Income Tax Return (ITR)

1. Individuals whose income falls within the applicable tax slabs.

1. Companies and firms, regardless of whether they have made a profit or incurred a loss during the financial year.

1. If a loss under any head of income needs to be carried forward

1. When applying for a loan or visa

1. If a resident Indian holds any asset or financial interest outside India or is a signing authority in a foreign account.

1. If an NRI earns income from sources in India.

If income is received from the property held under a trust for charitable or religious purposes, or by entities, such as:

1. Political parties

1. Research associations

1. News agencies

1. Educational or medical institutions

1. Trade unions

1. Not-for-profit universities

1. Hospitals

1. Infrastructure debt funds, or

1. Other specified authorities or trusts

Importance of Filing Income Tax Return (ITR)

Filing your income tax returns in the specified format offers the following benefits:

1. Your Capital Losses and Gains will get an Adjustment

If equity or share market investment has been your topmost investing agenda, then timely filing of income tax return will prove to be extremely rewarding for you.

1. Easy to Claim Tax Refunds

Once deduction of a certain kind of tax takes place, one can only claim a tax refund if one is filing an income tax return, for that particular fiscal year.

1. Easy to Apply for Loans

Apart from being just another important financial document, your income tax return also acts as proof for your income as it indicates all the earnings that you have made in a single year.

1. Easy to Claim Tax Deductions

If you are earning more than Rs.3 lakh, and are also seeking for multiple exemptions in order to being your income down to that level, you will undoubtedly be required to file your ITR for that particular fiscal year.

1. Owning Assets (foreign assets) will be much easier

How to File ITR?

The process of filing Income Tax Returns (ITR) can be accomplished through both online  and offline methods:

Online Process

Visit the official e-filing portal of the income tax department which has recently updated the online portal for e-filing of income tax returns and can be filed.

1. Visit the official Income Tax Portal.

1. Log into the portal using your PAN as the user ID and your encrypted password.

1. From the home page, navigate to e-File option.

1. Click on ‘Income Tax Returns’ and then to ‘File Income Tax Return’.

1. Select the correct Assessment Year, such as, for FY 2025–26, choose AY 2026–27.

1. Choose your filing status (Individual, HUF, or others). Salaried and freelance taxpayers should generally select Individual.

1. Based on your income and sources, select the appropriate ITR form.

1. Specify the reason for filing the ITR, such as income exceeding the exemption limit or meeting specified conditions.

1. Enter the required details, such as personal details, bank account information, deductions, income details, and taxes paid.

1. After successfully filing, complete the process by e-verifying your return.

Offline Process

To file your ITR offline, visit the official income tax e-filing portal and navigate to the IT Return Preparation Software section to download the appropriate ITR form. Then Open the downloaded form on your computer and fill in the required details.

Ensure you have essential documents like Form 16, Form 26AS, and TDS certificates ready for reference. After completing the form, generate a JSON file and save it. Finally, upload the JSON file on the portal to submit your ITR.

Documents Required to File ITR

Depending on the tax bracket the individual falls under, the list of documents that are needed will differ. Some of the common list of documents that are needed to file ITR are mentioned below:

1. Pan card
2. Form 26AS
3. Form 16
4. Salary Pay slips
5. Bank statements
6. Interest certificates
7. TDS certificate
8. Proof of tax saving investments

Types of ITR Forms

Depending on the type of income that is generated by the taxpayer, the form that must be submitted will be different. The different types of ITR forms that are available are mentioned below:

1. ITR-1 or Sahaj

The ITR-1 or Sahaj form must be used by individuals who make an annual income of less than Rs.50 lakh via pension or salary and from only one house property.

1. ITR-2

The ITR-2 form must be used by shareholders of private companies, Directors of Companies, Non-Resident Indians (NRIs), or individuals who make an income via capital gains, from two or more house properties, and from foreign sources. However, the income of the individual must be more than Rs.50 lakh.

