Filing Income Tax returns in India: A step-by-step guide

CHENNAI: While all the eligible residents of India are expected to file an Income Tax Return (ITR) every year, the process has now become largely digitized and pre-filled with data, which has made it more manageable for individuals with straightforward income sources like salary and interest.

Filing your return accurately and on time ensures smooth financial transactions with banks and the government apart from helping one avoid penalties and unnecessary scrutiny.

The below guide provides a step-by-step process for filing ITR online for the Financial Year 2025-26 (Assessment Year 2026-27).

1. Determine Your Eligibility and Gather Documents

Before you begin the process, check if you are required to file a return and collect the necessary documents.

Requirement to file:

You must file an ITR if your gross total income exceeds the basic exemption limit. For FY 2025-26, the limits are:

• Rs 4,00,000 under the New Tax Regime (which is now the default option)

• Rs 2,50,000 under the Old Tax Regime (Rs 3,00,000 for senior citizens aged 60-80 years and Rs 5,00,000 for super senior citizens aged 80 years and above)

Even if your income is below these limits, filing a "NIL" return can be beneficial for loan or visa applications.

Essential Documents Checklist:

• PAN and Aadhaar: Ensure your bank account is also linked to PAN

• Form 16: Issued by your employer, detailing salary and TDS

• Form 26AS & AIS (Annual Information Statement): These are essential documents showing tax deducted on your behalf and all financial transactions linked to your PAN

• Bank Account Details: For refund credit (account must be pre-validated on the portal)

• Investment Proofs: If claiming deductions under the Old Tax Regime (example, for PPF, ELSS, LIC, health insurance).

• Other Income Documents: Interest certificates, capital gains statements from brokers etc

2. Log in to the Income Tax Portal

• Visit the official e-filing portal: https://www.incometax.gov.in/

• Log in using your PAN as the User ID and your password. First-time users must register on the portal.

3. Select the Correct Assessment Year and ITR Form

• Navigate to e-File > Income Tax Returns > File Income Tax Return.

• Select Assessment Year (AY) 2026-27 for income earned in FY 2025-26.

Choosing the Right ITR Form:

Selecting the wrong form can lead to a defective return notice. For individuals, the common forms are:

Form Applicability

ITR-1 (Sahaj) - For resident individuals with total income up to Rs 50 lakhs from salary, pension, one house property and other sources like interest.

ITR-2 - For individuals and HUFs (Hindu Undivided Family) not having income from business or profession, but who have capital gains (including LTCG beyond Rs 1.25 lakhs), income from more than one house property, foreign assets or are not ordinarily resident .

ITR-3 - For individuals and HUFs having income from a business or profession (including as a partner in a firm).

ITR-4 (Sugam) - For resident individuals, HUFs and firms (other than Limited Liability Partnership) opting for the presumptive taxation scheme under sections 44AD, 44ADA or 44AE, with income up to Rs 50 lakhs. Permits LTCG under Section 112A up to Rs 1.25 lakhs.

(Note - As per the current tax regime, it now permits Long-Term Capital Gains (LTCG) under Section 112A up to Rs 1.25 lakhs from listed equity shares or equity-oriented mutual funds, provided there are no capital losses to be carried forward.)

4. Verify Pre-filled Data and Declare Income

The portal will automatically pre-fill your personal information, salary, TDS and interest details from your AIS and Form 26AS.

• Review: Check all pre-filled data and ensure the salary matches your Form 16 and that all TDS is accounted for.

• Check AIS and TIS: Download and review your Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) from the portal (Services > Annual Information Statement). Ensure all income shown in your AIS is either already reported or added to your return.

• Enter Missing Income: Declare any income not captured in the pre-filled form, such as additional interest, capital gains, or income from freelancing.

5. Choose Your Tax Regime and Claim Deductions

• Select a Tax Regime: The New Tax Regime is the default option with lower tax rates but no exemptions. Under this regime, the basic exemption limit is Rs 4 lakhs. Additionally, resident individuals with total income up to Rs 12 lakhs can claim a Section 87A rebate of up to Rs 60,000, which effectively cancels their tax liability . For salaried taxpayers, this effectively becomes Rs 12.75 lakhs with the Rs 75,000 standard deduction.

• Old Tax Regime: You can choose this if you have significant investments and want to claim deductions. This regime has higher tax rates but allows exemptions. The Section 87A rebate under the Old Tax Regime is available up to a maximum of Rs 12,500 for resident individuals with total income up to Rs 5 lakh .

• Enter Deductions (if applicable): If you choose the Old Tax Regime, enter your eligible deductions in the relevant schedules. Common deductions include:

• Section 80C (up to Rs 1.5 lakhs): PPF, ELSS, LIC, etc.

• Section 80D: Health insurance premiums.

• Section 24(b): Home loan interest (up to Rs 2 lakhs for self-occupied property).

• Standard Deduction: Under the Old Tax Regime, it is Rs 50,000. Under the New Tax Regime, it has been increased to Rs 75,000.

6. Tax Calculation and Payment

• The system will automatically compute your tax liability based on your income and the regime selected.

• If your total tax paid (via TDS) is less than your liability, pay the outstanding amount using the e-Pay Tax option using Challan 280 (Net Banking/UPI) before submitting your return.

• If TDS is higher than your liability, you will be eligible for a refund to your pre-validated bank account.

7. Preview, Submit and e-Verify

• Preview the entire return one final time to check for errors. Then click Submit.

• Crucial: E-Verify Your Return. Filing is not complete until your return is verified within 30 days with the most common method being Aadhaar OTP. Other options include Net Banking, Digital Signature Certificate (DSC) or EVC.

• After submission and e-verification, save the acknowledgement number for your records.

Deadlines for IT Filing

• Individuals (Salary, Capital Gains, etc) ITR-1, ITR-2 July 31, 2026

• Business/Profession (Non-Audit) ITR-3, ITR-4 August 31, 2026

• Businesses Requiring Tax Audit ITR-3, ITR-5, ITR-6 October 31, 2026

• Belated Return (Late Filing) Any December 31, 2026

• Revised Return (Correcting Errors) - March 31, 2027

• Updated Return (ITR-U) - March 31, 2031 (upto 4 years after AY end, subject to additional tax)