Know Your Deadline: Don't Be Late
The most crucial date for salaried individuals and those who do not require a tax audit is July 31, 2026. This deadline applies to taxpayers filing forms ITR-1 and ITR-2. Missing this date can lead to a late filing fee of up to ₹5,000. While taxpayers with
business income not requiring an audit have until August 31, 2026, it is wise for everyone to file early to avoid last-minute portal glitches. As of late July, the government has not indicated any extension, so it is best to assume the deadline is firm.
New vs. Old Tax Regime: What's the Default?
For the Assessment Year (AY) 2026-27, the New Tax Regime is the default option for all taxpayers. This regime offers lower tax rates but forgoes most popular deductions like those under Section 80C and HRA. If you have significant investments and expenses that qualify for deductions, you may benefit from the Old Tax Regime. However, you must actively choose to opt for the old regime when filing your return. Salaried individuals filing ITR-1 or ITR-2 can make this choice directly in the form, without needing to file any separate declaration.
Key Changes in the New Tax Regime
The New Tax Regime has been made more attractive with a few key changes. The rebate under Section 87A has been enhanced, which means individuals with a taxable income of up to ₹12 lakh may end up paying zero tax. For salaried individuals, a standard deduction of ₹75,000 is now available, effectively making income up to ₹12.75 lakh tax-free under specific conditions. The basic exemption limit under this regime has also been raised to ₹4 lakh. These changes are designed to provide more disposable income to middle-income earners.
Updated ITR Forms and Reporting
The Income Tax Department has introduced several changes to the ITR forms for AY 2026-27. One taxpayer-friendly change is that those filing ITR-1 can now report income from up to two house properties, a facility previously unavailable. Additionally, reporting requirements have been made more stringent. There are new, specific columns for disclosing turnover and income from futures and options (F&O) trading. Enhanced disclosure is also required for any interest payments to MSMEs that have been disallowed under Section 43B(h).
Choosing the Right ITR Form
Selecting the correct form is the first step to a successful filing. ITR-1 (Sahaj) is for resident individuals with a total income of up to ₹50 lakh from salary, up to two house properties, and other sources like interest. ITR-2 is for individuals and Hindu Undivided Families (HUFs) who have income from capital gains but no income from a business or profession. ITR-3 is meant for individuals and HUFs with income from a business or profession, while ITR-4 (Sugam) is for those opting for the presumptive taxation scheme.
Before You File: A Final Checklist
Before you hit submit, ensure you have reconciled all your financial data. Compare your Form 16 from your employer with your Annual Information Statement (AIS) and Form 26AS available on the income tax portal. The AIS provides a comprehensive view of your financial transactions throughout the year, including interest income and securities transactions. Make sure all your bank accounts are declared in the ITR, and that the one selected for a potential refund is pre-validated. Finally, after filing, you must e-verify your return within 30 days to complete the process.