1. ITR-3

The ITR-3 form is specifically designed for individuals and Hindu Undivided Families (HUFs) who earn income from a proprietorship business or profession.

ITR-4 or Sugam

Individuals who are under the presumptive taxation scheme must use ITR-4 form. In order for individuals to join the scheme, they must earn less than Rs.50 lakh from professional income or less than Rs.2 crore from business income.

1. ITR-5

In order for association and body of individuals, Limited Liability Partnerships (LLPs), and partnership firms to report their income and tax computation, ITR-5 Form must be used.

1. ITR-6

The ITR-6 form is specifically designed for companies registered under the Indian Companies Act. All such companies, except those claiming exemption under Section 11 (applicable to charitable or religious organizations), must use this form to file their income tax returns.

1. ITR-7

In case entities are claiming an exemption as universities or colleges, scientific research institutions, political parties, and religious or charitable trusts, ITR-7 form must be used.

Note: Depending on the type of income that is generated by the taxpayer, the form that must be submitted will be different. Read out more about which ITR Form to File in 2025.

Types of Forms for ITR E-filing

It is important to understand the key forms used in the e-filing process and the information they contain before filing your income tax return. The list of forms is mentioned below:

Form 16

An employer issues the salary TDS certificate to an employee. Provides details, such as:

1. Gross salary

1. Exemptions such as HRA and LTA

1. Net taxable salary

1. Other income or losses reported

1. Tax-saving deductions

1. TDS on salary

Form 26AS

Provides consolidated statements of taxes linked to a taxpayer’s PAN. It shows the following details:

1. TDS on income such as salary, interest, and property transactions

1. Details of advance tax

1. Self-assessment tax paid

1. Specified financial transactions

Form 15G and Form 15H

These are self-declaration forms to receive income without TDS, which must be submitted to the payer.

1. Form 15G applies to individuals below 60 years whose total income is below the basic exemption limit.

1. Form 15H applies to senior citizens with nil tax liability.

Penalty for Late Filing of ITR

In case the returns are not filed by the due date, huge penalties are levied on the taxpayer. Apart from penalties, there could be other inconveniences and consequences that the individual would face in case the returns are not filed.

Depending on when the returns are filed after the due date, individuals could face penalties between Rs.1,000 and Rs.10,000.

Given below is the penalties that are levied for a delay in ITR filing:

Apart from penalties, in case taxpayers are eligible to receive a refund, there will be a delay in case the ITR is filed late. Taxpayers will also have to pay a 1% interest on the pending amount in case the returns are not filed on time.

Union Budget 2026-2027: Key Proposals

The Union Budget 2026–27 left income tax rates unchanged but introduced targeted measures to simplify tax compliance for individuals and small taxpayers, and those are listed below:

Income tax (I-T) filing due date extended:

1. The due date for filing ITR-3 and ITR-4 has been extended to 31 August instead of 31 July.

1. This extension of due date applies to non-audit business cases and trusts.

Updated returns: 

1. Taxpayers can file updated tax returns to disclose additional income even after the original return is filed. 

1. This facility is available for up to four years from the end of the relevant tax year. 

1. Updated returns can be filed with an additional tax of 25%, 50%, 60%, and 70% from the first to the fourth year, respectively, from the year of original filing. 

1. The Budget proposes allowing updated returns even after reassessment proceedings are initiated by the IT Department. 

1. In such cases, an additional 10% tax will apply over and above the applicable rate for the relevant year. 

1. No penalty will be levied on the additional income disclosed in an updated return. 

Focus on Small Taxpayers

1. To disclose income or assets below a certain size that one-time six-month foreign asset disclosure scheme introduced for small taxpayers, such as relocated NRIs, students, young professionals, and tech employees.

1. Instead of filling out the application with the assessing officer, rule-based automated processes are enabled for obtaining a nil or lower deduction certificate.

Note: New Income Tax Act will be effective from 1 April 2026.