Tips for a Smooth ITR Filing

Tips for a Smooth ITR Filing

Filing your Income Tax Return for Assessment Year 2026-27 (income earned in Financial Year 2025-26) is genuinely easier than it has ever been — provided you do two hours of preparation before you log in to the e-filing portal. The Income Tax Department's Annual Information Statement (AIS), pre-filled forms and the matured unknown node portal have eliminated most of the manual data-entry burden. What remains — and what still causes 80 per cent of notices and refund delays — is reconciliation gaps, wrong form selection and missed verification. This guide walks you through every stage, from building your document folder to tracking your refund, with real numbers and real deadlines.

Step 1: Build Your Document Folder Before You Open the Portal

Print or download every document in the list below before you log in. Chasing a missing Form 16A mid-filing is how you end up with a rushed, inaccurate return.

Identity and banking

• PAN and Aadhaar (linked — if not linked, do it first; an unlinked PAN creates TDS consequences)
• Pre-validated bank account details: account number, IFSC, account type exactly as registered at the bank

Income documents

• Form 16 (Part A + Part B) from every employer in FY 2025-26 — if you changed jobs, you need both
• Form 16A for TDS on FD interest, rent received (Section 194-I), professional fees (Section 194J)
• Form 16B if you sold immovable property (buyer deducts TDS at 1% under Section 194-IA)
• Form 16C if you received rent > Rs. 50,000 per month from an individual tenant
• Bank statements and FD interest certificates for every account — including dormant ones
• Capital gains account statements from brokers, mutual fund houses, AMC registrars (CAMS/KFintech)
• Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) — downloaded separately from the portal

Deduction proofs

• 80C: PPF passbook, ELSS statements, ULIP premium receipts, children's tuition fee receipts, life insurance premium certificates
• 80D: health insurance premium receipts for self and parents
• 80E: education loan interest certificate
• 80G: donation receipts with 80G registration number of the donee institution
• Section 24(b): home loan interest certificate showing principal and interest split for the full year
• HRA: rent agreement, rent receipts, and landlord's PAN if monthly rent exceeds Rs. 8,333 (Rs. 1 lakh annual)

Keeping all of this in one named folder — digital or physical — means your return is as accurate as your documents, nothing more.

Step 2: Download AIS, TIS and Form 26AS — and Actually Reconcile Them

AIS (Annual Information Statement) is the most important document in your ITR kit. It aggregates data reported to the Income Tax Department by banks, employers, registrars, brokers, mutual funds and GST networks. Form 26AS shows TDS and advance tax credits. TIS (Taxpayer Information Summary) consolidates AIS into processed values the pre-fill engine uses.

How to download:

1. Log in at unknown node
2. Navigate to Services → Annual Information Statement (AIS)
3. Download AIS in PDF or JSON; download TIS separately
4. Download Form 26AS under e-File → Income Tax Returns → View Form 26AS or through TRACES

What to check in AIS:

• Interest income from every bank and NBFC — compare against your actual interest certificates
• Dividend income — compare against broker/demat statements
• Capital gains from mutual fund redemptions and share sales
• Property purchase and sale consideration
• GST turnover if you have a business

If you find a wrong entry: Use the Submit Feedback option inside AIS to mark it as "Information is not fully correct" or "Information relates to other PAN." The Department will consider your feedback; the AIS will show both the original and corrected value. Filing a return with a number that directly contradicts an uncorrected AIS entry is the fastest way to get a Section 143(1)(a) adjustment notice. Fix first, file second.

Cross-check TDS credits: Every TDS entry in Form 26AS must match the TDS reflected in AIS. If an employer has filed an incorrect TDS return, follow up with the employer's payroll team to have it corrected through a revised TDS return before you file your ITR.

Step 3: Select the Correct ITR Form for AY 2026-27

Choosing the wrong form is not a minor error — the return can be treated as defective and you will be issued a notice under Section 139(9) requiring you to refile.

The most common mismatch: salaried individuals who redeemed one mutual fund SIP during the year defaulting to ITR-1. Any capital gain — however small — disqualifies you from ITR-1 and pushes you to ITR-2.

Step 4: New Regime vs. Old Regime — Run the Numbers, Not Your Gut

The new tax regime is the default for AY 2026-27. If you do nothing, the system applies it. You must actively opt for the old regime before filing.

Key parameters of the new regime for AY 2026-27:

• Basic exemption: Rs. 3,00,000
• Section 87A rebate: Tax reduced to nil if total income ≤ Rs. 7,00,000
• Standard deduction: Rs. 75,000 for salaried employees and pensioners
• No deduction for 80C, 80D, HRA, LTA, home loan interest under Section 24(b)

Slabs under the new regime: | Income slab | Rate | |---|---| | Up to Rs. 3,00,000 | Nil | | Rs. 3,00,001 – Rs. 7,00,000 | 5% | | Rs. 7,00,001 – Rs. 10,00,000 | 10% | | Rs. 10,00,001 – Rs. 12,00,000 | 15% | | Rs. 12,00,001 – Rs. 15,00,000 | 20% | | Above Rs. 15,00,000 | 30% |

Worked Example: Rajesh, Senior Software Engineer, CTC Rs. 14,00,000

Rajesh lives in Pune, pays Rs. 18,000 rent per month, has a home loan (interest Rs. 2,00,000), EPF + ELSS of Rs. 1,50,000, and health insurance of Rs. 25,000.

