How to file an ITR

How to File an ITR: Complete Step-by-Step Guide for AY 2026-27 and AY 2027-28

Filing your income-tax return for AY 2026-27 (FY 2025-26) means completing seven sequential actions: gather documents, pick the right ITR form, reconcile your Annual Information Statement (AIS), choose your tax regime, fill the pre-filled return, pay any outstanding self-assessment tax, and e-verify before closing the tab. The e-filing portal at incometax.gov.in now pulls most data automatically from Form 26AS and AIS — but automation amplifies errors you do not catch first. The non-audit individual due date is 31 July 2026 for AY 2026-27. File late and Section 234F costs you Rs. 5,000 or more.

Who Must File — and the Real Cost of Missing the Deadline

Every individual whose gross total income exceeds the basic exemption limit must file an ITR, whether or not any tax is actually payable after deductions and credits. For AY 2026-27, the basic exemption under the new tax regime is Rs. 3,00,000; under the old regime, it remains Rs. 2,50,000.

Filing is also mandatory — regardless of income level — if any of the following apply to you:

• You hold a foreign asset or have signing authority over a foreign bank account.
• You deposited more than Rs. 1 crore in aggregate in current accounts during FY 2025-26.
• You spent more than Rs. 2 lakh on foreign travel for yourself or anyone else.
• TDS or TCS has been deducted and you want a refund.
• Your electricity consumption crossed Rs. 1 lakh for the year.

The Section 234F penalty in plain numbers: Miss 31 July 2026 and file a belated return by 31 December 2026 — you owe Rs. 5,000 (or Rs. 1,000 if total income does not exceed Rs. 5 lakh). File after 31 December and the late fee doubles to Rs. 10,000. Beyond the fee, a belated return prevents you from carrying forward business losses, capital losses, and speculative losses to future years — a restriction that catches equity traders and small business owners completely off guard. A revised return under Section 139(5) is available until 31 December 2026 for AY 2026-27 if you spot a post-filing error.

Documents to Assemble Before You Log In

Opening the portal without documents invites mid-session exits and errors you discover only after submitting. Gather every item on this list before you type a single field.

Identity and bank:

• PAN and Aadhaar (Aadhaar must be linked to PAN; your Aadhaar-linked mobile must be active for OTP)
• Bank account numbers with IFSC codes for refund pre-validation

Employer documents:

• Form 16 Part A (TDS certificate from employer) and Part B (salary breakup, exempt allowances, deductions)
• Salary slips for April 2025 to March 2026 if Form 16 has not yet been issued by your employer

Investment and income proofs:

• Form 16A for TDS deducted on FD interest, rental income, commission, and professional fees
• Bank passbook or FD certificate for interest not captured in any Form 16A
• Capital-gains account statements from your broker (for equity, F&O) and AMC/RTA consolidated account statements for mutual funds
• Home loan interest certificate and principal repayment statement from the lender
• Rent receipts and HRA calculation worksheet (relevant only under the old regime)
• 80C documents: LIC premium receipts, ELSS redemption/purchase statements, PPF passbook, school tuition fee receipts
• 80D: Health insurance premium receipts for self, family, and parents
• 80G: Donation receipts with the donee's PAN and 80G registration number

For business or professional income:

• Profit and loss account, balance sheet, and ledger extracts
• GST return data (GSTR-1, GSTR-3B) for turnover reconciliation
• Any outstanding receivables treated as income under the accrual method

How to Choose the Right ITR Form

Selecting the wrong form makes your return defective under Section 139(9), which triggers a notice giving you 15 days to refile. The four forms applicable to individuals and HUFs are:

Three form-selection errors that appear every filing season

1. Filing ITR-1 when you have equity LTCG. Even Rs. 300 in long-term capital gains from listed equity requires ITR-2. ITR-1 has no Schedule CG. The portal accepts the submission but the CPC marks it defective.

2. Filing ITR-4 after crossing the presumptive income limit. If your business turnover exceeds Rs. 3 crore (or professional receipts exceed Rs. 75 lakh), you must switch to ITR-3 with audited accounts. Opting back into 44AD after exiting is not permitted for five consecutive years.

3. Using ITR-2 when you have any active business income. A single invoice treated as "business income" — as opposed to salary or professional fees under 44ADA — pushes you into ITR-3. Filing ITR-2 in this scenario is a defect.

Rule of thumb: When in doubt, file the higher-tier form. An ITR-2 filed by someone eligible for ITR-1 is not defective. The reverse is.

