Reconcile Form 16 with AIS and Form 26AS
Before you file, your most crucial task is to ensure harmony between your documents. Your Form 16, provided by your employer, details your salary and the tax deducted (TDS). However, the tax department relies on the Annual Information Statement (AIS)
and Form 26AS, which consolidate all tax-related information linked to your PAN. This includes TDS from all sources, advance tax paid, and high-value financial transactions. A mismatch between what your Form 16 says and what is reflected in your AIS/Form 26AS is a primary trigger for an automated notice. If you find a discrepancy, contact your employer immediately to have them file a revised TDS return. Always rely on the figures in Form 26AS and AIS for the most accurate picture of your tax credits.
Report All Sources of Income
A common mistake is reporting only the salary income mentioned in Form 16. The Income Tax Department has a comprehensive view of your financial life through the AIS. You must declare all income, no matter how small. This includes interest earned from savings bank accounts and fixed deposits, dividend income from shares or mutual funds, rental income, and any capital gains from the sale of property or securities. Even income that might be exempt from tax should be reported in the designated schedule. Failing to disclose all income streams can lead to a tax demand notice later.
Choose the Correct Tax Regime
For Assessment Year 2026-27, choosing between the old and new tax regimes is a critical decision that affects your final tax liability. The new tax regime is the default option and offers lower tax rates but disallows most common deductions like those under Section 80C, 80D, and HRA. The old regime has higher slab rates but allows you to claim these deductions. The right choice depends on your financial profile. If you have significant investments in PF, ELSS, pay high rent, have a home loan, or pay for medical insurance, the old regime might be more beneficial. It is advisable to compute your tax liability under both regimes before making a final choice.
Claim All Eligible Deductions Correctly
If you opt for the old tax regime, ensure you are claiming every deduction you are entitled to. Many taxpayers focus on Section 80C (up to ₹1.5 lakh for investments like EPF, PPF, ELSS, and life insurance premiums) but forget other valuable deductions. These include medical insurance premiums under Section 80D, donations under 80G, interest on an education loan under 80E, and the additional ₹50,000 for NPS contributions under Section 80CCD(1B). Also, don't forget deductions for home loan interest. Claim only those deductions for which you have valid proof, as the department may ask for it.
Verify Bank Account for Refund
This is a simple but frequently overlooked step. To receive your income tax refund without any hassle, you must have a pre-validated bank account linked to your PAN. The tax department now only issues e-refunds to such accounts. You can pre-validate multiple bank accounts through the e-filing portal but must nominate one to receive the refund. Before submitting your return, double-check that the account number, IFSC code, and your personal details like name and PAN match the bank's records perfectly. An incorrect or non-validated account is a leading cause of refund delays.
Submit and E-Verify Your Return
Filing your ITR is not the final step. The process is only complete once you have verified your return. An unverified return is treated as invalid, as if it were never filed at all. The deadline to verify your return is 30 days from the date of filing. The easiest way to do this is through e-verification. There are multiple methods available, including using an Aadhaar-linked OTP, net banking, or an Electronic Verification Code (EVC) generated through your pre-validated bank or Demat account. Once verified, you will receive an acknowledgement, marking the successful completion of your ITR filing process.
