Filing ITR for FY 2025-26? Income Tax Department shares 10 mistakes to avoid and tips to follow
Story by Sneha Kulkarni
Filing ITR for FY 2025-26? Income Tax Department shares 10 mistakes to avoid and tips to follow
Before you begin filing your income tax return (ITR) for the Financial Year 2025-26 (Assessment Year 2026-27), you should gather the necessary documents, verify your income details and choose the correct tax regime and ITR form. The Income Tax (I-T) Department has advised taxpayers to file their returns well before the due date to avoid last-minute rush. Here are 10 things to keep in mind before filing your ITR, as advised by the Income Tax Department in a social media post on X (formerly Twitter).
- Choose the correct tax regime
After considering deductions and exemptions available to you, compare tax liability under both regimes and select the appropriate regime that can help you minimise your tax outgo.
- Select the right ITR form
Using the correct ITR form is very important. There are seven types of ITR forms in India. The correct form depends on your residency status, income sources and the total income amount. Note that filing your return using the wrong form may result in the return being treated as defective by the Income Tax Department.
- Check AIS and Form 26AS carefully
Before filing your income tax return, make sure to download and review your Annual Information Statement (AIS) and Form 26AS. Compare the details with your own records. If you notice any mismatch, reconcile it before filing your return.
- Keep all important documents ready
Keeping all your documents handy can make the income tax return filing process much smoother. Keep the following documents ready before you start:
- Form 16 issued by your employer
- Bank statements
- Interest certificates from banks and post offices
- Investment and deduction proofs, wherever applicable
- Details of other income, if any
- These documents will help you report your income accurately.
- Verify pre-filled information
The Income Tax Department provides several details in pre-filled ITR forms. However, do not assume that every detail is correct.
Verify your personal information, including your name, PAN, Aadhaar number, bank account details, email address as well as the mobile number.
Also ensure that your Aadhaar is linked with your PAN card.
- Claim deductions correctly
If you are eligible to claim deductions under the old tax regime or any other applicable provisions, ensure that you enter the correct amounts. Cross-check your investment and expenditure details before submitting the return.
Incorrect reporting of deductions may lead to an additional tax demand or a delay in processing your return.
- Do not provide incorrect information to claim a higher refund
Note that over deductions, under-reporting income or furnishing incorrect details merely to receive a larger tax refund is illegal. Any mismatch may attract scrutiny or notices from the Income Tax Department.
- File your ITR before the due date
It is always better to file returns before the due date. Filing early gives you enough time to correct mistakes, respond to any issues that may arise and avoid last-minute technical glitches.
- Avoid penalties and loss of benefits
Missing the due date may result in a late filing fee, interest on unpaid taxes and, in some cases, the loss of certain tax benefits.
- Complete e-verification after filing
Filing your ITR is not the final step. You must e-verify within the prescribed time limit; otherwise, it will not be treated as a valid return.
Source: The Economic Times.
ITR-7 filing begins: Income Tax Dept launches Excel utility for AY 2026-27; check who can use it
Story by Mohammad Haris
ITR Filing 2026: The income tax department has released the Excel Utility for ITR-7 for Assessment Year (AY) 2026-27, enabling eligible taxpayers to prepare and file their income tax returns offline through the income tax e-filing portal.
“Kind Attention Taxpayers! The Excel Utility for ITR-7 for Assessment Year 2026-27 is now available on the Income Tax e-Filing portal,” Income Tax India said in a post on X on Friday.
ITR-7 is applicable to entities such as charitable and religious trusts, political parties, scientific research associations, universities, educational institutions, hospitals, and other organisations required to file returns under specific provisions of the Income Tax Act.
Taxpayers can download the ITR-7 Excel Utility (Version 1.0) from the Income Tax e-Filing portal, fill in the required details offline, validate the data, generate the JSON file, and upload it on the portal to complete the return filing process.
The latest release follows the phased rollout of income tax return utilities for AY 2026-27, with the department gradually making offline filing tools available for different ITR forms.
What Is the Last Date To File ITR 2026?
