Complete Guide to Income Tax Return (ITR) Filing
for AY 2026-27 (FY 2025-26)
Everything you need to know about filing your Income Tax Return for the Financial Year April 2025 – March 2026 — forms, deadlines, slabs, deductions, and more.
📌 Table of Contents
1. What is Income Tax Return (ITR)?
An Income Tax Return (ITR) is an official declaration filed with the Income Tax Department of India, detailing the total income you earned during a financial year, the deductions you are eligible for, and the taxes you have paid or owe. It is the primary document through which the government assesses your tax liability.
For Assessment Year 2026-27, the ITR covers income earned from 1st April 2025 to 31st March 2026 (i.e., FY 2025-26).
Proof of Income
Essential for loan applications, visa processing, and financial credibility.
Claim Tax Refunds
If TDS deducted exceeds your actual tax liability, you can claim a refund.
Carry Forward Losses
File on time to carry forward business or capital losses to future years.
Legal Compliance
Mandatory for individuals/entities whose income exceeds the basic exemption limit.
2. Who Should File ITR?
Filing an ITR is mandatory if any of the following conditions apply to you for FY 2025-26:
| Category | Mandatory Filing Condition |
|---|---|
| Individual / HUF | Gross total income exceeds basic exemption limit (₹2.5L old regime / ₹4L new regime) |
| Salaried Person | Income from salary exceeds exemption limit or TDS has been deducted |
| Business / Professional | Gross receipts/turnover exceed prescribed limits or income exceeds basic exemption |
| Company / LLP / Firm | Mandatory irrespective of profit or loss |
| Any Person | Deposited ₹1 crore+ in bank accounts, paid ₹2L+ foreign travel expenses, ₹1L+ electricity bills |
| Any Person | Has foreign assets / foreign income or is a signing authority of foreign accounts |
| Any Person | Claiming tax refund on excess TDS/TCS deducted |
| Any Person | Wants to carry forward losses to next year |
3. ITR Forms – Which One to Use?
Selecting the correct ITR form is critical. Filing the wrong form can trigger defective return notices. Here is a complete breakdown of all ITR forms applicable for AY 2026-27:
ITR-1 (Sahaj) — For Salaried Individuals
Who can use it:
- Resident Individual (not Ordinarily Resident or Non-Resident)
- Total income up to ₹50 lakh
- Income from: Salary/Pension, One House Property, Other Sources (Interest, etc.)
- Agricultural income up to ₹5,000
- Long-Term Capital Gains (LTCG) under Section 112A up to ₹1.25 lakh
Who CANNOT use ITR-1:
- Directors of a company
- Persons with foreign assets or foreign income
- Persons with income from more than one house property
- Those who have brought forward losses from previous years
ITR-2 — Individuals & HUFs with Capital Gains
Who can use it:
- Individuals and HUFs with no income from business or profession
- Income from: Salary, Multiple House Properties, Capital Gains, Foreign Income/Assets
- Income from a company as a director
- Any amount of capital gains (LTCG / STCG)
- Total income above ₹50 lakh
Key Feature for AY 2026-27: Capital gains must now be reported separately for transactions before and after 23rd July 2024 due to Finance Act 2024 changes in capital gains rates.
ITR-3 — Individuals & HUFs with Business/Professional Income
Who can use it:
- Individuals and HUFs with income from profits and gains of business or profession
- Partners in a partnership firm
- Persons who are directors in a company AND have business income
- Persons with capital gains along with business income
Note: ITR-3 is the most comprehensive form and requires detailed financial statements including P&L account and Balance Sheet in many cases.
ITR-4 (Sugam) — Presumptive Taxation
Who can use it:
- Individuals, HUFs, and Firms (other than LLP) who are residents
- Total income up to ₹50 lakh
- Income from business computed under Section 44AD (turnover up to ₹3 crore, if ≥95% digital transactions)
- Income from profession computed under Section 44ADA (gross receipts up to ₹75 lakh)
- Income from transport business under Section 44AE
- LTCG under Section 112A up to ₹1.25 lakh
Who CANNOT use ITR-4: Directors of companies, persons with foreign assets, persons with losses to carry forward.
ITR-5, ITR-6 & ITR-7 — Entities
ITR-5: For partnership firms, LLPs, Association of Persons (AOPs), Body of Individuals (BOIs), Artificial Juridical Persons, Co-operative Societies, and Local Authorities.
