Filing your Income Tax Return (ITR) for Financial Year 2025-26 (Assessment Year 2026-27) is not just a legal obligation — it is a financial record that helps you get loans, visas, and refunds. The last date for most individuals is 31st July 2026. This comprehensive guide walks you through every step: who must file, which form to pick, documents to gather, regime selection, deductions to claim, and how to submit on the e-filing portal.
Assessment Year (AY) 2026-27 covers income earned from 1st April 2025 to 31st March 2026 (Financial Year 2025-26). The ITR you file in 2026 reports this income.
Who Must File an ITR for AY 2026-27?
Filing is mandatory if any of the following conditions apply to you:
- Your gross total income exceeds the basic exemption limit (₹2.5 lakh under old regime; ₹4 lakh under new regime)
- You have deposited more than ₹1 crore in one or more current bank accounts during FY 2025-26
- You have incurred more than ₹2 lakh on foreign travel for yourself or any other person
- You have incurred more than ₹1 lakh on electricity consumption during the year
- Your TDS/TCS has been deducted and you wish to claim a refund
- You are a company or firm — irrespective of profit or loss
- You have income from foreign assets or are a signing authority in a foreign account
- You wish to carry forward losses (capital loss, business loss) to future years
- You are a resident with assets or financial interest outside India
- You received income from property held under a trust or political party
Even if your income is below the exemption limit, filing a NIL return is highly recommended — it serves as income proof for loans, visa applications, and government tenders.
Which ITR Form Should You Use?
| ITR Form | Who Should File | Key Exclusions |
|---|---|---|
| ITR-1 (Sahaj) | Resident individuals with salary/pension, one house property, other sources — total income up to ₹50 lakh | Cannot be used if you have capital gains, foreign income, or business income |
| ITR-2 | Individuals/HUFs with capital gains, foreign income, more than one house property, or income above ₹50 lakh | Cannot be used if you have business/profession income |
| ITR-3 | Individuals/HUFs with income from business or profession (including F&O trading) | N/A |
| ITR-4 (Sugam) | Individuals, HUFs, and firms opting for presumptive taxation under Sections 44AD, 44ADA, or 44AE — income up to ₹50 lakh | Cannot be used if you have capital gains or foreign income |
| ITR-5 | Firms, LLPs, AOPs, BOIs, and other entities (not companies or trusts) | N/A |
| ITR-6 | Companies (other than those claiming exemption under Section 11) | N/A |
| ITR-7 | Trusts, political parties, research institutions filing under Sections 139(4A)–139(4D) | N/A |
Documents Required for ITR Filing
For Salaried Individuals
- Form 16 (Part A and Part B) from your employer — issued by 15th June 2026
- Form 26AS — Tax Credit Statement (download from TRACES / e-filing portal)
- Annual Information Statement (AIS) and Taxpayer Information Summary (TIS)
- Salary slips for the full year (for cross-verification)
- Bank account statements for all accounts
- Interest certificates from banks/post office for savings and FD interest
- Home loan statement showing principal and interest breakup (for 80C and 24b)
- Rent receipts and landlord PAN (if claiming HRA)
- Investment proofs: LIC premium receipts, PPF passbook, ELSS statements, NSC certificates
- Health insurance premium receipts (80D)
- Children's tuition fee receipts (80C)
For Business / Profession Income
- Profit & Loss Account and Balance Sheet for FY 2025-26
- Books of accounts (if applicable)
- Tax Audit Report in Form 3CA/3CB + 3CD (if turnover exceeds ₹1 crore for business / ₹50 lakh for profession)
- GST returns (GSTR-1, GSTR-3B) for reconciliation
- TDS certificates (Form 16A) from clients
- Advance tax payment challans (Form 280)
- Details of all bank accounts used for business
For Capital Gains
- Demat account statement / broker's capital gains report for equity and mutual funds
- Sale deed and purchase deed for property transactions
- Cost of improvement records for property
- Indexation workings for long-term capital gains on property (if applicable)
- Details of any Section 54 / 54F / 54EC reinvestment for exemption
Step 1: Choose Your Tax Regime — New or Old?