Even as the income tax department has enabled ITR-1, ITR-2, ITR-3, ITR-4 and ITR-5 forms for the assessment year 2026-27 (financial year 2025-26), the due dates for the income tax return filing this year are July 31 for individual taxpayers, August 31 for non-audit business cases, and October 31 for business cases that require audit.
The deadline for businesses that require transfer pricing reports (international transactions or specified domestic transactions) is November 30, 2026.
Under which Act will the ITR for income earned during FY 2025-26 be filed?
The ITR for income earned during FY 2025-26 will be filed for the assessment year 2026 -27 under the provisions of the Income Tax Act, 1961. Even though the filing will typically occur after April 1, 2026 (i.e., after the new Income Tax Act, 2025, has come into force), the return relates to a tax year beginning before April 1, 2026, and is therefore governed entirely by the old Act, the income tax department has said.
ITR filing: Don't let one small mistake cost you your tax refund; check these points
©The Economic Times
Filing your Income Tax Return sounds simple, until a small slip turns into a notice, a delayed refund, or an unexpected tax bill. Here's exactly what to double-check before you hit submit this year.
With the ITR filing season underway, the Income Tax Department has shared a simple checklist to help taxpayers file their returns correctly. In a post on X, the department urged taxpayers to prepare well in advance and avoid waiting until the last minute.
"A smooth ITR filing experience begins with the right preparation. Follow these Golden Rules to file your Income Tax Return (ITR) for AY 2026-27 accurately and confidently. Filing your ITR well before the due date can help you avoid unnecessary delays and last-minute rush," the department said.
Income Tax Department's 7 golden rules for ITR filing
CHOOSE THE RIGHT TAX REGIME AND ITR FORM
The department advises taxpayers to first decide whether the old tax regime or the new tax regime is more suitable for them.
It also stresses the importance of selecting the correct ITR form. Filing the wrong return form can lead to complications and delays in processing.
MATCH YOUR INCOME DETAILS BEFORE FILING
Before submitting the return, taxpayers should download their Annual Information Statement (AIS) and Form 26AS from the Income Tax portal.
These documents help verify details such as TDS, TCS and taxes already paid. If there is any mismatch, taxpayers should contact their bank, employer or the concerned deductor and get the records corrected before filing the return.
KEEP ALL IMPORTANT DOCUMENTS READY
The department also advises taxpayers to keep all necessary financial documents handy before they start filing.
These include Form 16, bank statements, interest certificates and investment proofs. Reviewing these documents carefully helps ensure that no income or eligible deduction is missed.
CHECK PRE-FILLED INFORMATION CAREFULLY
Even if the return is pre-filled, taxpayers should not assume every detail is correct.
The department recommends verifying important information such as PAN, address and bank account details. Even a small error can lead to correction requests or delays in processing the return.
Taxpayers should also ensure that the mobile number and email ID mentioned in the return belong to them and are active. The department recommends using the mobile number linked with Aadhaar so that all official communications are received without any issues.
ENTER DEDUCTION DETAILS CORRECTLY
The Income Tax Department has reminded taxpayers to fill in deduction and exemption details accurately.
This includes providing the correct bank details, account numbers and claim amounts wherever required. The responsibility of entering the correct information rests with the taxpayer.
The department also cautioned taxpayers against believing unrealistic promises of higher tax refunds. Even if a tax professional prepares the return, taxpayers should review all the details themselves before submitting it.
DON'T WAIT UNTIL THE DEADLINE
The department has once again urged taxpayers to file their ITR well before the due date instead of waiting until the last few days.
Late filing may attract a late fee. It can also result in the loss of certain deductions and prevent taxpayers from carrying forward eligible losses.
DON'T FORGET TO E-VERIFY YOUR RETURN
Filing the return is only one part of the process. The department has reminded taxpayers to complete e-verification after submitting their ITR.
Those who choose physical verification must send the signed ITR-V to the Centralised Processing Centre (CPC) in Bengaluru by Speed Post within 30 days.
In other words, the Income Tax Department's message is simple, i.e., preparing in advance can help avoid unnecessary errors and delays. Choosing the right tax regime and ITR form, checking income details, verifying pre-filled information and completing e-verification are some of the key steps that can make the ITR filing process smoother for AY 2026-27.