Reconciling Form 26AS, AIS, and TIS: The Step You Cannot Skip

The Income Tax Department cross-matches your filed return against three data sets. A mismatch in any one triggers a Section 143(1)(a) adjustment notice — often months after you filed and forgot.

• Form 26AS: TDS by employer, TDS by banks, TCS, self-assessment tax, and advance tax paid.
• AIS (Annual Information Statement): Everything in Form 26AS plus securities transactions, mutual fund redemptions, dividends, interest across all banks, rental receipts, GST turnover, foreign remittances, and large cash deposits.
• TIS (Taxpayer Information Summary): A processed, category-wise aggregate of AIS. Start here; drill into AIS for the source transaction.

Step-by-step reconciliation sequence

1. Log in to incometax.gov.in → Services → AIS.
2. Download the AIS PDF. The password is your PAN in uppercase followed by your date of birth in DDMMYYYY format (e.g., ABCDE1234F01011980).
3. Open the TIS tab. For each income category — salary, interest, dividends, MF proceeds, securities transactions — note the "processed value". This is the figure the system currently credits to you.
4. Compare each TIS processed value against your own records line by line.
5. Where a discrepancy exists, open AIS, find the specific transaction, and click Feedback. Choose the applicable option: Information is correct, Information is not fully correct, Information relates to another PAN, Duplicate, or Information is denied.
6. Wait until the AIS feedback is processed and the TIS processed value updates before you file.

Do not file with known AIS mismatches. If you do, the processed AIS value will differ from your declared income, and a mismatch notice is practically guaranteed.

One more check: Download Form 26AS from TRACES (traces.gov.in) and match every TDS row to the corresponding Form 16 or Form 16A entry. If a TDS credit is missing from Form 26AS — for example, a bank deducted TDS but the bank's TDS return was not filed — you cannot claim that credit in your ITR. Chase the deductor to file a correction before your ITR due date.

Old Regime vs. New Regime: Running the Numbers for AY 2026-27

The new tax regime is the default for AY 2026-27. You are taxed under it unless you actively opt for the old regime. Salaried employees with no business income can switch freely every year in the ITR itself. Taxpayers with business or professional income must file Form 10-IEA on the e-filing portal before 31 July 2026 to opt for the old regime — missing this deadline locks them into the new regime for the year.

New tax regime slabs for AY 2026-27 (Finance Act 2025)

Section 87A rebate (new regime): Rs. 60,000 for total income up to Rs. 12,00,000, making effective tax nil. The standard deduction for salaried employees is Rs. 75,000 under the new regime. Combined, a salaried employee with gross salary up to Rs. 12,75,000 pays zero income tax under the new regime for AY 2026-27.

Old regime slabs remain unchanged: Nil up to Rs. 2,50,000; 5% from Rs. 2,50,001 to Rs. 5 lakh; 20% from Rs. 5 lakh to Rs. 10 lakh; 30% above Rs. 10 lakh. The standard deduction is Rs. 50,000. Deductions under Section 80C (up to Rs. 1,50,000), 80D, HRA, and Section 24(b) home loan interest (up to Rs. 2,00,000) are available only under the old regime.

Quick breakeven guide: For a salaried taxpayer at Rs. 12,75,000 gross, the new regime gives zero tax. To match or beat that under the old regime, you need total deductions exceeding approximately Rs. 4,50,000 — feasible for someone with an active home loan, parents' health insurance under 80D, and a maxed-out 80C. Without a home loan, the new regime almost certainly wins. Run both calculations in the ITR portal's Tax Calculator (under Tools) before locking your regime choice.

For AY 2027-28 (FY 2026-27), the slabs applicable are as notified under Finance Act 2026.

Filling Your ITR on the e-Filing Portal: Step by Step

1. Go to incometax.gov.in and log in with your PAN, password, and second-factor authentication (Aadhaar OTP or net banking).
2. Navigate to e-File → Income Tax Returns → File Income Tax Return.
3. Select Assessment Year 2026-27, mode Online, and the applicable ITR form.
4. Choose "Continue with pre-filled data." The portal pulls in employer data, TDS credits, bank interest from AIS, and personal details automatically.
5. Personal Information tab: Confirm PAN, Aadhaar, residential status, and refund bank account. If no bank account shows as pre-validated, go to My Profile → Bank Accounts and validate one before proceeding.
6. Work through each income schedule — Salary, House Property, Capital Gains, Other Sources. Verify every pre-filled figure against your Form 16 and personal records. Manually add any income not captured: freelance receipts, rental income, interest from NBFCs, or foreign income.
7. Deductions schedule (old regime only): Enter 80C (specify each investment type — LIC, PPF, ELSS, tuition fees), 80D, 80G, 80TTA, HRA exempt amount, and Section 24(b) home loan interest. Each entry requires proof; entering without proof is an audit risk.
8. On the Tax Computation summary, verify the calculated tax, total TDS credit, advance tax, and balance payable or refundable. Cross-check against your own computation before accepting.
9. Confirm all self-assessment tax challans in the Taxes Paid schedule: BSR code, serial number, amount, date.
10. Click Preview Return and scan every schedule. Only click Proceed to Validation once every tab shows a green tick.