ITR-6: For companies other than companies claiming exemption under Section 11 (charitable/religious trusts). Must be filed electronically.
ITR-7: For persons (including companies) required to furnish return under Sections 139(4A), 139(4B), 139(4C), or 139(4D) — i.e., charitable trusts, political parties, research associations, universities, etc.
4. Income Tax Slabs & Rates for FY 2025-26
For AY 2026-27, taxpayers can choose between the New Tax Regime (default) and the Old Tax Regime. The New Tax Regime offers lower slab rates but restricts most deductions and exemptions.
| Income Slab | Tax Rate | Tax Amount on Slab |
|---|---|---|
| Up to ₹4,00,000 | NIL | — |
| ₹4,00,001 – ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,001 – ₹12,00,000 | 10% | ₹40,000 |
| ₹12,00,001 – ₹16,00,000 | 15% | ₹60,000 |
| ₹16,00,001 – ₹20,00,000 | 20% | ₹80,000 |
| ₹20,00,001 – ₹24,00,000 | 25% | ₹1,00,000 |
| Above ₹24,00,000 | 30% | On balance income |
- Standard Deduction: ₹75,000 for salaried individuals and pensioners
- Section 87A Rebate: Up to ₹60,000 for taxable income up to ₹12,00,000
- Surcharge: Maximum capped at 25% (for income above ₹2 crore)
- Health & Education Cess: 4% on tax + surcharge
- Senior Citizens: Same slabs as others (no separate benefit in New Regime)
- NRIs: Same slab rates, but 87A rebate NOT available to NRIs
The Old Tax Regime retains higher tax rates but allows a wide range of deductions and exemptions like HRA, LTA, 80C, 80D, home loan interest, etc. It remains beneficial for taxpayers with substantial deductions.
| Income Slab | Below 60 yrs | Senior Citizen (60–80 yrs) | Super Senior (80+ yrs) |
|---|---|---|---|
| Up to ₹2,50,000 | NIL | NIL | NIL |
| ₹2,50,001 – ₹3,00,000 | 5% | NIL | NIL |
| ₹3,00,001 – ₹5,00,000 | 5% | 5% | NIL |
| ₹5,00,001 – ₹10,00,000 | 20% | 20% | 20% |
| Above ₹10,00,000 | 30% | 30% | 30% |
- Standard Deduction: ₹50,000 for salaried individuals
- Section 87A Rebate: Up to ₹12,500 for taxable income up to ₹5,00,000
- Surcharge: Maximum up to 37% for income above ₹5 crore
- Key Deductions Available: 80C (₹1.5L), 80D (Medical Insurance), HRA, LTA, Home Loan Interest (24b), NPS (80CCD), 80G, etc.
| Parameter | New Tax Regime | Old Tax Regime |
|---|---|---|
| Default Regime? | ✅ Yes (from FY 2023-24) | ❌ No (must opt-in) |
| Basic Exemption Limit | ₹4,00,000 | ₹2,50,000 (below 60 yrs) |
| Section 87A Rebate | ₹60,000 (up to ₹12L) | ₹12,500 (up to ₹5L) |
| Standard Deduction | ₹75,000 | ₹50,000 |
| HRA Exemption | ❌ Not Available | ✅ Available |
| Section 80C (₹1.5L) | ❌ Not Available | ✅ Available |
| Section 80D (Medical) | ❌ Not Available | ✅ Available |
| Home Loan Interest (24b) | ❌ Not Available | ✅ Available (₹2L) |
| NPS Deduction (80CCD) | ✅ Employer's contribution only | ✅ Both Employer & Own |
| Max Surcharge | 25% | 37% |
| Senior Citizen Benefits | ❌ Same as others | ✅ Higher basic exemption |
| Best For | Low/no deductions, simplicity | High deductions, investments |
Mr. Raj | Gross Salary: ₹15,00,000 | FY 2025-26
| Calculation Step | Amount |
|---|---|
| Gross Salary | ₹15,00,000 |
| Less: Standard Deduction | ₹75,000 |
| Net Taxable Income | ₹14,25,000 |
| Tax on ₹0–₹4L @ NIL | ₹0 |
| Tax on ₹4L–₹8L @ 5% | ₹20,000 |
| Tax on ₹8L–₹12L @ 10% | ₹40,000 |
| Tax on ₹12L–₹14.25L @ 15% | ₹33,750 |
| Total Tax Before Cess | ₹93,750 |
| Add: 4% Health & Education Cess | ₹3,750 |
| Total Tax Payable | ₹97,500 |
Ms. Priya | Gross Salary: ₹12,75,000 | FY 2025-26 | New Regime
| Step | Amount |
|---|---|
| Gross Salary | ₹12,75,000 |
| Less: Standard Deduction | ₹75,000 |
| Net Taxable Income | ₹12,00,000 |
| Tax on ₹12,00,000 (computed) | ₹60,000 |
| Less: Section 87A Rebate | ₹60,000 |
| Total Tax Payable | ₹0 (ZERO) |
5. Important Due Dates & Deadlines
Original Due Date — ITR-1 & ITR-2
Salaried individuals, pensioners, individuals with capital gains — not required to get accounts audited.
