As the tax season for 2026 approaches, financial experts highlight that in 2025, common errors were associated with the evolving income landscape in India. With a rise in individuals earning from various sources, discrepancies between reported income and tax records have become prevalent.
Sarvjeet Virk, the co-founder and Managing Director of Finvasia, elaborated on the reasons behind these increasing errors. He mentioned that individual finances now encompass salary, freelancing, digital earnings, interest income, and market-related gains, each subject to different tax treatments. This diversity in income sources leads to disparities between taxpayer reports and data in the Annual Information Statement (AIS) and Tax Information Summary (TIS).
Capital gains emerged as a significant challenge in 2025, with many taxpayers struggling to accurately report transactions involving equity, mutual funds, and digital assets. Omissions such as holding periods, bonus issues, or buybacks often resulted in misclassification, impacting the final tax outcome.
Furthermore, a notable issue was the inconsistency between personal calculations and information reflected in the AIS, TIS, and Form 26AS. Virk emphasized the importance of aligning Form 26AS with the correct Tax Deducted at Source (TDS) for each income source, ensuring that bank-reported interest and TDS entries match individual disclosures to avoid discrepancies during filing.
In 2025, the complexity of income structures grew for millions of taxpayers, including earnings from various sources like SIP withdrawals, RSU vesting, gig work, intraday trades, influencer payments, and micro digital income. Virk highlighted the need for taxpayers to integrate these diverse income streams throughout the year to facilitate accurate deductions, precise capital gains reporting, and a streamlined filing process.
Experts advocate for a data-driven approach in tax planning, emphasizing the shift towards digital reporting and the necessity of maintaining accurate records, regular reconciliation, and a deep understanding of tax regulations for different income sources to ensure a smooth tax return process in 2026.
The key takeaway from the tax mistakes of 2025 is the importance of maintaining organized records, early verification of entries in AIS/TIS, and a thorough grasp of tax rules concerning modern income streams to avoid pitfalls in the upcoming tax season.