Everything you need to know, which form to use, documents required, step-by-step e-filing process, and how to choose between old and new tax regime. Updated for Assessment Year 2026-27.
The last date to file Income Tax Return (ITR) for Assessment Year 2026-27 (Financial Year 2025-26) is July 31, 2026, for salaried individuals. Most salaried employees with income up to ₹50 lakh should file ITR-1 (Sahaj), on the Income Tax Department’s e-filing portal at incometax.gov.in. You’ll need your Form 16, Form 26AS, AIS, bank statements, and investment proofs. The new tax regime is the default option, but you can opt for the old regime if your deductions under Section 80C, 80D, HRA, etc. exceed approximately ₹3.75 lakh.
Quick Facts at a Glance
| Assessment Year | 2026-27 (for income earned in FY 2025-26) |
| Filing Deadline | July 31, 2026 (non-audit individuals) |
| Recommended Form | ITR-1 (Sahaj) for most salaried employees |
| E-Filing Portal | incometax.gov.in |
| Default Tax Regime | New Tax Regime (lower rates, no deductions) |
| Late Filing Penalty | ₹5,000 (₹1,000 if income < ₹5 lakh) |
| Key Document | Form 16 from your employer |
Table of contents
- Quick Facts at a Glance
- 1. Who Must File ITR? (Mandatory vs Voluntary)
- 2. Which ITR Form Should You Use?
- 3. Documents You Need Before Filing
- 4. Old Tax Regime vs New Tax Regime – Which to Choose?
- 5. Step-by-Step E-Filing Process on incometax.gov.in
- 6. Key Deductions for Salaried Employees (Old Regime)
- 7. Common ITR Filing Mistakes to Avoid
- 8. Example: Priya’s ITR Filing
- 9. What Happens If You File ITR Late?
1. Who Must File ITR? (Mandatory vs Voluntary)
Filing an Income Tax Return is mandatory if your gross total income (before any deductions) exceeds the basic exemption limit set by the Income Tax Department. For AY 2026-27, the basic exemption limits as per the Income Tax Act, 1961 are:
| Category | Old Tax Regime | New Tax Regime |
|---|---|---|
| Individuals (below 60 years) | ₹2,50,000 | ₹3,00,000 |
| Senior Citizens (60-80 years) | ₹3,00,000 | ₹3,00,000 |
| Super Senior Citizens (80+ years) | ₹5,00,000 | ₹3,00,000 |
However, even if your income is below these limits, you should voluntarily file ITR if you want to apply for a home loan or credit card (banks ask for ITR receipts), claim a tax refund for excess TDS deducted, carry forward capital losses to offset against future gains, or need visa processing for foreign travel (many embassies require ITR receipts for the last 2-3 years).
Pro Tip
Even if your employer has deducted TDS and your tax liability is zero, filing ITR creates a financial trail that strengthens your creditworthiness. Think of it as your financial resume.
2. Which ITR Form Should You Use?
Choosing the wrong form is one of the most common reasons for ITR rejection. As a salaried employee, you’ll most likely use either ITR-1 or ITR-2. Here’s how to decide:
| Criteria | ITR-1 (Sahaj) | ITR-2 |
|---|---|---|
| Total income limit | Up to ₹50 lakh | No limit |
| Salary income | Yes | Yes |
| One house property | Yes | Yes (multiple properties too) |
| Interest, FD, savings income | Yes | Yes |
| Capital gains (stocks, MF, property) | No – use ITR-2 | Yes |
| Foreign income or foreign assets | No – use ITR-2 | Yes |
| Multiple house properties | No – use ITR-2 | Yes |
| Agricultural income above ₹5,000 | No – use ITR-2 | Yes |
Simple rule: If you’re a salaried employee earning under ₹50 lakh with no stock market gains, no foreign assets, and no more than one house, use ITR-1. The moment you sell mutual funds or stocks for a profit (even ₹1), you need ITR-2.
Important
If you redeemed any mutual fund units or sold stocks in FY 2025-26, you cannot use ITR-1 even if the gains are below ₹1 lakh (exempt LTCG). You must report them in ITR-2. Many people miss this and face notices from the Income Tax Department.
