ITR filing 2026: From choosing the right tax regime to avoiding mistakes, all you need to know

Filing income tax returns can be a stressful affair especially for firsttime taxpayers With the income tax deadline of July 31 looming herersquos what you need to know about filing your tax returns this yearIndividuals with a total annual income of up to Rs 50 lakh from salary or pension income from up to two house properties capital gains of up to Rs 125 lakh and income from savings accounts and deposits should file ITR1A salaried taxpayer whose total income exceeds Rs 50 lakh has income from more than two house properties owns overseas financial assets earns income from lotteries would be required to file returns under ITR2The deadline for salaried professionals to file their returns is July 31 2026New vs old regimeThe Finance Act 2023 amended Section 115BAC from Assessment Year AY 2024ndash25 making the new tax regime the default taxation system The new tax regime offers lower slab rates but eliminates most traditional deductions available under the old tax regime such as House Rent Allowance HRA Leave Travel Allowance LTA Section 80C and home loan interestSalaried taxpayers without business income can choose between either regime each year at the time of filingSo which tax regime is betterExperts say there is no single answer to this as it would depend on an individualrsquos income level salary structure and eligible deductions and investmentsThey suggest computing the tax under both regimes comparing the tax liability and then filing the returns under the more beneficial option According to CA Naveen Wadhwa VicePresident Taxmann even though salary income of up to Rs 1275 lakh effectively bears no tax under the new regime it is not applicable to income arising from capital gainsldquoThis rebate is not available against income taxed at special rates such as shortterm capital gains under Section 111A or longterm capital gains under Section 112A So a taxpayer with capital gains cannot assume a nil liability merely because income is within Rs 12 lakhrdquo he told middaycomCitybased Chartered Accountant Sanjana Fowkar offers a simple rule of thumb to ease the tax regime selection processldquoThe new tax regime has lower slab rates and a higher standard deduction for salaried individuals Rs 75000 making it ideal if you have minimal deductions under Rs 375 lakh or prefer simpler compliance Income up to Rs 1275 lakh can effectively be taxfree for salaried individuals under the new regime The old tax regime is better if your total deductions and exemptions such as HRA LTA Section 80C and home loan interest exceed Rs 375 lakh In this case the old regimes higher deductions can lower your taxable income more effectivelyrdquo she saysWhat are the documents you needFor salaried individuals Form 16 issued by the employer salary slips rent receipts if claiming HRA and bank statements for interest income are the essential documents If there are investments in equity shares or mutual funds then consolidated statements from stockbroker detailing profits or losses from shares and mutual funds are required In case of income from property sale documents such as the sale deed showing purchase price sale price and registration fees are requiredldquoIf Form 16 is not available collect alternative financial proofs such as monthly salary slips 26AS report AIS report bank statementsrdquo says FowkarIf you opt for the old tax regime you will need to submit taxsaving investment proofs for claiming deductions These include Section 80C receipts life insurance premium statements Public Provident Fund Equity Linked Savings Scheme Home Loan Principal Employeesrsquo Provident Fund National Saving Certificate tuition fee receipts Section 80D certificate health insurance premium receipt Section 80G receipts donation receipts containing the charitable trustrsquos name address and PAN 80GG Rent Paid Without HRA 80TTA for regular individualrsquos interest earned from all savings bank accounts combined 80CCD1B voluntary personal investments made directly into the National Pension System 80E Education LoanWhat you need to do while filing returnsEnsure that your PAN and Aadhaar card are linked According to Wadhwa the taxpayer should download the Annual Information Statement AIS the Taxpayer Information Summary TIS and Form 26AS an annual statement that consolidates all tax deducted or collected at source and tally every figure before filingBalwant Jain a tax and investment expert recommends maintaining a summary of all the documentsldquoThe data gets autopopulated in ITR but check for any discrepancies If your income is higher than what is shown in ITR then you need to show the higher income Always show your actual incomerdquo he advisesOnce you file your returns ensure to complete the everification processldquoA return that is filed but not everified within 30 days is treated as never filedrdquo says WadhwaMistakes and rectificationFiling returns in the wrong ITR form not reporting exempt income nondisclosure of all bank accounts claiming deductions under the new regime where it is not permitted are some of the common mistakes that need to be avoided while filing the returnsldquoAlso checking AIS data unreconciled TDS data with 26AS tax credits is necessary to avoid any defective return notice and to avoid penalties and legal noticesrdquo says FowkarIn case there is an error while filing the returns it can be corrected by filing a revised return under Section 1395ldquoFor the current assessment year you can file a revised return anytime on or before March 31 of the relevant assessment year or on receipt of department notice whichever is earlierrdquo states FowkarIf an individual selects the wrong ITR form while filing the returns it does not automatically invalidate the return However the return may be treated as defective under Section 1399 of the Income Tax Act and the department could issue a notice giving 15 days to correct itldquoSo a wrong form should be set right by filing a fresh return on the correct formrdquo explains WadhwaAvoid the mad dashExperts recommend avoiding a lastminute scramble to file the returns as the website could crash or slow down with millions trying to file the returns at the same timeldquoDo not wait for the last two days The portal is at its busiest then and a single mismatch with the AIS or a payment that has to be made can be hard to fix in time File a few days early using the prefilled data so there is room to correct errors and pay any balance tax calmlyrdquo says WadhwaldquoAlso you will not be able to carry forward certain losses such as stock market or business to next year if you cannot file within the stipulated due date Any wrong declaration or reporting of income results in mismatch as per departmental records and can be a reason for unwanted notices and scrutiniesrdquo Fowkar concludesWhat happens when you miss the deadlineIf a taxpayer misses the deadline then the assessee can file belated return for the assessment year on or before December 31 2026 This would attract a late fee of Rs 1000 where the total income does not exceed Rs 5 lakh and Rs 5000 in all other cases However it is mandatory to file the income tax return under the new tax regime after the due date July 31 2026 say Jain and FowkarThis feature article contains statements opinions and quotes provided by third parties Such content has been attributed to the respective speakers and is published for journalistic and informational purposes MidDay does not endorse or assume responsibility for the views expressed by quoted individuals and disclaims liability for any inaccuracies in thirdparty statements