Why Filing Your ITR Matters — Even If TDS Has Been Deducted

Many salaried employees assume that since their employer deducts TDS every month, they don’t need to file an ITR. This is one of the most common and costly misconceptions in Indian personal finance.

Here is why you must file — regardless of TDS:

1. To claim a refund If excess TDS was deducted (because you didn’t submit investment proofs on time, or your declarations changed mid-year), filing ITR is the only way to get that money back. Millions of Indians are owed refunds they never claim.
2. To avoid penalties If your total income exceeds ₹2.5 lakh (old regime) or ₹3 lakh (new regime) and you don’t file, you can be levied a late filing fee of up to ₹5,000 under Section 234F — even if no tax is due.
3. For loan applications Banks and NBFCs require the last 2–3 years of ITR acknowledgements for home loans, personal loans, and business loans. No ITR = loan rejection or significant delays.
4. For visa applications Most embassies (US, UK, Schengen, Canada, Australia) require ITR filings as proof of financial standing. Missing ITR filings can result in visa rejection.
5. To carry forward capital losses If you made losses in equity investments, you can carry them forward to offset future gains — but only if you file your ITR on time, before the due date.
6. To establish financial credibility A clean ITR filing history is a mark of financial responsibility — useful for everything from credit card approvals to business partnerships.

The bottom line: Filing ITR is not optional for anyone whose income exceeds the basic exemption limit. It is a legal obligation — and a financially smart habit.

Key Dates and Deadlines for ITR Filing (FY 2025-26 / AY 2026-27)

FY vs AY — the perennial confusion:

• Financial Year (FY): The year in which you earned the income (April to March)
• Assessment Year (AY): The year following the FY, in which that income is assessed and taxed

Income earned in FY 2025-26 (April 2025 to March 2026) is reported in the ITR filed in AY 2026-27 (by July 31, 2026).

Which ITR Form Should You File? (Salaried Employees)

This is one of the most common questions — and getting it wrong can result in a defective return notice.

For most salaried employees: ITR-1 is the right form — provided total income is below ₹50 lakh and there are no capital gains from stocks or mutual funds during the year.

If you redeemed mutual funds or sold stocks during FY 2025-26: You must file ITR-2, not ITR-1 — even if the gains are small. Filing the wrong form results in a defective return notice from the Income Tax Department.

Documents You Need Before You Start

Gather these before sitting down to file. Having everything ready reduces filing time to 20–30 minutes.

From Your Employer:

• Form 16 (Part A + Part B) — issued by June 15; the primary document showing total salary and TDS
• Salary slips for the full year (as backup)

From the Income Tax Portal:

• Form 26AS — Tax Credit Statement showing all TDS deducted by all deductors (download from incometax.gov.in)
• AIS (Annual Information Statement) — a comprehensive statement of all financial transactions reported against your PAN: salary, interest income, mutual fund redemptions, property purchases, etc.
• TIS (Taxpayer Information Summary) — a simplified version of AIS

Bank Documents:

• Interest certificates from all banks (savings account interest, FD interest)
• Bank account number and IFSC code for refund credit

Investment Documents:

• PPF passbook or statement (contribution amount)
• ELSS/mutual fund statements (for 80C claims; redemption details for capital gains if filing ITR-2)
• NPS contribution statement (for 80CCD(1B) claim)
• Life insurance premium receipts (for 80C)
• Health insurance premium receipts (for 80D)
• Home loan interest certificate (for Section 24b deduction)
• Rent receipts (if HRA was not fully processed by employer)

Personal Documents:

• PAN card
• Aadhaar number (linked to PAN — mandatory for e-filing)

Step-by-Step ITR Filing Guide (ITR-1, Online)

Step 1 — Log In to the Income Tax Portal

Go to incometax.gov.in. Click “Login.” Enter your PAN as User ID and your password. If you are a first-time user, click “Register” and complete registration using your PAN and Aadhaar.