ITR filing 2026: 10 situations where you cannot use ITR-1 and must choose another income tax return form
ITR Filing 2026: ITR-1 Is Not for Everyone—Know When ITR-2, ITR-3 or ITR-4 Becomes Mandatory
Filing an Income Tax Return (ITR) is more than just meeting the tax deadline—it also requires selecting the correct return form based on your income sources and financial transactions. While ITR-1 (Sahaj) is the most commonly used form by salaried employees and pensioners, it is not suitable for every taxpayer.
Tax professionals caution that choosing the wrong ITR form can result in your return being treated as defective by the Income Tax Department, leading to delays in processing or the need to submit a revised return. Therefore, before filing your tax return for the assessment year, it is important to understand whether you are eligible to use ITR-1 or if another form such as ITR-2, ITR-3, or ITR-4 is required.
Here are the key situations where taxpayers should avoid filing ITR-1.
- You Earned Short-Term Capital Gains From Shares or Equity Mutual Funds
If you sold listed shares or equity mutual funds during the financial year and earned Short-Term Capital Gains (STCG), ITR-1 cannot be used.
In most cases, taxpayers reporting such capital gains are required to file ITR-2. However, if your share transactions are treated as business income—such as frequent trading, intraday trading, or derivatives (F&O)—you may need to file ITR-3 instead.
- Long-Term Capital Gains Exceed ₹1.25 Lakh
Taxpayers who have earned Long-Term Capital Gains (LTCG) exceeding ₹1.25 lakh from listed equity shares or equity-oriented mutual funds under Section 112A are not eligible to use ITR-1.
Such capital gains must be reported using the appropriate return form, generally ITR-2.
- You Sold Property or Other Capital Assets
If you sold assets such as:
- Residential or commercial property
- Land
- Gold or jewellery
- Debt mutual funds
- Any other capital asset
the resulting capital gains cannot be disclosed through ITR-1. In these cases, taxpayers should choose a form that allows reporting of capital gains, such as ITR-2 or ITR-3, depending on their overall income profile.
- You Have Business or Professional Income
Individuals earning income from:
- Business operations
- Freelancing
- Consultancy services
- Professional practice
- Proprietorship businesses
cannot file ITR-1.
Generally, such taxpayers are required to file ITR-3. Those opting for the Presumptive Taxation Scheme under the Income Tax Act may instead be eligible to file ITR-4, depending on the nature of their business.
- You Trade in F&O or Intraday Stocks
Income generated through:
- Futures & Options (F&O)
- Intraday equity trading
- Other trading activities classified as business income
cannot be reported in ITR-1.
Since these activities are considered business income under tax laws, the appropriate return form is usually ITR-3.
- You Held Unlisted Equity Shares
If you owned unlisted equity shares at any point during the previous financial year, you are not eligible to use ITR-1.
The Income Tax Department requires additional disclosures for such investments, making ITR-2 or ITR-3 the applicable return forms.
- You Are a Director in a Company
Individuals serving as directors in any company must use return forms that capture director-related disclosures.
As a result, company directors cannot file ITR-1 and are generally required to submit either ITR-2 or ITR-3.
- You Own Foreign Assets or Have Authority Over Overseas Bank Accounts
ITR-1 is not applicable if you:
- Own property outside India
- Hold financial assets abroad
- Have signing authority over a foreign bank account
Foreign asset reporting requires additional schedules that are unavailable in ITR-1.
- You Receive Income From Outside India
If you receive any foreign income, including:
- Salary
- Dividend
- Interest
- Rental income
- Capital gains
ITR-1 cannot be used.
Such taxpayers must report foreign income and applicable disclosures through ITR-2 or ITR-3, depending on the nature of their earnings.
- Your Taxable Income Exceeds ₹50 Lakh or You Have Special Income
You are not eligible to file ITR-1 if:
- Your total taxable income exceeds ₹50 lakh
- You wish to carry forward previous years' losses
- You have income from lotteries, horse racing, or other specified categories
These situations require more detailed disclosures than those available in ITR-1.
What Happens If You Choose the Wrong ITR Form?
Selecting the wrong return form can create unnecessary complications during tax filing.
