Understanding India's tax landscape can be challenging for small businesses, freelancers, and salaried professionals alike. GST registration, income tax filing, and other tax compliance requirements often involve detailed documentation, accurate reporting, and adherence to strict deadlines. Even minor oversights-like mismatched PAN details, incorrect bank information, or delays in responding to notices-can lead to rejections, penalties, or compliance complications.
Navigating the most frequent mistakes in GST registration and income tax filing, and knowing how to proactively prevent them, are essential for smooth business operations and personal tax compliance.
The common errors during GST registration are explained below for better understanding, which are as follows:
1. Incorrect or Mismatched PAN Details
GST registration is linked to the applicant's PAN, and any mismatch between the PAN and business name or type can immediately halt the registration process. Always cross-check PAN details on the Income Tax Department portal. It is important to ensure that the PAN entered matches exactly with the registered business or individual name, including special characters and spacing.
2. Mismatch in Aadhaar Verification
One of the most frequent GST registration errors occurs during Aadhaar authentication. The process often fails when the linked mobile number is inactive or when OTPs aren't received, leading to unnecessary delays. To prevent this, verify that your Aadhaar information and mobile number are up to date. If repeated failures occur, opt for manual verification.
3. Wrong Selection of Business Type
Incorrect selection of Business type due to Confusion between "Proprietorship," "Partnership," "LLP," or "Private Limited Company" can lead to document mismatches and registration delays. Always refer to your incorporation or partnership documents before selecting the business type.
4. Improper Documentation Uploads
GST registration requires accurate submission of proof documents like business address, bank account, and identity. Poor quality uploads or incomplete documentation can trigger rejections. Ensure that all documents are clear, correctly formatted (PDF/JPEG), and within the file size limits. Avoid scanning multiple documents together.
5. Inconsistent Address Details
Mismatched business addresses on rent agreements, utility bills, and registration forms are a frequent cause of GST registration errors. All documents should display the same address, word-for-word. For co-working spaces, provide a No Objection Certificate (NOC) from the owner.
6. Using Personal Bank Accounts for Business
Many small businesses use personal bank accounts during GST registration, creating compliance issues during returns filing. Open a business bank account and use its bank statement or cancelled cheque for registration.
7. Failure to Track ARN and Registration Status
Businesses often forget to monitor their Application Reference Number (ARN) after submission, resulting in missed notices or missed due dates. Always regularly track the ARN status on the GST portal. Use dashboards or automated tools to send reminders and track end-to-end.
8. Wrong Jurisdiction Selection
There is a common error while selecting the wrong state, district, or GST officer jurisdiction, which can trigger manual verification and delay registration. Use the "Know Your Jurisdiction" feature on the GST portal and match it with your official address proofs.
9. More Than One GST Registration
Applying for multiple GSTINs unnecessarily can lead to rejection and compliance issues. Apply for additional GSTINs only when you have a legitimate business presence, such as a warehouse or office, in another state.
10. Delay in Responding to Notices
GST officers can raise queries post-submission. Ignoring or delaying responses can result in rejection. Check your GST portal inbox and emails regularly. Respond promptly with valid documentation.
Common Income Tax Filing Errors
Beyond GST, income tax compliance is another critical area where mistakes are common.
1. Selecting the Wrong ITR Form
Choosing the incorrect ITR form is one of the most frequent mistakes. The appropriate form depends on the taxpayer's category and sources of income. Filing the wrong ITR form leads to notices or rectification requests. Always verify your category (salaried, business, or professional) before submission.
2. Wrong PAN and Bank Details
Incorrect bank details in ITR filings are very common, such as wrong IFSC codes, wrong account numbers, PAN not linked to Aadhaar, or forgetting to pre-validate the bank account. Due to errors in details, refunds are delayed or bounce back altogether. It is important to pre-validate the bank account on the portal, confirm the ITR PAN-Aadhaar linkage, and always review the profile details before submitting the return.
3. Forgetting Some Income Sources
Many people forget to declare interest from savings accounts, dividends, exempt income, or capital gains from stocks and mutual funds. This can cause mismatches with AIS and Form 26AS, leading to notices. Cross-check all income and report everything, even if tax-free.
4. Validation Errors on the Portal
Sometimes the portal shows "Please fill mandatory fields" even when everything is complete.Delete and re-enter the schedule or use the Excel utility for reliability.
5. Missing Deductions or Wrong Tax Regime
Taxpayers often miss claiming deductions (80C, 80D, 24b) because they select the wrong tax regime. Review your tax regime, claim all eligible deductions, and keep documentation.
6. Forgetting E-Verification
Filing without e-verifying within 30 days makes the ITR invalid, leading to penalties.E-verify via Aadhaar OTP, net banking, or DSC immediately.
7. NRI Filing Mistakes
NRIs may declare wrong residential status, skip India-sourced income, or miss NRE/NRO account details. Select the correct residential status, pick the right ITR form, and report all Indian income.
8. Technical Errors Before Submission
Portal errors like account type mismatch, TDS mismatch, or capital gains errors may appear at the final stage. Recheck entries, use "Recompute," and correct minor errors before submitting.
Conclusion
GST registration mistakes, income tax filing errors, and delays in responding to notices are common hurdles for businesses and individuals. However, careful documentation, correct form selection, and proactive tracking can prevent most issues. Regularly verifying PAN, Aadhaar, business details, and bank accounts ensures smooth GST compliance. Likewise, timely filing and e-verification of ITRs prevent penalties and complications. By staying vigilant and using tools for tracking and compliance management, businesses and taxpayers can reduce the risk of GST compliance penalties, avoid repeated follow-ups, and ensure seamless tax registration and filing. Prevention and awareness are the keys to staying compliant from Day 1.
SetIndiabiz Private Limited is a trusted compliance platform in India, specializing in GST registration and income tax filing services. They help businesses avoid common GST mistakes by guiding correct registration, ensuring accurate GSTR filings, and providing proactive tracking. Their income tax services include proper ITR filing, e-verification, and assistance in correcting errors. By combining GST and income tax compliance under one roof, SetIndiabiz ensures businesses stay penalty-free and fully compliant. Their professional support simplifies regulatory processes and reduces compliance risks.
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