Step 2 — Download and Verify Form 26AS and AIS

Before filling any details, download and carefully review:

Form 26AS:

• Go to: e-File → Income Tax Returns → View Form 26AS
• Check that all TDS entries match what is shown in your Form 16
• Verify interest income entries from banks match your actual receipts
• Any discrepancy between Form 26AS and Form 16 must be resolved with your employer before filing

AIS (Annual Information Statement):

• Go to: Services → Annual Information Statement
• Review all reported transactions: salary, interest income, mutual fund transactions, high-value purchases
• If any information is incorrect, you can provide feedback directly in the AIS portal
• Reconcile AIS with your own records — the ITR system pre-fills data from AIS, so errors here will appear in your pre-filled return

This step is critical. Filing without checking Form 26AS and AIS first is the most common cause of ITR mismatches and subsequent income tax notices.

Step 3 — Start Your ITR Filing

Go to: e-File → File Income Tax Return

Select:

• Assessment Year: 2026-27
• Mode: Online
• Status: Individual
• ITR Form: ITR-1 (if eligible — see form selection guide above)

Click “Proceed with ITR-1.”

Step 4 — Review Pre-Filled Data

The portal will pre-fill a significant portion of your ITR using data from Form 26AS, AIS, and your employer’s TDS filings. Review every pre-filled section carefully:

Personal Information tab:

• Verify name, PAN, Aadhaar, date of birth, contact details, and address
• Select residential status (Resident, Non-Resident, or Resident but Not Ordinarily Resident)
• Select filing type (Original Return)
• Select tax regime (Old or New — choose the one you declared to your employer; if unsure, the portal will calculate both and show which is beneficial)

Gross Total Income tab:

• Salary Income: Should match your Form 16 Part B. Verify gross salary, exemptions (HRA, LTA, standard deduction), and net taxable salary
• Income from House Property: If you have a home loan, enter annual interest paid (up to ₹2 lakh deduction under Section 24b for self-occupied property). If you receive rent, declare rental income minus standard 30% deduction and interest
• Income from Other Sources: Add all interest income — savings account interest, FD interest, RD interest, post office interest. Cross-check with your AIS. This section is most commonly under-reported and a common trigger for income tax notices

Step 5 — Enter Deductions

Click on the “Deductions” tab. Enter every applicable deduction — the portal will not claim these automatically; you must enter them:

Under Chapter VI-A:

Important: The portal pre-fills some deductions from Form 16 (like 80C and 80D if your employer processed them). Review these carefully — if you made investments your employer didn’t capture (e.g., PPF contributions made in February after employer’s investment proof deadline), add them manually here.

Step 6 — Compute Tax and Verify

After entering all income and deductions, the portal will compute your total tax liability.

Check:

• Total income displayed matches your own calculation
• All deductions are correctly captured
• Tax payable / refundable amount makes logical sense

If tax is payable: Pay the balance tax online through the portal (Challan 280) before submitting the ITR. Filing with outstanding tax liability invites interest under Section 234B and 234C.

If a refund is due: Verify that your bank account details (account number, IFSC, bank name) are pre-validated in the portal. Refunds are directly credited to your bank account — typically within 2–6 weeks of filing for electronically verified returns.

Verify your pre-validated bank account: Go to: Profile → My Bank Account → Add/Verify Bank Account before filing, if not already done.

Step 7 — Submit the Return

Once all details are reviewed and tax computations verified, click “Preview and Submit.” Review the full return one final time, then click “Submit.”

After submission, you receive an Acknowledgement Number (ITR-V). Download and save this PDF — it is proof of filing.

Step 8 — E-Verify Your Return (Mandatory — Within 30 Days)

Filing your ITR is not complete until it is verified. An unverified ITR is treated as not filed. You have 30 days from filing to e-verify.

E-verification methods (choose one):

Aadhaar OTP is the fastest and most recommended method. It takes 60 seconds.

After e-verification, you receive a confirmation SMS and email from the Income Tax Department. Your filing is now complete.

What Happens After You File?

Processing: The CPC (Centralized Processing Centre, Bengaluru) processes your return. For most straightforward ITR-1 returns, processing happens within 2–4 weeks.

Intimation under Section 143(1): After processing, you receive an intimation (email and on-portal) confirming either:

• Return accepted as filed (no discrepancy)
• Demand raised (if department finds additional tax payable)
• Refund determined (if you overpaid)

Refund credit: Refunds are typically credited within 2–6 weeks of e-verification for simple returns with pre-validated bank accounts. Track refund status at incometax.gov.in under “Refund/Demand Status.”

Filing Under Old Regime vs New Regime — Making the Right Choice

At the time of ITR filing, you can choose your tax regime — even if it differs from what you declared to your employer during the year. The ITR filing is the final determination.