This is the most important decision before filing. The new tax regime is the default for AY 2026-27. You must actively opt for the old regime if it benefits you more.
| Feature | New Tax Regime | Old Tax Regime |
|---|---|---|
| Default regime | Yes (from AY 2024-25) | No — must opt in |
| Basic exemption | ₹4,00,000 | ₹2,50,000 (₹3L senior / ₹5L super senior) |
| Section 87A rebate | Up to ₹12,00,000 (zero tax) | Up to ₹5,00,000 (zero tax) |
| Standard deduction (salary) | ₹75,000 | ₹50,000 |
| 80C deductions | Not available | Up to ₹1,50,000 |
| HRA exemption | Not available | Available |
| Home loan interest (24b) | Not available | Up to ₹2,00,000 |
| 80D (health insurance) | Not available | Up to ₹25,000–₹1,00,000 |
| NPS 80CCD(2) — employer | Available (14%/10%) | Available (14%/10%) |
| Best for | Lower income / fewer deductions | Higher income with large deductions |
If you have business or profession income, you can switch between regimes only once in a lifetime (except in the year you have no business income). Salaried individuals can switch every year. Choose carefully.
Step 2: Compute Your Total Income
Total income is computed under five heads:
- 1Income from Salary — Gross salary minus standard deduction (₹75,000 new / ₹50,000 old) and other exempt allowances
- 2Income from House Property — Rental income minus 30% standard deduction and home loan interest (old regime)
- 3Profits and Gains from Business or Profession — Net profit after allowable business expenses
- 4Capital Gains — Short-term and long-term gains from sale of assets
- 5Income from Other Sources — Interest on savings, FDs, dividends, gifts, etc.
Step 3: Verify Form 26AS and AIS Before Filing
This step is critical and often overlooked. Mismatches between your ITR and Form 26AS / AIS are the primary trigger for income tax notices.
- Log in to the e-filing portal → My Account → View Form 26AS (or directly on TRACES)
- Download your Annual Information Statement (AIS) from the e-filing portal → Services → AIS
- Verify all TDS deducted by employers, banks, and clients matches your records
- Check all financial transactions reported: property purchases, mutual fund redemptions, high-value cash deposits
- If any TDS credit is missing, contact the deductor to file a correction statement
- Reconcile AIS entries with your actual income — submit feedback on incorrect entries directly on the portal
The Income Tax Department cross-matches your ITR with AIS data. If you under-report income that appears in AIS, you will receive a notice under Section 143(1)(a) or 148A. Always reconcile before filing.
Step 4: File Your ITR on the E-Filing Portal
- 1Visit incometax.gov.in and log in with your PAN and password
- 2Go to e-File → Income Tax Returns → File Income Tax Return
- 3Select Assessment Year: 2026-27 and Filing Mode: Online
- 4Choose the correct ITR form based on your income sources (see table above)
- 5Select your tax regime — New or Old (new is pre-selected by default)
- 6Pre-filled data from Form 26AS, AIS, and employer will auto-populate — verify each field carefully
- 7Enter income details under each head: salary, house property, capital gains, other sources
- 8Enter deductions under Chapter VI-A (old regime) or applicable deductions (new regime)
- 9Compute tax, verify advance tax paid and TDS credits
- 10Pay any balance tax due (Self-Assessment Tax) using Challan 280 before submitting
- 11Preview the ITR, check the tax computation summary, and submit
- 12E-verify the return within 30 days of filing (mandatory)
Step 5: E-Verify Your ITR
Filing is incomplete without e-verification. An unverified ITR is treated as not filed. E-verification methods:
| Method | How | Best For |
|---|---|---|
| Aadhaar OTP | OTP sent to mobile linked with Aadhaar | Fastest — recommended for most individuals |
| Net Banking | Login to bank → e-filing portal link | If Aadhaar OTP fails |
| Demat Account EVC | EVC generated via demat account | Investors with demat accounts |
| Bank Account EVC | EVC via pre-validated bank account on portal | Alternative to Aadhaar OTP |
| Digital Signature Certificate (DSC) | Class 3 DSC registered on portal | Companies, tax audit cases |
| Physical ITR-V | Print, sign, and send to CPC Bengaluru by speed post within 30 days | Only if all electronic methods fail |
E-verify immediately after filing — do not wait. The 30-day window starts from the date of filing. After e-verification, you will receive an acknowledgement (ITR-V) on your registered email.