Extended Deadline — ITR-3 & ITR-4 (Non-Audit)
Non-audit businesses, professionals, and trusts. New deadline effective from AY 2026-27.
Tax Audit Report Due Date
Taxpayers required to get accounts audited (turnover exceeding ₹1 crore for business / ₹50L for profession) must file audit report by this date.
Audit Cases — ITR-5 & ITR-6
All taxpayers whose accounts require a tax audit — companies, large businesses, firms.
Transfer Pricing Audit Report
Taxpayers with international or specified domestic transactions must file TP audit report.
Transfer Pricing Cases — ITR Filing
Taxpayers required to furnish reports for international or specified domestic transactions.
Belated Return — Last Chance
Missed the original deadline? File a belated return under Section 139(4) with a late fee up to ₹5,000.
Revised Return — Extended Deadline (New!)
Made a mistake in an already-filed return? File a revised return under Section 139(5). Extended to 31st March 2027 from AY 2026-27 onwards.
Updated Return (ITR-U)
File an updated return under Section 139(8A) within 4 years from the end of AY 2026-27, with an additional tax of 25%/50%.
6. Key Deductions & Exemptions
| Section | Deduction | Maximum Limit | Available In |
|---|---|---|---|
| 80C | PPF, EPF, ELSS, NSC, LIC Premium, Tuition Fees, Home Loan Principal | ₹1,50,000 | Old Regime Only |
| 80CCC | Contribution to Pension Fund (LIC/other insurer) | ₹1,50,000 (combined with 80C) | Old Regime Only |
| 80CCD(1) | Employee's own contribution to NPS | 10% of salary (max ₹1.5L with 80C) | Old Regime Only |
| 80CCD(1B) | Additional NPS contribution (above 80C limit) | ₹50,000 | Old Regime Only |
| 80CCD(2) | Employer's contribution to NPS | 10% of Basic + DA (no overall cap) | ✅ Both Regimes |
| Section | Deduction | Limit |
|---|---|---|
| 80D | Medical Insurance Premium (Self + Family) | ₹25,000 (₹50,000 if senior citizen) |
| 80D | Medical Insurance Premium for Parents | ₹25,000 (₹50,000 if senior citizen parents) |
| 80D | Preventive Health Checkup | ₹5,000 (within above limits) |
| 80DD | Maintenance of disabled dependent | ₹75,000 / ₹1,25,000 (severe disability) |
| 80DDB | Treatment of specified diseases (self/dependent) | ₹40,000 (₹1,00,000 for senior citizens) |
| 80U | Person with disability | ₹75,000 / ₹1,25,000 (severe) |
House Rent Allowance (HRA) Exemption [Section 10(13A)] — Old Regime Only
HRA received from employer is exempt to the extent of the least of:
- Actual HRA received
- 50% of Basic Salary (for metro cities: Delhi, Mumbai, Kolkata, Chennai) OR 40% (other cities)
- Rent paid minus 10% of Basic Salary
Basic Salary: ₹50,000/month | HRA Received: ₹20,000/month | Rent Paid: ₹18,000/month | City: Chennai (Metro)
- Actual HRA: ₹20,000
- 50% of Basic: ₹25,000
- Rent – 10% of Basic: ₹18,000 – ₹5,000 = ₹13,000
- HRA Exempt: ₹13,000/month (lowest of three)
| Section | Deduction | Limit | Regime |
|---|---|---|---|
| 24(b) | Interest on Housing Loan (Self-occupied property) | ₹2,00,000/year | Old Regime |
| 80EE | First-time home buyer additional interest | ₹50,000 | Old Regime |
| 80EEA | Affordable housing loan interest | ₹1,50,000 | Old Regime |
| Section | Deduction | Limit |
|---|---|---|
| 80E | Interest on education loan (higher education) | Entire interest (8 years) |
| 80G | Donations to approved charitable institutions | 50%/100% of donation (with/without limit) |
| 80GG | Rent paid (no HRA received) | ₹5,000/month or 25% of total income |
| 80TTA | Interest on savings bank account | ₹10,000 |
| 80TTB | Interest income for senior citizens | ₹50,000 (replaces 80TTA for seniors) |
| 87A | Tax rebate (New Regime — up to ₹12L) | ₹60,000 |
| 87A | Tax rebate (Old Regime — up to ₹5L) | ₹12,500 |
7. Documents Required for ITR Filing
PAN Card, Aadhaar Card (linked to PAN), Bank Account Number & IFSC Code
TDS Certificate from employer (Form 16) and from banks/others (Form 16A, 16B, 16C)
