Which ITR form to use
India has six ITR forms; most individuals use one of these four:
ITR-1 (Sahaj): salaried + pension + one house property + savings interest, total income under Rs 50 lakh. Simplest form, fastest filing.
ITR-2: same as ITR-1 but with capital gains, foreign income, foreign assets, multiple house properties, or income over Rs 50 lakh. Most professionals with stock investments use ITR-2.
ITR-3: business income or professional fees (freelancers without 44ADA option). Most complex - requires P&L and balance sheet.
ITR-4 (Sugam): freelancers + small businesses opting for presumptive taxation under Section 44ADA (50 percent of gross receipts taxed as profit, no books required) or 44AE (transport).
For most salaried Indians: ITR-1 if income under Rs 50 lakh and no stock gains. ITR-2 if you sold mutual funds, stocks, or have foreign income.
What you need before you start
Form 16 from your employer (mandatory if salary exceeded Rs 2.5 lakh). Available by June 15.
Form 26AS - downloads from the portal under "View 26AS." Shows all TDS deducted in your name.
AIS (Annual Information Statement) - new since 2021, shows interest, dividends, stock transactions, mutual fund redemptions, property transactions. Download from compliance portal.
Bank statements for the full FY (April 2025 - March 2026), highlighting interest received and any unusual deposits.
Capital gains statements from your broker if you sold stocks or mutual funds. Zerodha, Upstox, Groww all provide a "P&L statement" for the FY.
Home loan interest certificate (Section 24 deduction up to Rs 2 lakh for self-occupied).
80C investment proofs: PPF passbook, ELSS folio statements, life insurance premium receipts, tuition fee receipts, NSC certificates.
80D health insurance premium receipts (Rs 25,000 self + family; Rs 50,000 if senior citizen parents).
| ITR Form | Best for | Excludes | Complexity |
|---|---|---|---|
| ITR-1 (Sahaj) | Salaried, single property, under Rs 50L | Capital gains, foreign income | Simple |
| ITR-2 | Salaried + capital gains + multiple properties | Business income | Medium |
| ITR-3 | Business + profession + capital gains | - | High |
| ITR-4 (Sugam) | Presumptive (44ADA/44AE) | - | Medium |
| Action | Deadline | Penalty |
|---|---|---|
| Regular ITR filing (no audit) | July 31, 2026 | None |
| Audit cases | October 31, 2026 | None |
| Belated return | December 31, 2026 | Rs 5,000 |
| Belated return + late fee | After Dec 31, 2026 | Rs 10,000 |
| Updated return (139(8A)) | 2 years from end of AY | Significant penalty |
Filing the return - the actual steps
Step 1: log in to incometax.gov.in with PAN and password.
Step 2: click "e-file" then "Income Tax Returns" then "File Income Tax Return."
Step 3: select Assessment Year 2026-27 (which covers FY 2025-26 income).
Step 4: select "Online" filing mode.
Step 5: select the right ITR form (Sahaj/2/3/4).
Step 6: confirm filing status (Individual, HUF, etc.) and residential status.
Step 7: the portal pre-fills most data from Form 26AS, AIS, and Form 16. Verify each number. Add anything missing manually.
Step 8: declare bank accounts and select one for refund credit. Pre-validate the bank account (mandatory).
Step 9: claim deductions under Chapter VI-A (80C, 80D, 80E education loan, 80G charity, 80TTA savings interest).
Step 10: review tax computation. If a refund is due, confirm. If extra tax is owed, pay via Challan 280 BEFORE filing.
Step 11: submit the return. Get acknowledgment number.
Step 12: e-verify within 30 days via aadhaar OTP (fastest), net banking, or by mailing signed ITR-V to CPC Bengaluru.
Common mistakes that trigger notices
- AIS-26AS mismatch. The IT Department now cross-references AIS data with what you declared. Stock sales, dividends, mutual fund redemptions, and high-value deposits in AIS must match your ITR. Mismatch triggers a Section 143(1) notice.
- Forgetting to declare savings account interest. Rs 10 in interest still needs declaring. Use 80TTA for the Rs 10,000 deduction if eligible.
- Wrong regime selection. Old vs new is a one-shot annual decision (after FY 2023-24 it can switch each year, but auto-default is new). If you have heavy 80C usage, explicitly select old.
- Missing capital gains from mutual fund SIPs. Each SIP installment held over a year and sold creates a long-term capital gain. Brokers send consolidated statements but you must enter them on ITR-2.
- Claiming HRA without rent receipts. Above Rs 1 lakh annual rent, landlord PAN is required.
- Bank account not pre-validated. Refund will not be issued until you validate.
- Filing after July 31 without checking penalty. Section 234F adds Rs 5,000 if filed by December 31, Rs 10,000 after.
- Not e-verifying. Submission alone is not enough. E-verify within 30 days or the return is invalid.
After filing - tracking refund + responding to notices
After e-verification, the IT Department processes the return. Standard processing time is 21-45 days. Refund credit:
- Track refund status at incometax.gov.in/iec/foportal/refund-status.
- Refund credited only to pre-validated bank accounts.
- If refund is delayed past 60 days, file a grievance via the portal.
| If you receive a Section 143(1) notice (intimation) | If you receive a Section 143(2) notice (scrutiny) |
|---|---|
| This is automatic. It compares what you filed with what the system has on Form 26AS/AIS. | Manual review by Assessing Officer. |
| If you agree with the adjustments, no action needed. | Must respond within 30 days with supporting documents. |
| If you disagree, file a rectification request within 4 years. | Typically resolved within 6-12 months. |
If you missed July 31 - file a belated return by December 31, 2026 with Section 234F penalty. After December 31, you cannot file the regular return; only updated return under Section 139(8A) within 24 months, with significant penalty.
Run the math for your situation
Use our IN calculator to plug in your own numbers.