3. Documents You Need Before Filing
Gather these documents before you start. Having everything ready makes the e-filing process take just 15-20 minutes instead of hours of back-and-forth.
Must-Have Documents
- Form 16 (Part A & Part B): Your employer issues this by June 15. It contains your salary breakup, TDS deducted, and deductions claimed.
- Form 26AS: Download from TRACES portal or incometax.gov.in. It shows ALL TDS deducted against your PAN from every source.
- Annual Information Statement (AIS): The expanded version of 26AS showing all financial transactions reported against your PAN (mutual fund purchases, property transactions, high-value spends).
- Bank statements: All savings accounts. You need interest earned on savings (for claiming deduction under 80TTA up to ₹10,000).
- PAN card and Aadhaar card: Aadhaar must be linked with PAN. If not linked, your return may not be processed.
If You Claim Deductions (Old Regime)
- Section 80C proofs: PPF passbook, ELSS statement, LIC premium receipts, tuition fee receipts, home loan principal certificate
- Section 80D proofs: Health insurance premium receipts (self + parents)
- HRA exemption: Rent receipts, rent agreement, landlord PAN (if rent > ₹1 lakh/year)
- Home loan: Interest certificate from bank (Section 24b deduction up to ₹2 lakh)
- NPS contribution: Statement showing contribution under Section 80CCD(1B) for extra ₹50,000 deduction
- Donation receipts: 80G receipts for charitable donations
Not sure which tax regime saves you more?
Use the PlanMyReturns Tax Calculator to compare your tax liability under both old and new regimes with your actual salary and deductions. Calculate Your Tax Now →
4. Old Tax Regime vs New Tax Regime – Which to Choose?
The new tax regime is the default option from FY 2023-24 onwards. It offers lower tax rates but removes almost all deductions and exemptions. The old regime has higher rates but allows deductions under 80C, 80D, HRA, home loan interest, etc. Your choice depends entirely on how much you can claim in deductions.
| Income Slab | Old Regime Rate | New Regime Rate |
|---|---|---|
| Up to ₹3,00,000 | Nil | Nil |
| ₹3,00,001 – ₹7,00,000 | 5% (above ₹2.5L) / 20% (above ₹5L) | 5% |
| ₹7,00,001 – ₹10,00,000 | 20% | 10% |
| ₹10,00,001 – ₹12,00,000 | 30% | 15% |
| ₹12,00,001 – ₹15,00,000 | 30% | 20% |
| Above ₹15,00,000 | 30% | 30% |
General rule of thumb: If your total deductions (80C + 80D + HRA + home loan interest + NPS + standard deduction) exceed approximately ₹3.75 lakh, the old regime likely saves you more tax. Below that, the new regime wins.
Decision Framework
Choose New Regime if: You don’t have a home loan, don’t pay rent in a metro, and your 80C investments are below ₹1.5 lakh. Freshers and employees in their first 2-3 years often benefit here.
Choose Old Regime if: You have a home loan (₹2L interest deduction), pay rent in a metro (HRA), max out 80C (₹1.5L), have health insurance for parents (80D), and contribute to NPS (80CCD). Senior professionals with families typically benefit here.
5. Step-by-Step E-Filing Process on incometax.gov.in
Here’s the exact process to file your ITR online. As of AY 2026-27, the entire process is digital, no paperwork required.
Step 1: Log in to the e-Filing Portal
Go to incometax.gov.in and log in with your PAN as the User ID. If you’re a first-time filer, register first using your PAN and Aadhaar details.
Step 2: Go to e-File → Income Tax Returns → File Income Tax Return
Select Assessment Year 2026-27, filing mode as “Online”, and your status as “Individual”.
Step 3: Select the Correct ITR Form
The portal may auto-suggest the right form based on your pre-filled data. For most salaried employees, select ITR-1. If you have capital gains, select ITR-2.