Download Annual Information Statement and Form 26AS from the Income Tax portal
Statement of equity/mutual fund transactions, property sale deeds with stamp duty values
Rent receipts (for HRA), housing loan interest certificate, rental income details
Books of accounts, P&L statement, Balance Sheet (if applicable), GST returns
80C investments (PPF, ELSS, LIC), health insurance premium receipts (80D), donation receipts (80G)
Details of foreign bank accounts, investments, or assets (mandatory for residents)
8. Step-by-Step ITR Filing Process
Here is the complete step-by-step process to file your ITR online on the Income Tax e-Filing Portal (incometax.gov.in):
Gather All Documents
Collect Form 16, Form 26AS, AIS, bank statements, investment proofs, and capital gain statements before you begin.
Visit the e-Filing Portal
Go to incometax.gov.in. Login using your PAN as User ID and your password. If you're a new user, register first using your PAN and Aadhaar.
Select Assessment Year
Go to e-File → Income Tax Returns → File Income Tax Return. Select Assessment Year 2026-27 and filing mode as Online.
Choose the Correct ITR Form
Based on your income sources and taxpayer category, select the appropriate ITR form (ITR-1, ITR-2, ITR-3, or ITR-4). Refer to Section 3 above.
Choose Your Tax Regime
Select New Tax Regime (default) or Old Tax Regime. Compare your tax liability under both before choosing. Business taxpayers opting for the Old Regime must file Form 10-IEA.
Fill in Income Details
Enter details of income from all sources: Salary (pre-filled from Form 16), house property, capital gains, business/profession, and other sources. Verify with Form 26AS and AIS.
Claim Deductions (Old Regime)
If you chose the Old Regime, enter all eligible deductions under Chapter VIA (80C, 80D, 80G, etc.) and exemptions (HRA, LTA).
Verify Tax Computation & Pay Balance Tax
Review the auto-computed tax liability. If there is any balance tax due after TDS/advance tax, pay it as Self-Assessment Tax using Challan 280 before submitting the return.
Review & Submit
Carefully review all entries. Click Preview and Submit. After successful validation, submit the return.
e-Verify Your Return
Verify within 30 days of filing using Aadhaar OTP, Net Banking, Bank Account Validation, or Digital Signature (DSC). An unverified return is treated as invalid. Acknowledgement (ITR-V) is generated post-verification.
9. Penalties & Consequences of Late Filing
| Section | Nature | Rate / Amount | When Applicable |
|---|---|---|---|
| 234F | Late Filing Fee | ₹1,000 (income ≤₹5L) | ₹5,000 (income >₹5L) | If ITR is filed after due date but on or before 31st Dec 2026 |
| 234A | Interest on Unpaid Tax | 1% per month on unpaid tax from due date to filing date | If tax is unpaid and return is filed after due date |
| 234B | Interest on Advance Tax Default | 1% per month from April 1 if advance tax <90% of final liability | Auto-calculated on the e-filing portal |
| 234C | Interest on Deferred Advance Tax | 1% per quarter for short payments at each advance tax due date | If advance tax not paid on time during the year |
| — | Loss of Carry Forward Benefits | Business/capital losses (except HP losses) cannot be carried forward | If return is not filed by the original due date |
| 139(8A) | Updated Return Penalty | 25% of (tax + interest) if filed within 12 months | 50% if after 12 months | If filing via ITR-U (updated return) |
| 271F | Penalty for Non-Filing | Up to ₹5,000 (at AO's discretion) | If ITR is not filed at all despite being required to |
10. Frequently Asked Questions (FAQs)
The Financial Year (FY) is the year in which you earn your income — April 1 to March 31. The Assessment Year (AY) is the following year in which that income is assessed and taxed. For income earned in FY 2025-26 (April 2025 to March 2026), the ITR is filed in AY 2026-27. Note: From April 2026, the Income Tax Act 2025 introduces the term "Tax Year" to replace "Financial Year".
