By Revenue Dynamics Tax Advisory

Published: 10 December 2025

Category: Income Tax&GST / Tax Advisory

1. Introduction - GST and Income Tax Filing Mistakes

Most GST and Income Tax notices are not because businesses intentionally do anything wrong…

They happen because of small filing mistakes that go unnoticed.

This guide explains the 5 modern mistakes that directly trigger GST or Income Tax notices — and how to avoid them.

2. Why This Topic Matters

GSTN, ITD, AIS 2.0, and e-invoice systems are now deeply integrated. That means even a small mismatch can be flagged instantly.

Avoiding these mistakes saves businesses from:

✔ Scrutiny

✔ Late fees

✔ Blocked ITC

✔ Interest payments

✔ Reconciliation headaches

3. The 5 Filing Mistakes That Trigger Notices (And Fixes)

🔴 Mistake 1: Claiming Full ITC from IMS Without Checking Eligibility (GST)

IMS shows all invoices uploaded by vendors, including:

• Current-month invoices (not yet due)

• Future-period invoices

• E-invoice pushes

• Incorrect uploads by vendors

Businesses assume, “If it appears in IMS, I can claim it.”

❌ Wrong — IMS ≠ Eligible ITC.

Why It Triggers Notices

Dept now checks:

• ITC period mismatch

• Invoices from unregistered suppliers

• Invoices uploaded but tax not paid by vendor

• Section 16 errors (possession, receipt, payment, tax payment)

✔ FIX:

• Claim ITC only for the tax period

• Check vendor filing status

• Use a monthly ITC eligibility filter

• Maintain invoice-level match proof

🔴 Mistake 2: E-way Bill & GSTR-1 Mismatch (GST)

Dept cross-verifies:

E-way Bill (actual movement) vs GSTR-1 (reported sales)

If quantity/value differs, → system triggers scrutiny.

Common mismatch reasons:

• Wrong vehicle details

• Duplicate consignments

• Cancelled E-way bills are not updated

• Different invoice values

• E-way bill generated but not reported in GSTR-1

✔ FIX:

• Ensure E-way bill values match GSTR-1

• Maintain outward supply register

• Monthly automated matching

• Fix cancelled or incorrect E-way bills immediately

🔴 Mistake 3: AIS 2.0 Mismatch (Income Tax)

AIS now pulls data from:

• Banks

• UPI

• Mutual funds

• EPFO

• Brokers

• TDS/TCS filings

This creates duplicate entries, incorrect amounts, or unexpected incomes.

Why It Triggers Notices:

If values mismatch with the return filed, the system generates:

• Under-reporting

• Over-reporting

• Variance alerts

✔ FIX:

• Compare AIS with your books

• Use “AIS feedback” to correct data

• Reconcile 26AS + AIS + Form 16 before filing

🔴 Mistake 4: Unreported Income Sources in AIS/26AS (Income Tax)

This is now one of the biggest triggers for automated IT notices.

Examples of unreported income appearing in AIS:

• Bank FD interest

• Dividend income

• Property rent

• Capital gains

• Foreign remittances

• Payment gateways

• Online platform settlements

Taxpayers often forget to include them.

✔ FIX:

• Download AIS → check every line

• Report all income sources, even if TDS deducted

• Maintain annual income summary sheet

🔴 Mistake 5: Claiming Personal Expenses as Business Expenses (Income Tax)

Common expenses wrongly claimed:

• Fuel for personal vehicles

• Household rent

• Mobile bills for family usage

• Trips and vacations

• Online purchases

This leads to:

• Disallowed expenses

• Higher taxable income

• Penalties during assessment

✔ FIX:

• Segregate personal & business expenses

• Keep proper bills & business justification

• Maintain a monthly expense tracker

4. Expert Insights

From our experience managing hundreds of GST & IT filings:

💡 Most notices don’t come from big fraud — they come from small mismatches.

💡 IMS visibility does NOT mean ITC eligibility.

💡 AIS must be cleaned before filing — not after.

RDTA ensures your filings are accurate, eligible, and notice-proof.

5. Summary / Call to Action

5 mistakes to avoid:

✔ Wrong ITC claim from IMS

✔ E-way bill vs GSTR-1 mismatch

✔ AIS 2.0 differences

✔ Unreported income in AIS/26AS

✔ Personal expenses claimed as business

👉 Want your GST & IT filing handled professionally, with zero errors?

RDTA handles complete compliance for small businesses & professionals.

📞 9710675224

🌐 www.rdtaxadvisory.in

📧 info@rdtaxadvisory.in