Got multiple source of income? Here's how to tax returns, use correct forms

Business Standard

2 days ago

Filing Income Tax returns (ITR) is complicated if have income from multiple sources like salary, rent, stock trading or as a social media influencer. Mistakes in disclosure or selecting forms can lead to information not matching tax records and scrutiny by the authorities. Experts explain how to avoid tax notices while filing ITR this year.
Common ITR filing mistakes with multiple income sources
Salaried individuals often overlook non-salary income such as interest from fixed deposits, rental income, or capital gains, says S R Patnaik, partner (head - taxation) at Cyril Amarchand Mangaldas. "Even when such income is reported, misclassification or failure to claim applicable deductions is a frequent issue, which can lead to mismatches with Form 26AS or AIS," he notes.
Aarti Raote, partner at Deloitte India, says choosing the wrong ITR form is a common mistake. 'For example, someone with consultancy income in addition to salary cannot file ITR-1. They may need to file ITR-3. Filing taxes at the last minute leaves little time to reconcile income details across documents.'
'Even failing to verify your return after e-filing renders it invalid,' says Siddharth Nigotia, senior associate at SKV Law Offices.
How to report multiple incomes correctly while filing ITR
Maintaining records meticulously helps in the task, experts say. 'Verify income receipts from digital platforms like YouTube, stock brokers, or clients against Form 26AS and AIS before filing,' says Patnaik. He advises maintaining bank statements, invoices, and Form 16A for TDS credits to prevent mismatches.
'Include all receipts, YouTube payments, UPI credits, consulting invoices, under the appropriate head, whether it's 'income from other sources' or 'profits and gains of business or profession'. Examine every entry in your AIS for high-value transactions, TDS, dividends, and rent to avoid omissions,' says Nigotia.
Raote also recommends frequent reconciliation. 'Most brokers and consultants issue annual income and TDS summaries. But it is the taxpayer's duty to verify them with the AIS and 26AS periodically.'
What if you misreported an income in ITR?
Missing out on disclosing income doesn't automatically mean trouble if corrected early. 'You can file a revised return under Section 139(5) by December 31, 2025,' says Patnaik. 'Doing so voluntarily, without a notice, helps you avoid penalties.'
Raote notes that if you miss this deadline, 'you can still file an updated return within four years, but additional taxes and penalties would apply.'
Nigotia underscores the importance of proactive revision. 'Revising before due dates generally invites no penalty; Only the interest on underpaid tax may be due.'
Managing multiple bank accounts
Receiving income in multiple bank accounts i.e salary account, business account, or payment apps does not impact tax liability directly, but can complicate tracking.
'All income is taxable regardless of which account it comes into,' says Nigotia. 'Even UPI receipts over Rs 50,000 per year must be reported under appropriate heads.'
Patnaik advises consolidating financial data before filing to ensure no source is forgotten. 'New ITR forms also require disclosure of all bank accounts held in the year, so tracking across accounts is vital,' says Raote.
If you have multiple sources of income, diligently track, classify and reconcile them for taxes. Choose the correct ITR form, check with AIS/Form 26AS, and file revisions early if needed. A little attention to detail can go a long way in keeping the taxman at bay.