If your employer deducted TDS under the new regime but you want to file under the old regime (because you have significant deductions): declare old regime in your ITR. If you are eligible for a refund due to the difference, it will be processed.

The portal calculates tax under both regimes and shows you the comparison. Use this to make the optimal choice at filing time.

Regime choice at ITR filing (salaried employees): Can switch between old and new regime every year.

The Most Common ITR Filing Mistakes to Avoid

1. Not reporting interest income from savings accounts and FDs Every rupee of interest income must be reported — even if it is a small amount. Banks report this to IRDAI and it appears in AIS. Non-reporting triggers an income tax notice.
2. Mismatching TDS claims with Form 26AS If you claim TDS credit that doesn’t appear in Form 26AS (because your employer made an error in TDS filing), your claim will be rejected. Always reconcile Form 16 with Form 26AS before filing.
3. Filing ITR-1 when ITR-2 is required If you redeemed mutual funds or sold shares during the year — even at a loss — you must file ITR-2. Filing ITR-1 in this case results in a defective return notice.
4. Not e-verifying within 30 days An unfiled ITR is treated as if you never filed — with all associated penalties. Set a reminder immediately after filing to complete e-verification.
5. Forgetting to report income from previous employer If you changed jobs during FY 2025-26, you have two Form 16s. Both must be consolidated and the total salary from both employers reported in your ITR. Many employees only report their current employer’s income.
6. Entering wrong bank account details for refund A wrong account number or IFSC means your refund credit fails. Verify bank details in the portal before filing.
7. Not carrying forward capital losses If you had investment losses in FY 2025-26, they can be carried forward for up to 8 years to offset future gains — but only if you file your ITR before the July 31 deadline. Missing the deadline forfeits this benefit.
8. Ignoring the revised return option Made an error after filing? You can file a Revised Return any time before December 31, 2026. Many people don’t know this and live with an error unnecessarily.

What If You Miss the July 31 Deadline?

Belated Return (August 1 – December 31, 2026): You can still file — but with a late filing fee:

• ₹5,000 if total income exceeds ₹5 lakh
• ₹1,000 if total income is between ₹2.5–₹5 lakh
• Nil if total income is below the basic exemption limit

Additionally, you cannot carry forward capital losses if you file after July 31.

Updated Return — ITR-U (Up to 2 Years Late): Even if you missed both the original and belated deadlines, you can file an Updated Return (ITR-U) within 2 years from the end of the relevant assessment year — with an additional tax of 25% (if filed in Year 1) or 50% (if filed in Year 2) of the tax and interest due. Useful for correcting mistakes or declaring missed income.

The message: File on time. Every year. July 31 is the date.

ITR Filing for Special Situations (Salaried Employees)

Changed Jobs During the Year

Collect Form 16 from both employers. Consolidate total salary income from both. Report combined income in ITR. Common mistake: only reporting current employer’s income and missing out on previous employer’s TDS credit.

Interest Income From Multiple Banks

Collect interest certificates from every bank where you hold savings accounts, FDs, or RDs. Add them all. Declare the total under “Income from Other Sources.” Cross-check with AIS.

Dividend Income From Mutual Funds or Stocks

Dividends are taxable in your hands at your applicable income slab rate (post April 2020). Dividend income is reported in AIS. Declare it under “Income from Other Sources.”

Working From Home — No Rent Paid

If you lived with parents or in your own home and did not pay rent, HRA is fully taxable. Ensure your Form 16 reflects this correctly.

Home Loan — First Year of Possession

Interest paid during the construction period (pre-possession interest) can be claimed in 5 equal instalments starting from the year of possession — in addition to the current year’s interest (subject to the overall ₹2 lakh cap for self-occupied property).

Frequently Asked Questions (FAQs)

Q: What is ITR and why do salaried employees need to file it?
A: ITR (Income Tax Return) is the annual declaration of your total income, deductions, and tax liability to the Income Tax Department of India. Salaried employees must file even if TDS has been deducted — to claim refunds, carry forward capital losses, maintain financial records for loans and visa applications, and comply with the legal requirement for anyone with income above the basic exemption limit.

Q: What is the ITR filing deadline for salaried employees in India in 2026?
A: The deadline for salaried employees without audit requirements to file ITR for FY 2025-26 (AY 2026-27) is July 31, 2026. After this date, a belated return can be filed until December 31, 2026 with a late fee of up to ₹5,000.