Calculating and Paying Self-Assessment Tax via Challan ITNS 280

Self-assessment tax (minor head code 300) is what remains after subtracting your TDS credits, TCS collected, and advance tax paid from your total tax liability. You must pay this before submitting the ITR.

Compute before you pay:

• Total tax liability (from ITR computation)
• Less: TDS + TCS + advance tax paid
• Add: Interest under Section 234B at 1% per month (or part of a month) on the shortfall in advance tax, calculated from 1 April to the filing date
• Add: Interest under Section 234C for any quarter where advance tax paid fell short of the prescribed percentage (15% by June 15, 45% by September 15, 75% by December 15, 100% by March 15)
• = Net amount to remit via ITNS 280

How to pay — integrated e-Pay Tax

1. In the ITR, if a balance shows on the computation page, click Pay Now to use the portal's integrated e-Pay Tax facility.
2. Alternatively: e-File → e-Pay Tax → New Payment → Income Tax → Minor head 300 — Self Assessment Tax → Assessment Year 2026-27. Double-check the AY before confirming.
3. Pay via net banking, UPI, or debit card. Download the challan receipt immediately. Record the BSR code (7 digits), challan serial number (5 digits), and payment date.
4. Return to the ITR → Taxes Paid schedule → enter BSR code, serial number, date, and amount.
5. Wait 7–10 minutes, then refresh your Form 26AS to confirm the payment appears as a credit. Submit only after the credit is visible.

Worked numbers: If your total tax is Rs. 76,960, employer TDS is Rs. 40,000, and bank TDS is Rs. 6,000, your self-assessment tax before interest is Rs. 30,960. If you file on 25 July 2026 (roughly 3 months after year-end), Section 234B interest is approximately Rs. 929 (1% × 3 months × Rs. 30,960). You pay Rs. 31,889 via ITNS 280 under code 300, AY 2026-27.

Submitting and E-Verifying: Why You Must Do It the Same Day

Submission and verification are two separate legal acts. A submitted-but-unverified return is treated as not filed under the Income Tax Act. You have 30 days from submission to verify. Miss that window and you must file afresh — which may now be after 31 July 2026, attracting the Section 234F penalty even though you submitted on time.

Available verification methods (choose one):

• Aadhaar OTP — the fastest option; OTP arrives on your Aadhaar-linked mobile in seconds.
• Net banking EVC — log in through your bank's net banking and generate an Electronic Verification Code.
• Bank account EVC — request EVC via your pre-validated bank account on the portal.
• Demat account EVC — through your depository-linked broker account.
• DSC (Digital Signature Certificate) — mandatory for companies and LLPs; optional but valid for individuals.
• Physical ITR-V — print, sign in blue ink, and speed-post (ordinary post is not accepted) to CPC Bengaluru within 30 days. Use only if every electronic method fails — physical verification delays refund processing by weeks.

Start the refund clock immediately: Refund processing begins from the verification date, not the submission date. E-verifying via Aadhaar OTP the same day you submit typically results in refund credit within 7–15 working days for straightforward salaried returns. Save the downloaded ITR-V acknowledgement (available under e-File → Income Tax Returns → View Filed Returns) as your proof of filing.

Worked Example: Priya's Complete AY 2026-27 Filing

Priya's profile:

• Gross salary from one employer: Rs. 12,75,000
• Bank FD interest (TDS already deducted @ 10%): Rs. 60,000 (TDS paid: Rs. 6,000)
• Listed equity mutual fund — LTCG on redemption: Rs. 1,65,000 (Rs. 1.25 lakh exempt → net taxable: Rs. 40,000)
• Investments: Rs. 1,50,000 (80C); home loan interest Rs. 2,00,000; health insurance Rs. 50,000 (80D)
• TDS deducted by employer: Rs. 40,000

Form selection: Priya has LTCG → ITR-1 is ineligible → she files ITR-2.

