Income Tax Return (ITR) Filing Guide for Beginners (2026)

AY 2026-27 or tax year 2026-27: what changed under the new Act

The 2025 Act replaced “previous year” and “assessment year” with a single “tax year”, but it does not reach back to income earned before April 2026. The department’s own FAQ is clear: the return for 2025-26 income is governed “entirely by the old Act”. Here is how the two years line up.

You do not file two returns in 2026-27. Under the new Act, a belated return is allowed within 9 months from the end of the tax year and a revised return within 12 months. Updated returns are allowed within 48 months. The late filing fee moves to section 428 at the same amounts.

Who must file an income tax return

An individual must file if their total income, before certain deductions and exemptions, exceeds the basic exemption limit. The deductions ignored for this test include Chapter VI-A deductions (sections 80C to 80U) and capital gains exemptions such as section 54.

The basic exemption limit for AY 2026-27 is ₹4,00,000 under the new tax regime. Under the old regime it is ₹2,50,000, or ₹3,00,000 for residents aged 60 to 79 and ₹5,00,000 for residents aged 80 or above.

This catches many people off guard. A salaried person earning ₹10 lakh pays no tax under the new regime because of the rebate, but their income is above ₹4 lakh, so the return is still compulsory. Filing is also mandatory, whatever the income, if during the year you:

• deposited more than ₹1 crore in current accounts, or more than ₹50 lakh in savings accounts;
• spent more than ₹2 lakh on foreign travel, or more than ₹1 lakh on electricity;
• had business turnover above ₹60 lakh, or professional receipts above ₹10 lakh;
• had TDS or TCS of ₹25,000 or more (₹50,000 for senior citizens);
• held any asset or financial interest outside India, or signing authority in a foreign account (residents).

Residents aged 75 or above with only pension and interest from the same specified bank, where the bank deducts the tax, are exempt from filing.

Which ITR form should you use?

The right form depends on the kind of income, not the amount alone. For AY 2026-27, CBDT notified the new ITR-1 and ITR-4 on 30 March 2026 (Notification No. 45/2026). The one change beginners should know: ITR-1 now allows two house properties instead of one.

A common beginner mistake is using ITR-1 after selling shares or mutual fund units at a short-term gain. Any short-term capital gain moves you to ITR-2 (or ITR-3 if you also have business income).

Documents to keep ready

Most figures are pre-filled from the department’s records, so your main job is to check them. Gather these before you log in:

• PAN and Aadhaar, linked, and a mobile number linked to Aadhaar for OTP verification.
• A pre-validated bank account on the portal, which is where any refund is paid.
• Form 16 from your employer for 2025-26. For salary paid from April 2026, the certificate is Form 130, but that affects next year’s return.
• Form 16A or other TDS certificates for interest, rent or fees.
• Annual Information Statement (AIS) and Taxpayer Information Summary (TIS). AIS shows TDS, interest, dividends, securities trades and high-value transactions; TIS summarises it by category. Form 26AS, on TRACES, now shows only TDS and TCS.
• Bank interest certificates, capital gains statements from your broker or mutual fund, and home loan interest certificates.
• Proof of deductions (80C investments, health insurance, rent receipts) if you choose the old regime.

If AIS shows something wrong, for instance interest you never earned, you can submit feedback on that entry from the AIS page.

Old vs new tax regime: the default and how to switch

The new tax regime is the default. Unless you actively opt out, your tax is calculated under it. It has lower slab rates and a ₹75,000 standard deduction for salaried people, but it removes most deductions such as 80C and HRA.

Because of the rebate announced in Budget 2025-26, a resident individual pays no income tax on total income up to ₹12 lakh under the new regime. For salaried people the limit is ₹12.75 lakh, after the standard deduction. Special-rate income such as capital gains is outside this. The same slab table is written into section 202 of the 2025 Act, so it continues for tax year 2026-27.

The old regime (5%, 20% and 30% slabs above the exemption limit) suits people with large deductions. How you switch depends on your income:

• No business income: choose the old regime in the return itself, filed by the due date. You can decide afresh each year.
• Business or professional income: file Form 10-IEA on or before the due date to opt out. After switching back to the new regime, you can re-enter the old regime only once.

A belated return is taxed under the new regime; the option to choose the old regime is tied to filing by the due date.

How to file your ITR online, step by step

The steps below follow the department’s ITR-1 user manual; other forms work in a similar way.

1. Log in at incometax.gov.in with your PAN (user ID) and password.
2. Go to e-File, Income Tax Returns, File Income Tax Return.
3. Select Assessment Year 2026-27 and the mode “Online”, then Continue.
4. Choose “Start New Filing”, select your status (for example, Individual) and the ITR form.
5. Tick the reason for filing (for example, taxable income above the exemption limit).
6. Check the five pre-filled sections: Personal Information (where you pick the tax regime), Gross Total Income, Total Deductions, Tax Paid and Total Tax Liability. Edit and confirm each one against your AIS and Form 16.
7. If tax is payable, use “Pay Now” to pay through the portal before submitting. If a refund is due, go to Preview Return.
8. Accept the declaration, validate and preview the return, then submit it.
9. E-verify using Aadhaar OTP, an electronic verification code (EVC) or a digital signature. Alternatively, send the signed ITR-V to CPC, Bengaluru.

Verification matters as much as submission. If you verify within 30 days, the upload date counts as the filing date. If you verify later, the verification date becomes the filing date, which can make an on-time return late.

Due dates for AY 2026-27 and what happens if you miss them

Section 139(1) of the 1961 Act now gives non-audit business and professional cases until 31 August, a month more than salaried taxpayers. The dates below are as listed by the Income Tax Department, updated for CBDT’s 28 September 2026 extension for audit cases.

Missing the original date has real costs:

• Late fee under section 234F: ₹1,000 if total income is up to ₹5 lakh, otherwise ₹5,000.
• Interest under section 234A: 1% per month on unpaid tax (section 423 under the new Act).
• Losses: business and capital gains losses can be carried forward only if the return was filed by the due date.
• Regime choice: the old regime option is lost for that year.

If you miss 31 December 2026 as well, you can still file an updated return (ITR-U) within the time allowed by section 139(8A), with additional tax.

Learning ITR filing as a skill

Return filing is one of the most common tasks handed to junior accountants, especially from June to October. Firms need people who can read an AIS, match TDS credits and choose the right form, and this year also explain the switch to the new Act.

TDS is the other half of the picture. The credit you claim in a return comes from someone else’s TDS filing, as our guide on TDS meaning and return filing explains. Tax work features in the computer accountant role, and return and TDS questions appear in our accounting interview questions. If you are drawn to the government side, see how to become an income tax officer or an income tax inspector.

To practise on real cases, IPA’s 5-month Diploma in Taxation covers income tax with GST and TDS.

How we teach this at IPA

IPA’s Diploma in Taxation Law teaches the income tax practitioner’s work in the order this guide follows: the basics and heads of income, deductions under Chapter VI-A, computation of total income, advance tax, and filing the return on the e-filing portal. The diploma also has a GST module.

More guides on accounting, GST, Tally and income tax are on the IPA blog.

Frequently asked questions