Q: Which ITR form should salaried employees use?
A: Most salaried employees with total income below ₹50 lakh from salary, one house property, and other sources (no capital gains) should file ITR-1 (Sahaj). If you had capital gains from mutual fund redemptions or stock sales during the year, you must use ITR-2 instead.

Q: What is Form 16 and where do I get it?
A: Form 16 is a TDS certificate issued by your employer by June 15 each year. It contains Part A (TDS deposited on your behalf, employer and employee PAN/TAN details) and Part B (detailed salary breakup, deductions claimed, taxable income computation). It is the primary document you need to file your ITR. If your employer hasn’t issued it by June 15, request it from HR.

Q: What is Form 26AS and why is it important for ITR filing?
A: Form 26AS is your Tax Credit Statement — a consolidated record of all taxes deducted and deposited on your behalf by all deductors (employer, banks, others). Before filing your ITR, verify that the TDS shown in Form 16 matches Form 26AS. Any mismatch means your TDS credit claim may be rejected, leading to a demand notice.

Q: What is AIS (Annual Information Statement) in income tax?
A: AIS is a comprehensive statement on the income tax portal that shows all financial transactions reported against your PAN — salary, interest income, dividend income, mutual fund purchases and redemptions, property transactions, and more. It is more detailed than Form 26AS. Reviewing AIS before filing ITR helps you identify all income you need to report and avoid income tax notices.

Q: How do I e-verify my ITR?
A: After submitting your ITR, e-verify it within 30 days through one of these methods: Aadhaar OTP (fastest — OTP sent to your Aadhaar-linked mobile), net banking, bank account EVC, or Demat account. Aadhaar OTP verification is the simplest and takes under 60 seconds. An unverified ITR is treated as not filed.

Q: What happens if I file ITR after the July 31 deadline?
A: Filing after July 31 but before December 31 (belated return) attracts a late filing fee of ₹5,000 (or ₹1,000 if income is below ₹5 lakh). You also lose the ability to carry forward capital losses from the year. Interest under Section 234A may also apply on any outstanding tax. File on time to avoid these consequences.

Q: Can I revise my ITR after filing?
A: Yes. If you discover an error or omission after filing, you can file a Revised Return any time before December 31 of the assessment year (December 31, 2026 for AY 2026-27). There is no penalty for revising a return. You can revise a return multiple times before the deadline.

Q: What is the penalty for not filing ITR in India?
A: If your income exceeds the basic exemption limit and you don’t file by July 31, you face a late filing fee under Section 234F (up to ₹5,000), interest on outstanding tax under Sections 234A/B/C, potential scrutiny notice from the Income Tax Department, and inability to carry forward capital losses. Deliberate non-filing of large-income returns can attract prosecution in extreme cases.

File Early, File Accurately, File Every Year

ITR filing is not the terrifying, complex exercise most people imagine. For the vast majority of salaried employees, it is a 20–30 minute annual task — once you have your documents in order.

The key habits that make it effortless:

• Keep Form 16, interest certificates, and investment proofs in one folder throughout the year
• Review Form 26AS and AIS in June, before filing season stress begins
• File in the first two weeks of July — not the last two days, when the portal is under peak load
• E-verify immediately after filing — don’t let this step slip

Your financial credibility, refund claims, capital loss carry-forwards, and loan eligibility all depend on one simple annual action. Make it a non-negotiable date on your calendar — every July.

Have questions about which ITR form applies to your situation, how to handle income from multiple employers, or how to maximise deductions in your return? Reach out through our Contact Page — we’ll help you file correctly and completely.

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• How to Save Income Tax in India – Complete Guide to Legal Tax Saving Beyond Section 80C
• NPS Explained – Tax Benefits, Returns & Should You Invest?
• Health Insurance Explained – How Much Cover You Need & How to Choose the Right Plan
• How to Start Investing in India – A Complete Beginner’s Guide (2026)

Disclaimer: This article is for educational and informational purposes only and does not constitute tax or legal advice. ITR filing procedures, deadlines, and tax provisions cited are based on publicly available information as of AY 2026-27 and are subject to change. Always verify current provisions at incometax.gov.in and consult a qualified Chartered Accountant for personalised tax filing guidance.