If the Income Tax Department finds that an incorrect form has been used, it may issue a Defective Return Notice. This can delay the processing of your return, postpone your refund (if applicable), and require you to submit a revised return using the correct form.
Tax experts recommend reviewing all sources of income—including salary, investments, capital gains, business income, and foreign assets—before deciding which ITR form to use.
Choose the Correct Return Form Before Filing
Although ITR-1 remains the simplest option for many salaried individuals and pensioners, it is designed only for taxpayers who meet specific eligibility conditions. The moment your income includes capital gains, business income, foreign assets, overseas earnings, or other complex financial transactions, you may need to switch to ITR-2, ITR-3, or ITR-4.
Choosing the correct form from the outset can help ensure faster processing, avoid notices from the Income Tax Department, and make your tax filing experience smoother.
ITR filing checklist: Keep these documents and details ready before filing income tax return
Filing an Income Tax Return (ITR) is more than just a yearly compliance exercise. So, before filing ITR, taxpayers should first ensure that core identity and banking details are updated and accurate. PAN and Aadhaar must be linked, bank accounts should be pre-validated for refunds, and taxpayers should keep the previous year’s ITR copy handy for reference.
“It is important to have access to e-verification methods such as Aadhaar OTP, net banking or digital signature certificate (DSC) to complete the filing process seamlessly,” said Preeti Gupta, Director at Deloitte.
Here is the checklist of financial documents and tax-related records that one must keep ready beforehand.
AIS, Form 26AS and Form 16 should be reviewed carefully
Apart from identity details, taxpayers should carefully review all tax-related documents before starting the filing process. “Taxpayers should review their Form 16, AIS, TIS and Form 26AS statements and other financial records while preparing the ITR form. These help in selection of the tax regime to be adopted during the year,” said Deepashree Shetty, Partner, Global Mobility Services, Tax & Regulatory Advisory at BDO India.
Choosing between the old and new tax regime
Choosing the correct tax regime is another important decision taxpayers should make before filing returns. The new tax regime, which is now the default system, offers lower tax slab rates but restricts most exemptions and deductions. On the other hand, the old tax regime allows taxpayers to claim benefits such as House Rent Allowance (HRA), Leave Travel Allowance (LTA), deductions under Section 80C, health insurance under Section 80D and home loan interest benefits. Tax experts suggest calculating tax liability under both systems before making a final choice.
Salary, pension and exemption-related documents to keep ready
Income-related documentation should also be organised based on the nature of earnings during the financial year. Salaried employees should keep salary slips, Form 16 and documents supporting exemptions such as rent receipts for HRA claims or travel bills for LTA claims. Pensioners should maintain pension statements and details of annuity income, if any.
Keeping these records ready helps taxpayers accurately report taxable and exempt portions of income while also avoiding errors during reconciliation.
House property and home loan documents
Taxpayers earning rental income should maintain rent agreements, municipal tax receipts and home loan interest certificates. In the case of home loans, the interest and principal repayment components are important not only for deduction claims but also for correctly reporting house property income.
Those claiming HRA should also ensure rent receipts and landlord details are properly maintained, particularly in cases where higher exemption claims are being made.
Capital gains reporting needs detailed records
Investors reporting capital gains must maintain detailed records of share transactions, mutual fund statements and property sale or purchase documents. Proper documentation becomes particularly important after the revised capital gains taxation rules and holding period changes introduced in recent years.
Business and professional income records are equally important
For freelancers, consultants and business owners, maintaining accurate books of accounts, invoices, expense records, GST returns and audit reports, where applicable, is critical. Mismatches between GST filings and ITR disclosures can invite departmental queries.
Professionals opting for presumptive taxation schemes should also verify turnover declarations and eligible deductions before filing returns.
Don’t ignore interest, dividend and other small income sources
Taxpayers should also collect supporting documents for income earned from other sources, such as savings account interest, fixed deposit interest, dividends, commission income or royalty receipts.
Why foreign assets and overseas income must be disclosed
Foreign income and overseas assets require special attention while filing returns. Even if there is no capital gain or active income generated from a foreign bank account, foreign stocks or overseas investments, Indian residents may still need to disclose these holdings in their ITR schedules.