Step 4: Choose Your Tax Regime
You’ll be asked to select Old or New tax regime. This is important, use the PlanMyReturns Tax Calculator to compare before choosing. Once selected and return is filed, you can only switch regime at the time of filing the next year’s return.
Step 5: Review Pre-Filled Data
The portal auto-fills salary details from Form 16, TDS from 26AS, and bank interest from AIS. Verify every field carefully; sometimes, employer-reported figures differ from your actual salary slips. Cross-check with your Form 16.
Step 6: Enter Deductions (Old Regime Only)
If you chose the old regime, enter your deductions: 80C investments (PPF, ELSS, LIC, etc.), 80D health insurance, HRA exemption, 80CCD(1B) NPS, home loan interest under Section 24(b), and any other applicable sections.
Step 7: Verify Tax Computation
The portal calculates your total tax liability. Compare this with the TDS already deducted (shown in Form 26AS). If TDS exceeds tax liability, you’ll get a refund. If liability exceeds TDS, you’ll need to pay the balance via challan.
Step 8: Pay Balance Tax (If Any)
If you have tax due, pay via the “Pay Tax” option on the portal using net banking, UPI, or debit card. Save the challan receipt, you’ll need the BSR code and challan number.
Step 9: Submit and E-Verify
After submission, e-verify your return within 30 days. You can do this via Aadhaar OTP (fastest), net banking, bank account EVC, or Demat account EVC. Without e-verification, your return is treated as not filed.
Don’t Skip This
E-verification is the most commonly missed step. Your ITR is not valid until e-verified. Set a reminder immediately after filing. Aadhaar OTP is the fastest method, takes 30 seconds.
6. Key Deductions for Salaried Employees (Old Regime)
If you’re filing under the old tax regime, these are the deductions that can significantly reduce your tax liability. Every salaried employee should be aware of these sections under the Income Tax Act, 1961.
| Section | Deduction For | Maximum Limit | Common Instruments |
|---|---|---|---|
| 80C | Investments & expenses | ₹1,50,000 | PPF, ELSS, EPF, LIC, NSC, tuition fees, home loan principal |
| 80CCD(1B) | NPS contribution | ₹50,000 (above 80C) | National Pension System Tier-1 |
| 80D | Health insurance | ₹25,000 (self) + ₹50,000 (senior parents) | Mediclaim, preventive health check-up |
| 80TTA | Savings account interest | ₹10,000 | Interest from savings accounts |
| 24(b) | Home loan interest | ₹2,00,000 | Self-occupied property loan interest |
| HRA | Rent paid | Calculated (see formula below) | Actual rent for rented accommodation |
| Standard Deduction | Flat deduction on salary | ₹75,000 | Automatic, no proof needed |
The HRA exemption is calculated as the minimum of three amounts: actual HRA received from employer, rent paid minus 10% of basic salary, or 50% of basic salary (metro cities) / 40% of basic salary (non-metro). You can use the PlanMyReturns HRA Calculator to find your exact exemption amount.
7. Common ITR Filing Mistakes to Avoid
After helping lakhs of people file their returns, these are the mistakes we see most often. Avoiding these can save you from notices, penalties, and unnecessary stress.
- Not reporting capital gains from mutual fund redemptions. Even if your LTCG is below ₹1.25 lakh (exempt), you must report it in ITR-2. The AIS shows all your mutual fund transactions the IT department knows.
- Mismatch between Form 16 and AIS data. Always cross-check both documents before filing. If there’s a mismatch, contact your employer’s HR/payroll team first.
- Forgetting to report interest from FDs and savings accounts. Banks report this data to the IT department. Even if TDS is deducted on FD interest, you must declare it in your ITR.
- Not e-verifying after submission. Your ITR is invalid until e-verified. You have 30 days. Aadhaar OTP is the easiest method.
- Choosing the wrong ITR form. Using ITR-1 when you should use ITR-2 (because of capital gains) leads to rejection and reprocessing.
- Not linking Aadhaar with PAN. If not linked, your return may not be processed and your PAN could become inoperative.
- Claiming HRA without proper documentation. If rent exceeds ₹1 lakh/year, you must have your landlord’s PAN. Without it, the HRA claim may be disallowed.
