Start Early, Avoid the Rush
One of the most common mistakes taxpayers make is waiting until the last minute. For the Assessment Year 2026-27 (covering income from FY 2025-26), the deadline for most individual taxpayers filing ITR-1 and ITR-2 is July 31, 2026. For those with business
income not requiring an audit (ITR-3, ITR-4), the deadline is August 31, 2026. Filing early not only helps you avoid the last-minute website crashes but also means your refund, if any, gets processed faster. It also gives you ample time to rectify any errors by filing a revised return. The window to file a revised return for AY 2026-27 is until March 31, 2027.
Gather Your Essential Documents
Being organised is half the battle won. Before you log in to the e-filing portal, make sure you have all your documents ready. The key documents include your PAN card, Aadhaar card, Form 16 from your employer, and bank statements. It is also crucial to download and review your Form 26AS, Annual Information Statement (AIS), and Taxpayer Information Summary (TIS) from the income tax portal. These documents provide a consolidated view of the taxes deducted on your behalf and the financial transactions reported by various entities.
Reconcile AIS and Form 26AS
The Income Tax Department now has a comprehensive view of your financial life through the AIS and TIS. These statements capture details of your salary, interest income, dividend income, and stock market transactions. One of the biggest reasons for receiving a tax notice is a mismatch between the income you declare in your ITR and the information present in your AIS or Form 26AS. Carefully go through these statements to ensure all reported incomes are accounted for in your return. If you find any discrepancies, you should get them corrected by contacting the source (e.g., your bank or employer).
Choose the Right Tax Regime
For FY 2025-26, you must choose between the old and new tax regimes. The new tax regime is the default option and offers lower tax rates but disallows most popular deductions like those under Section 80C and 80D. The old regime has higher rates but allows you to claim these deductions. The new regime is often better if you don't have significant investments to claim as deductions. With the standard deduction now at ₹75,000 for salaried individuals under the new regime (versus ₹50,000 in the old), and a rebate making income up to ₹12 lakh effectively tax-free, the new regime has become more attractive for many. It is advisable to calculate your tax liability under both regimes before making a final decision.
Select the Correct ITR Form
Filing the wrong ITR form is a common error that can lead to your return being classified as 'defective'. The choice of form depends on your sources of income. For instance, ITR-1 (Sahaj) is for resident individuals with a total income up to ₹50 lakh from salary, one house property, and other sources like interest. If you have income from capital gains, you will need to file ITR-2. Those with income from a business or profession must use ITR-3 or ITR-4. Take a moment to identify the correct form for your situation to ensure your filing is processed smoothly.
Report All Income Sources
A frequent oversight is failing to report income from all sources. This includes interest earned on savings bank accounts, fixed deposits, and recurring deposits. Even income that is exempt from tax, like interest from a PPF account or agricultural income, must be reported in your ITR. Similarly, all capital gains from the sale of stocks, mutual funds, or property must be disclosed, even if you have incurred a loss, as you can carry forward those losses to offset future gains.
Don't Forget to E-Verify
Simply submitting your ITR is not the final step. Your return is considered invalid if it is not verified. The easiest way to do this is through e-verification using options like Aadhaar OTP, net banking, or a pre-validated bank account. You have 30 days from the date of filing your return to complete the verification process. Failing to do so is equivalent to not filing at all, so ensure this final, crucial step is completed.