Non-disclosure of foreign assets can attract penalties under the Black Money Act and may also trigger scrutiny from tax authorities. Tax experts advise resident taxpayers to maintain complete details of overseas bank accounts, foreign equity holdings, ESOPs, crypto assets held abroad and foreign income disclosures, wherever applicable.
An income tax refund is issued when the tax paid by a taxpayer during a financial year exceeds the actual tax liability. Excess tax may have been paid through Tax Deducted at Source (TDS), Tax Collected at Source (TCS), or advance tax. Taxpayers can claim the excess amount by filing their Income Tax Return (ITR). After filing the return, the refund status can be tracked online through the income tax e-filing portal and other available channels.
“Taxpayers should carefully review all available exemptions and deductions applicable to them, compare the benefits under both tax regimes, and verify that information reported in tax documents aligns with official records. Even small discrepancies can delay refunds or lead to avoidable notices," said Chandni Anandan, Tax Expert at ClearTax.
A well-prepared return that is complete, accurate, and promptly verified not only improves the likelihood of receiving the correct refund but also makes the filing experience significantly smoother,” added Anandan.
Strategies to maximise tax refund
To maximise an income tax refund, taxpayers should first compare their tax liability under both the old and new tax regimes before filing the return. Selecting the regime that results in the lower tax outgo can significantly increase the refund amount where excess TDS has already been deducted during the year.
Under the old tax regime, taxpayers can reduce taxable income through various deductions. Investments in instruments such as PPF, ELSS, EPF, NSC, life insurance premiums and 5-year tax-saving fixed deposits qualify for deductions of up to Rs 1.5 lakh under Section 80C. Additional tax savings can be claimed through health insurance premiums under Section 80D, where deductions range from Rs 25,000 to Rs 50,000 depending on the age of the insured and family members covered.
Salaried individuals can further reduce their tax liability by claiming House Rent Allowance (HRA) exemption, subject to prescribed conditions, and deduction of up to Rs 2 lakh on interest paid for a self-occupied home loan under Section 24(b). Those contributing to the National Pension System (NPS) can claim an additional deduction of up to Rs 50,000 under Section 80CCD(1B), over and above the Section 80C limit.
Employer contributions to NPS can also provide tax benefits under Section 80CCD(2). This deduction is available under both tax regimes and can be claimed on employer contributions of up to 10 percent of salary under the old regime and up to 14 percent under the new regime, depending on the employer category.
Salaried taxpayers are also entitled to the standard deduction, which is automatically available while computing taxable income. The deduction is Rs 50,000 under the old regime and Rs 75,000 under the new regime. Eligible taxpayers can also benefit from the rebate under Section 87A, which can reduce tax liability to nil if taxable income remains within the prescribed threshold.
Family pension recipients can claim a deduction under Section 57(iia). The deduction available is up to Rs 15,000 under the old regime and up to Rs 25,000 under the new regime, helping reduce taxable income and improve refund eligibility.
How to claim an income tax refund
Filing an Income Tax Return (ITR) is mandatory to claim a refund, even if a taxpayer is not otherwise required to file a return. Once income details and taxes already paid through TDS, TCS, or advance tax are reported, the tax filing utility automatically computes the actual tax liability and any refund due. If the taxes paid exceed the final tax liability, the excess amount is processed as a refund.
Select the correct ITR form: Choose the appropriate ITR form based on factors such as income sources, residential status, and taxpayer category. Filing under an incorrect form can lead to reporting errors, compliance issues, delays in return processing, and slower refund issuance.
Calculate and report income accurately: Ensure that all sources of income, eligible deductions, and exemptions are disclosed correctly to arrive at the right tax liability.
Verify TDS details: Cross-check the TDS information pre-filled in the return with Form 16, Form 16A, or other relevant records to ensure there are no discrepancies.
Provide correct bank account details: Enter accurate and active bank account information, as refunds are credited directly to the bank account linked with the return. Incorrect details may result in delays or failed refund transfers.
Complete e-verification promptly: After filing the return, e-verify it at the earliest. A return is processed only after verification, and timely e-verification helps speed up both return processing and refund issuance.
Source: money Control, LiveMint, Economic Times