8. Example: Priya’s ITR Filing
Real Example
Priya Sharma, 29: Software Engineer in Bangalore
Priya earns ₹12,00,000 per year (₹1,00,000/month) at a Bangalore-based IT company. Let’s walk through her ITR filing decision.
Her salary breakup:
Basic Salary₹6,00,000
HRA Received₹3,00,000
Special Allowance₹3,00,000
Gross Salary₹12,00,000
Her deductions (Old Regime):
Standard Deduction₹75,000
EPF (Employee share, 80C)₹72,000
ELSS SIP (80C)₹50,000
PPF (80C)₹28,000
Health Insurance (80D)₹18,000
NPS – 80CCD(1B)₹50,000
HRA Exemption₹1,20,000
Total Deductions₹4,13,000
Tax comparison:
Tax under Old Regime₹72,800
Tax under New Regime₹93,600
Priya saves with Old Regime₹20,800/year
Since Priya’s total deductions (₹4.13 lakh) exceed the ₹3.75 lakh threshold, the old regime saves her ₹20,800. She files ITR-1 (no capital gains), selects the old regime, and e-verifies with Aadhaar OTP in 30 seconds.
Want to do the same calculation for your salary?
Plug in your numbers into the PlanMyReturns Tax Calculator and see which regime saves you more, in under 60 seconds. Compare Old vs New Regime →
9. What Happens If You File ITR Late?
The penalty for filing ITR after July 31, 2026 under Section 234F is ₹5,000. If your total income is below ₹5 lakh, the penalty is reduced to ₹1,000. But the financial cost goes beyond just the penalty:
- Interest under Section 234A: 1% per month on unpaid tax from the due date until filing date. This adds up quickly.
- Cannot carry forward losses: Capital losses and business losses from FY 2025-26 cannot be carried forward if you file late (except house property loss).
- Cannot file revised return: A belated return cannot be revised if you discover an error. A return filed on time can be revised until December 31, 2026.
- Refund delays: If you’re owed a refund, late filing means waiting much longer to receive it. Timely filers typically get refunds within 15-45 days.
Best Practices
File your ITR within the first 2 weeks of July. Early filers get faster refunds because the processing queue is shorter. Don’t wait until July 31 when the portal crashes under load every year.
Frequently Asked Questions
Most salaried employees should use ITR-1 (Sahaj) if their total income is up to ₹50 lakh from salary, one house property, and other sources. Use ITR-2 if income exceeds ₹50 lakh or you have capital gains from stocks or mutual funds.
The last date to file ITR for Assessment Year 2026-27 (Financial Year 2025-26) is July 31, 2026 for salaried individuals and non-audit cases. Late filing attracts a penalty of ₹5,000 under Section 234F.
If your gross total income before deductions exceeds ₹2.5 lakh (old regime) or ₹3 lakh (new regime), filing is mandatory even if your net tax liability is zero after deductions and rebate under Section 87A.
Yes. Use your monthly salary slips, bank statements, and Form 26AS from the TRACES portal. Form 26AS shows all TDS deducted against your PAN. The AIS (Annual Information Statement) on the e-filing portal also has comprehensive transaction data.
If your total deductions (80C + 80D + HRA + home loan interest + NPS + standard deduction) exceed approximately ₹3.75 lakh, the old regime typically saves more. Otherwise, the new regime with its lower tax rates is better. Use the PlanMyReturns Tax Calculator to compare both for your exact salary.
If you don’t e-verify within 30 days of filing, your ITR is treated as not filed. You’ll need to file again and may face late filing penalties. E-verify immediately using Aadhaar OTP, it takes less than a minute.
If you file and e-verify on time, refunds are typically processed within 15-45 days. Ensure your bank account is pre-validated on the e-filing portal and linked with the correct IFSC code.
You don’t need to report investments (purchases), but you must report redemptions (selling or switching). Any capital gains from mutual funds must be reported in ITR-2, even if the gains are below the exempt limit of ₹1.25 lakh LTCG.