New Regime:

• Gross salary: Rs. 14,00,000
• Less standard deduction: Rs. 75,000
• Taxable income: Rs. 13,25,000
• Tax: 0 + Rs. 20,000 (5% on 3–7L) + Rs. 30,000 (10% on 7–10L) + Rs. 30,000 (15% on 10–12L) + Rs. 25,000 (20% on 12–13.25L) = Rs. 1,05,000
• Add 4% health and education cess: Rs. 4,200
• Total tax payable: Rs. 1,09,200

Old Regime:

• Gross salary: Rs. 14,00,000
• Less standard deduction (Section 16): Rs. 50,000
• Less HRA exemption: Rs. 60,000 (estimated; lower of actual HRA, 40% of basic, or rent paid less 10% of basic)
• Less Section 80C: Rs. 1,50,000
• Less Section 80D: Rs. 25,000
• Less Section 24(b) home loan interest: Rs. 2,00,000
• Taxable income: Rs. 9,15,000
• Tax: 0 + Rs. 12,500 (5% on 2.5–5L) + Rs. 83,000 (20% on 5–9.15L) = Rs. 95,500
• Add 4% cess: Rs. 3,820
• Total tax payable: Rs. 99,320

Verdict: Rajesh saves Rs. 9,880 under the old regime, entirely because the home loan interest deduction of Rs. 2,00,000 under Section 24(b) is unavailable under the new regime. Had he no home loan, the new regime would have been cheaper by roughly Rs. 35,000. This is the typical tipping point: if your aggregate deductions under the old regime exceed approximately Rs. 3,50,000–4,00,000 (depending on income slab), the old regime wins. If not, the new regime wins.

Practical step: Use the Tax Calculator built into the e-filing portal's pre-fill section — it computes both regimes from your pre-filled data and shows the difference before you commit.

Step 5: File Without Errors — A Practical Sequence

Once documents are ready, AIS is reconciled and regime is decided, follow this sequence:

1. Log in → e-File → Income Tax Returns → File Income Tax Return
2. Select AY 2026-27 and Online mode
3. Choose filing status (Original / Revised / Belated)
4. Select the correct ITR form
5. Accept the pre-filled data — do not accept blindly; verify each pre-filled entry against your documents
6. Enter income not captured in pre-fill (e.g., interest from small co-operative banks, foreign income)
7. Enter deductions in the correct schedule (Schedule VI-A for 80C/80D/80G etc.)
8. Fill Schedule CG (capital gains) with the correct cost of acquisition, sale consideration, indexed cost where applicable
9. Cross-verify the tax liability shown with your Form 26AS TDS credits
10. If there is a balance tax payable, pay via Self-Assessment Tax (challan 280, code 300) before submission
11. Submit → proceed to e-verification

Common Mistakes That Trigger Notices

These errors appear repeatedly in practice. Check each one before you submit.

• Wrong assessment year: Selecting AY 2025-26 instead of AY 2026-27 is the single most common error. The system does not warn you forcefully.
• Missing employer TDS: If you changed jobs and only upload Form 16 from the new employer, the previous employer's salary and TDS disappear from your computation — but not from AIS and Form 26AS.
• Savings account interest ignored: Interest below Rs. 10,000 qualifies for Section 80TTA deduction, but you must still disclose the gross interest under "Income from Other Sources" — not disclose it and claim nothing.
• Small MF redemptions skipped: Every redemption — including SIP maturity amounts — must appear in Schedule CG. There is no minimum threshold for reporting capital gains (only for tax payability under Section 87A / LTCG exemption limits).
• HRA claimed without documentation: Landlord's PAN is mandatory if annual rent exceeds Rs. 1,00,000. Employers may accept declarations, but you bear responsibility for accuracy in your ITR.
• Foreign assets omitted: Even one overseas bank account, stock holding or foreign mutual fund unit requires Schedule FA disclosure. Non-disclosure is a violation under the Black Money Act — penalty starts at Rs. 10,00,000 per asset.
• Section 234F late fee not paid: Filing after July 31, 2026 attracts a mandatory fee of Rs. 5,000 (or Rs. 1,000 if income ≤ Rs. 5,00,000), payable as Self-Assessment Tax before or at the time of filing.

Special Situations That Add Complexity

Job Change During the Year

Collect Part A and Part B of Form 16 from both employers. Combine salaries in Schedule S. Add TDS from both in the TDS schedule. Watch for the aggregate salary crossing a slab boundary — the second employer may have applied a lower tax rate, leaving a shortfall you must pay as self-assessment tax before filing.