Yes, under the New Tax Regime, a Section 87A rebate of ₹60,000 ensures zero net tax liability for resident individuals with taxable income up to ₹12,00,000. However, this rebate is NOT applicable on special rate income like LTCG under Section 112A, STCG under Section 111A, etc. Also, NRIs cannot claim this rebate. For salaried individuals, adding the ₹75,000 standard deduction makes gross salary up to ₹12,75,000 effectively tax-free.
Yes. For salaried individuals and pensioners (non-business cases), you can switch between New and Old Tax Regime every year directly in the ITR at the time of filing, provided you file by the original due date. For taxpayers with business/professional income, you must file Form 10-IEA before the due date to opt out of the New Regime (Old Regime). Once you opt out, you can re-enter the New Regime only once in your lifetime as a business taxpayer.
If you miss the original deadline, you can still file a Belated Return under Section 139(4) by 31st December 2026 with a late fee of ₹1,000 (income ≤₹5L) or ₹5,000 (income >₹5L). Additionally, interest under Section 234A at 1% per month on unpaid tax will apply. Key downside: you CANNOT carry forward most losses (except house property losses) if you file a belated return.
Form 26AS is a consolidated Annual Tax Statement showing all TDS deducted on your income, TCS collected, advance tax paid, self-assessment tax paid, and tax refunds received. It is crucial to cross-verify your Form 16 and income details with Form 26AS and the Annual Information Statement (AIS) before filing to avoid discrepancies and notices from the Income Tax Department.
The ITR for AY 2026-27 (income of FY 2025-26) will be filed under the provisions of the Income-tax Act, 1961 (the old Act). The new Income Tax Act, 2025 comes into effect from 1st April 2026 and applies to Tax Year 2026-27 (FY 2026-27) onwards. All proceedings related to AY 2026-27 and earlier years will continue under the old Act.
You must e-verify your ITR within 30 days of filing. Options: (1) Aadhaar OTP — fastest method, (2) Net Banking, (3) Bank Account Validation, (4) Demat Account, (5) Digital Signature Certificate (DSC) — mandatory for companies. If you cannot e-verify, you can send a signed physical copy of ITR-V to CPC Bengaluru by ordinary/speed post within 30 days.
An Updated Return (ITR-U) under Section 139(8A) allows you to correct missed or under-reported income even after the revised return deadline. For AY 2026-27, you can file ITR-U up to 31st March 2031 (4 years from end of AY). However, it attracts an additional tax of 25% of (tax + interest) if filed within 12 months of the end of AY, and 50% if filed after 12 months. ITR-U cannot be filed to claim a refund or reduce tax liability.
For a salary of ₹12.5 lakh with standard deduction of ₹75,000, net taxable income is ₹11.75 lakh under the New Regime — resulting in ZERO tax (since taxable income is below ₹12L, the 87A rebate fully covers the tax). Under the Old Regime (assuming ₹2.5L in 80C, 80D, HRA, etc.), taxable income could be around ₹9L-₹10L, resulting in approximately ₹90,000-₹1,12,500 in tax after deductions. In this case, the New Regime wins hands down. Always compute both before deciding.
As of March 2026, ITR filing for AY 2026-27 has not yet started. The CBDT will notify the ITR forms for AY 2026-27 (under the Income-tax Act, 1961) and make them available on the e-filing portal well before the due dates. Typically, ITR filing opens in April/May. Keep checking incometax.gov.in for the latest updates.
11. Official Sources & Useful Links
For the most accurate and up-to-date information, always refer to the official government portals:
Need Help Filing Your ITR for AY 2026-27?
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