Key Deductions to Claim for AY 2026-27 (Old Regime)
| Section | Eligible Investment / Expense | Maximum Deduction |
|---|---|---|
| 80C | LIC premium, PPF, ELSS, NSC, home loan principal, tuition fees, 5-yr FD | ₹1,50,000 |
| 80CCD(1B) | Additional NPS contribution (Tier I) | ₹50,000 |
| 80D | Health insurance — self, spouse, children | ₹25,000 (₹50,000 if self/spouse is senior citizen) |
| 80D | Health insurance — parents | ₹25,000 (₹50,000 if parents are senior citizens) |
| 80E | Interest on education loan (self / spouse / children) | Actual interest, no upper limit, 8 years |
| 80EEA | Additional home loan interest (affordable housing — loan sanctioned before 31 Mar 2022) | ₹1,50,000 |
| 80G | Donations to PM Relief Fund, approved NGOs, etc. | 50% or 100% of donation (with/without limit) |
| 80GG | Rent paid (if HRA not received from employer) | Least of: ₹5,000/month, 25% of income, actual rent minus 10% of income |
| 80TTA | Interest on savings bank account (non-senior citizens) | ₹10,000 |
| 80TTB | Interest on all deposits — savings, FD, RD (senior citizens only) | ₹50,000 |
| 24(b) | Home loan interest — self-occupied property | ₹2,00,000 |
| 10(13A) | HRA exemption — salaried employees | Least of: actual HRA, 50%/40% of salary, rent minus 10% of salary |
ITR Filing Due Dates for AY 2026-27
| Taxpayer Category | Due Date |
|---|---|
| Individuals, HUFs, firms not requiring audit | 31st July 2026 |
| Businesses requiring tax audit under Section 44AB | 31st October 2026 |
| Companies (all) | 31st October 2026 |
| Transfer pricing cases (international/specified domestic transactions) | 30th November 2026 |
| Revised return (to correct errors in original ITR) | 31st December 2026 |
| Belated return (filed after original due date) | 31st December 2026 |
| Updated return — ITR-U (to declare missed income) | Within 2 years from end of AY (up to 31st March 2029) |
Penalties and Interest for Late Filing
| Default | Consequence | Amount / Rate |
|---|---|---|
| Late filing fee — Section 234F | Filed after 31st July 2026 | ₹5,000 (₹1,000 if total income ≤ ₹5 lakh) |
| Interest on unpaid tax — Section 234A | 1% per month from due date to filing date | On outstanding tax after TDS/advance tax |
| Interest on advance tax shortfall — Section 234B | 1% per month if advance tax < 90% of assessed tax | From 1st April 2026 to date of payment |
| Interest on advance tax deferment — Section 234C | 1% per month on shortfall in each instalment | Computed instalment-wise |
| Penalty for under-reporting income — Section 270A | 50% of tax on under-reported income | Higher if misreporting is proved |
| Prosecution for wilful failure to file — Section 276CC | Imprisonment 3 months to 2 years (up to 7 years if tax > ₹25 lakh) | Applicable in serious cases |
Filing a belated return (after 31st July 2026) means you CANNOT carry forward capital losses or business losses to future years. File on time to preserve this benefit.
Common Mistakes to Avoid While Filing ITR
- Choosing the wrong ITR form — leads to defective return notice under Section 139(9)
- Not reporting interest income from savings accounts, FDs, and post office deposits
- Forgetting to report exempt income like PPF maturity, agricultural income (must be disclosed even if exempt)
- Not reconciling TDS credits with Form 26AS — claiming TDS not reflected in 26AS leads to demand
- Entering incorrect bank account details — causes refund failure
- Not e-verifying the return within 30 days — ITR treated as not filed
- Ignoring AIS entries — unreported transactions trigger scrutiny notices
- Claiming deductions without actual investment proof — leads to disallowance during assessment
- Not reporting foreign assets, foreign bank accounts, or ESOP income from foreign companies
- Filing under the wrong regime — especially for those with business income who have already exercised their option
ITR Filing Checklist for AY 2026-27
- 1Collect Form 16 from employer (available after 15th June 2026)
- 2Download Form 26AS and AIS from the e-filing portal
- 3Reconcile TDS credits and income entries in AIS with your records
- 4Gather all investment proofs, bank statements, and interest certificates
- 5Decide: New Tax Regime or Old Tax Regime — compute tax under both
- 6Select the correct ITR form based on your income sources
- 7Log in to incometax.gov.in and start filing online
- 8Verify pre-filled data — correct any errors before submission
- 9Enter all income, deductions, and tax payments accurately
- 10Pay any balance Self-Assessment Tax (Challan 280) before submitting
- 11Submit the ITR and e-verify immediately via Aadhaar OTP or net banking
- 12Save the ITR-V acknowledgement for your records
ITR filing for AY 2026-27 involves careful regime selection, accurate income reporting, and timely submission. Our Chartered Accountants at Bhowal Associates handle the entire process for you — from Form 26AS reconciliation and regime comparison to filing and e-verification — ensuring maximum refund and zero errors.