The Final Countdown for ITR Filing
July marks the final month for a large number of taxpayers to file their Income Tax Returns (ITR) for the Financial Year 2025-26 (Assessment Year 2026-27). The deadline for most salaried individuals and those who do not require a tax audit (filing ITR-1
or ITR-2) is July 31, 2026. Missing this crucial date can lead to several undesirable consequences. A late filing fee of up to ₹5,000 may be levied for returns filed after the due date but before December 31, 2026. For those with a total income under ₹5 lakh, the penalty is a more manageable ₹1,000. Beyond the penalty, late filing can also mean you lose the ability to carry forward certain losses (like those from capital gains) to set off against future income, and you may face delays in receiving any tax refunds.
TDS Return Filing for Q1
For businesses and individuals who deduct tax at source (TDS), July 31 is also the deadline to file quarterly TDS returns for the first quarter of the financial year (April to June 2026). This includes filing forms like 24Q for salary TDS and 26Q for non-salary payments. Timely filing is essential for the deductees to be able to see the tax credit in their Form 26AS and claim it while filing their own ITRs. Failure to file on time attracts a penalty of ₹200 for each day of delay, though this penalty is capped at the total TDS amount for that quarter. Additionally, the deadline to deposit the TDS collected in the month of June is July 7.
Stability in Small Savings Schemes
The government has announced the interest rates for small savings schemes for the second quarter of FY 2026-27, which runs from July 1 to September 30, 2026. In a move providing stability for conservative investors, the rates have been kept unchanged for the ninth consecutive quarter. This means the Public Provident Fund (PPF) will continue to earn 7.1%, the Senior Citizen Savings Scheme will offer 8.2%, and the Sukanya Samriddhi Scheme will also maintain its rate at 8.2%. Similarly, the National Savings Certificate (NSC) will provide a return of 7.7%. This decision ensures that investors in these popular schemes can continue with their financial planning with predictable returns for another three months.
New Banking Rules and Credit Card Changes
Starting July 1, the Reserve Bank of India's new framework against the mis-selling of financial products by banks comes into effect. These rules mandate that banks must obtain explicit consent from customers before selling them any financial products and must recommend only suitable products. If a customer is proven to have been mis-sold a product, they are entitled to a full refund. On the credit card front, several banks are revising their terms. For instance, HDFC Bank has changed its lounge access program; cardholders now need to spend at least ₹60,000 in the previous quarter to avail complimentary domestic lounge visits. SBI Card is also revising its reward points program for some of its co-branded cards from July 1.
Other Important Financial Deadlines
July brings a few other changes to be aware of. The Unique Identification Authority of India (UIDAI) is offering a bonus for Aadhaar holders. From July 1 to December 31, 2026, the fee for updating the email address linked to your Aadhaar will be waived. Normally, this service costs ₹75. Additionally, for those planning international travel, be prepared for an increase in passport fees. The Ministry of External Affairs has hiked the service fees for both normal and Tatkal passports from July 1, 2026. It's also the last month to file certain prescribed income tax forms like Form 10BA for claiming deductions on rent paid (Section 80GG) and Form 10E for relief on salary arrears.