Sale of Immovable Property

The buyer deducts TDS at 1% of sale consideration under Section 194-IA and deposits it against your PAN. Verify this in Form 26AS and AIS. Compute capital gains correctly: for a property held over 24 months, apply the Cost Inflation Index (CII) to your purchase price. The CII for FY 2025-26 is as notified by the CBDT in the relevant notification — use the figure published on the CBDT website, not an estimated one. Long-term capital gains on property are taxable at 20% with indexation (or 12.5% without indexation for transactions after July 23, 2024, as per the Finance (No.2) Act 2024 — verify the applicable rate based on your transaction date).

Mutual Fund LTCG

Equity mutual fund units held over 12 months generate long-term capital gains taxable at 12.5% on gains exceeding Rs. 1,25,000 in an assessment year (aggregate across equity MF and listed equity shares). Gains up to Rs. 1,25,000 are exempt. Your AMC or registrar (CAMS / KFintech) provides a capital gains statement — download it and upload directly into the ITR's Schedule CG via the import utility.

Freelancers and Consultants Under Section 44ADA

If your gross professional receipts are ≤ Rs. 75,00,000 (from cash transactions up to 5% of gross), you may declare 50% as deemed profit under Section 44ADA and use ITR-4. No books need to be maintained. If your actual profit is higher than 50%, declare the actual figure. If lower, you must get books audited under Section 44AB and file ITR-3.

Verification: Do It Within 30 Days

A filed but unverified ITR is legally treated as if it was never filed. The deadline for e-verification is 30 days from the date of submission — missing it means the return is invalid and you may face late-filing consequences.

Fastest methods:

1. Aadhaar OTP — requires mobile number linked to Aadhaar; OTP arrives in seconds
2. Net banking EVC — available through major bank portals integrated with the e-filing site
3. Demat account EVC — through NSDL or CDSL login
4. DSC (Digital Signature Certificate) — mandatory for taxpayers with audit requirement; faster for companies and LLPs

If you cannot e-verify, sign the physical ITR-V (the acknowledgement) and courier it to: CPC, Post Box No. 1, Electronic City Post Office, Bengaluru – 560 100 It must reach CPC within 30 days of filing.

Refund Tracking: What Actually Speeds It Up

Refunds are processed by the Centralised Processing Centre (CPC) in Bengaluru after the Section 143(1) intimation is issued. Three things determine how quickly you receive yours:

1. Pre-validated and EVC-enabled bank account — go to Profile → My Bank Accounts, add the account, verify with OTP, and enable it for refund credit. If the account is not pre-validated, CPC cannot credit the refund electronically.
2. Name exactly as in PAN records — even one character mismatch between your bank account name and PAN name can cause a refund failure and necessitate a re-issue request.
3. No outstanding demand — CPC will set off any outstanding demand (from previous years) against your refund before releasing the balance. Check Pending Actions → Response to Outstanding Demand before filing.

To track refund status: e-File → Income Tax Returns → View Filed Returns → see status. Alternatively, use the NSDL refund status page with your PAN and AY. If a refund is marked "Failed," file a Refund Reissue Request under Services → Refund Reissue and reconfirm bank details.

After Filing: Keep a Clean Annual Record

Once ITR-V is generated and verification is done, save the following in one folder (cloud + local backup):

• ITR-V acknowledgement (PDF)
• Filed ITR in XML/JSON format (downloadable from the portal)
• Tax-paid challans (advance tax + self-assessment)
• Form 26AS and AIS for the year
• All supporting documents (Form 16, 16A, investment proofs)

Monitor the portal from August 2026 onwards for a Section 143(1) intimation — the CPC has 9 months from the end of the financial year of filing to process returns. An intimation may show either a refund determination, a nil balance or a demand. Respond to any demand within the 30-day window shown in the notice.

Planning for FY 2026-27 starts now: Note any carry-forward capital losses from AY 2026-27 (eligible for set-off in the next 8 assessment years). Update your advance-tax calendar — the first instalment for FY 2026-27 is due by June 15, 2026 (15% of estimated tax liability). Starting advance tax early avoids the 1%-per-month interest under Section 234B and 234C.

Key Takeaways

• Reconcile AIS before you start. Every mismatch you find and correct before filing is a notice you will never receive. Submit feedback for wrong AIS entries through the portal.
• Form selection is not optional fine print. A single capital gains transaction moves you from ITR-1 to ITR-2. Using the wrong form invalidates your return.
• Run a regime calculation with real numbers. If your aggregate Chapter VI-A deductions plus home loan interest exceed roughly Rs. 3,50,000, the old regime typically wins; otherwise the new regime does. The portal's built-in calculator does this in two minutes.
• The 30-day e-verification window is absolute. File it on the same day you submit, while the OTP is fresh. An unverified return is a non-return.
• Pre-validate your bank account before you need the refund. A name mismatch discovered after filing means weeks of delay and a re-issue request.
• Foreign assets have zero tolerance for omission. Even a dormant overseas bank account must appear in Schedule FA. The Black Money Act penalty is Rs. 10,00,000 per undisclosed asset.
• Start in June, not July. Filing in June means portal is less congested, e-verification succeeds first attempt, and refunds begin processing weeks earlier.