up on www.taxbuddy.com or download the app.
Step 2: Select the appropriate filing option—DIY or assisted.
Step 3: Upload your Form 16, AIS, and other relevant documents.
Step 4: Answer simple prompts to add any other income or deductions.
Step 5: Review your return for errors—TaxBuddy will highlight any issues.
Step 6: File directly from the platform and e-verify your ITR.
Step 7: Save your acknowledgment for future reference.

Why First-Time Filers Should Consider TaxBuddy

• Guided Process: No need to understand every tax law; the platform guides you.
  

• Expert Backup: If you’re stuck, you can switch to expert-assisted filing instantly.
  

• Error Prevention: AI-powered checks flag common mistakes before submission.
  

• Cost-Effective: Affordable pricing compared to traditional CA services.
  

• Convenient: File anytime, anywhere from your mobile or laptop.
  

Pro Tips for First-Time Filers

• Start early; don’t wait until the last week before the deadline.
  

• Keep all documents (Form 16, investment proofs, interest certificates) handy.
  

• Double-check personal details like PAN, Aadhaar, and bank account info.
  

• Review your ITR before submission to ensure accuracy.
  

Final Word

Your first tax filing experience doesn’t have to be stressful or error-prone. By being aware of the most common mistakes and using a reliable platform like TaxBuddy, you can file your ITR accurately, claim all eligible deductions, and avoid unnecessary notices from the tax department.

TaxBuddy’s blend of automation, expert guidance, and error-proofing makes it the perfect partner for first-time filers in 2025. Instead of navigating the complexities of tax laws alone, you get a simple, secure, and stress-free filing experience—right from your phone or laptop.

BIO.

Sarah Mitchell, a digital content specialist at SEOEngine.agency, Sarah focuses on making technical tax topics accessible. Since 2022, she has produced content for TaxBuddy aimed at simplifying ITR filing for everyday taxpayers.