Regime comparison:

New regime:

• Taxable salary after Rs. 75,000 standard deduction: Rs. 12,00,000
• FD interest: Rs. 60,000 → Ordinary income: Rs. 12,60,000
• Tax on Rs. 12,60,000: (0–4L = 0) + (4–8L = Rs. 20,000) + (8–12L = Rs. 40,000) + (12–12.6L @ 15% = Rs. 9,000) = Rs. 69,000
• LTCG tax: 12.5% × Rs. 40,000 = Rs. 5,000
• Health and education cess (4% on Rs. 74,000) = Rs. 2,960
• Total new regime tax: Rs. 76,960

Old regime:

• Taxable salary after Rs. 50,000 standard deduction: Rs. 12,25,000
• FD interest: Rs. 60,000 → Gross total: Rs. 12,85,000
• Deductions (80C + 80D + Section 24b): Rs. 4,00,000
• Ordinary taxable income: Rs. 8,85,000
• Tax: (0–2.5L = 0) + (2.5–5L @ 5% = Rs. 12,500) + (5–8.85L @ 20% = Rs. 77,000) = Rs. 89,500
• LTCG tax: Rs. 5,000
• Cess (4% on Rs. 94,500) = Rs. 3,780
• Total old regime tax: Rs. 98,280

→ New regime saves Priya Rs. 21,320 this year, even with Rs. 4 lakh in legitimate deductions available. She selects new regime in the ITR.

Self-assessment tax:

• Total TDS credited: Rs. 40,000 (employer) + Rs. 6,000 (bank) = Rs. 46,000
• Tax payable: Rs. 76,960 − Rs. 46,000 = Rs. 30,960
• She pays Rs. 30,960 + applicable 234B interest via ITNS 280 (code 300, AY 2026-27) before submitting.
• She e-verifies via Aadhaar OTP immediately on submission.

Common Mistakes That Trigger Notices — and How to Fix Them

Reporting gross FD interest net of TDS only. TDS at 10% does not settle your liability if you are in the 20% or 30% slab. Always declare the gross interest in Schedule OS; the TDS credit appears separately in Form 26AS and is automatically offset.

Skipping small dividend income. Brokers and companies report every dividend payment — including Rs. 50 quarterly dividends — directly to the income-tax department. AIS will show them. Miss even one entry and you receive a Section 143(1)(a) mismatch notice.

Treating debt mutual fund gains as LTCG. Since April 2023, all gains from debt-oriented mutual funds are taxed at applicable slab rates regardless of holding period. These must go in Schedule CG under "other than equity." Your MF consolidated account statement categorises this correctly — use it.

Filing AIS feedback after submitting the ITR. AIS feedback updates TIS processed values. Filing first and correcting AIS later means your ITR and the processed AIS will show different numbers, generating a notice. Complete the feedback loop before you file.

Wrong assessment year on ITNS 280. Paying self-assessment tax for AY 2025-26 when you mean AY 2026-27 is one of the most frequent challan errors. There is no simple reversal — you must apply for a refund of the wrong-year payment and pay the correct one fresh. Verify the AY field on every challan before clicking Pay.

Not e-verifying within 30 days. A submitted-but-unverified ITR is not a filed ITR. If the 30-day window lapses, you must resubmit — and if you resubmit after 31 July, the Section 234F penalty applies from 31 July, not from the resubmission date.

How to fix post-filing errors: File a revised return under Section 139(5) at any time up to 31 December 2026 (for AY 2026-27). The revised return completely replaces the original. You can revise multiple times within the window — each revision supersedes the previous one.

Key Takeaways

• File by 31 July 2026 for AY 2026-27 to avoid the Section 234F penalty; belated returns after 31 December 2026 cost Rs. 10,000 and forfeit your right to carry forward losses.
• Reconcile AIS/TIS before opening the ITR. Submit feedback for every mismatch and wait for TIS processed values to align with your records before you proceed.
• The new regime default for AY 2026-27 gives zero tax on gross salary up to Rs. 12,75,000 — Rs. 75,000 standard deduction plus Rs. 60,000 Section 87A rebate on Rs. 12 lakh taxable income.
• ITR-1 is disqualified the moment you have any capital gains, even small ones. Use ITR-2 and Schedule CG.
• Pay self-assessment tax under minor head code 300 (ITNS 280), record BSR code and serial number, confirm credit in Form 26AS, and then submit.
• E-verify on the same day you submit — Aadhaar OTP takes under a minute and starts the refund clock immediately.
• Revised returns under Section 139(5) are available until 31 December 2026 — use them freely if you discover an omission or error after filing.