Reconcile Your AIS and Form 26AS
This is the most critical step before filing. The Annual Information Statement (AIS) and Form 26AS are comprehensive records of your financial year. The AIS, in particular, details transactions like interest income, dividends, and securities sales that
your Form 16 might not capture. The Income Tax Department has access to this data, and any mismatch between what you report and what is in their records is the quickest way to get a notice. Download both statements from the e-filing portal, compare them with your own records like bank statements and Form 16, and ensure the income you declare in your ITR aligns with these documents. If you find discrepancies in the AIS, you have the option to submit feedback online.
Report All Sources of Income
Many salaried taxpayers make the mistake of only reporting the income shown on their Form 16. However, you are required to declare income from all sources. This includes interest earned from savings accounts and fixed deposits, dividend income from stocks or mutual funds, rental income, and any capital gains from the sale of shares or property. Even income that is exempt from tax should be reported in the designated schedules. Failing to disclose all your income streams is a major red flag for the tax department and can result in scrutiny.
Consolidate Income from All Employers
If you switched jobs during the financial year 2025-26, you would have received a Form 16 from each employer. A common error is to file a return based on just the final employer's Form 16. You must club the income from all your employers and report the total salary. Each employer calculates TDS based on the salary they pay, often without considering your income from a previous job. This can lead to a lower total TDS deduction than your actual tax liability for the year, resulting in a tax demand when you file your return.
Choose the Correct Tax Regime
For the Assessment Year 2026-27, the New Tax Regime is the default option. However, it might not be the most beneficial for everyone. The Old Tax Regime allows you to claim various deductions and exemptions like those under Section 80C (for investments), 80D (health insurance), and HRA. The New Regime offers lower slab rates but forgoes most of these deductions. Before filing, perform a comparative analysis to see which regime results in a lower tax outgo for you. For salaried individuals without business income, this choice can be made each year directly in the ITR form.
Select the Right ITR Form
Filing the wrong ITR form can lead to your return being classified as 'defective'. For most salaried individuals, ITR-1 (Sahaj) is applicable if your total income is up to ₹50 lakh from salary, one house property, and other sources like interest. However, if you have any capital gains from selling stocks or mutual funds, have income from more than one house property, or your income exceeds ₹50 lakh, you will likely need to file ITR-2. Always verify the conditions for each form before starting your filing.
Verify Your Bank Account for Refunds
If you are due a refund, it will be credited to a pre-validated bank account linked to your PAN. Log in to the income tax portal and ensure that the bank account you wish to receive the refund in is listed and marked as 'Validated'. An incorrect or unvalidated account is a primary reason for refund failures, leading to unnecessary delays and follow-ups. Double-check the account number and IFSC code before final submission.
Don't Forget to E-Verify Your Return
Simply submitting your ITR is not the final step. The process is only complete once you have verified your return. You have 30 days from the date of filing to e-verify it. An unverified return is considered invalid, as if it were never filed at all. The easiest and quickest method for e-verification is through an Aadhaar OTP. Other options include using net banking or a pre-validated bank or demat account. Skipping this final, simple step can nullify all your hard work.
