How to File Income Tax Return for FY 2026-27

Filing your Income Tax Return (ITR) for the financial year 2026-27 (assessment year 2027-28) is a crucial annual obligation for every taxpayer in India. This guide walks you through every step of the process, from gathering documents to e-verification, with all updates from Budget 2026 incorporated.

Step-by-Step ITR Filing Process

Follow these steps to file your ITR for FY 2026-27 on the Income Tax Department's e-filing portal (incometax.gov.in). The entire process can be completed online in about 30-45 minutes once you have your documents ready.

Step 1: Collect All Required Documents

Before logging into the portal, ensure you have all documents organized. See the Document Checklist section below for a complete list. Having Form 16, bank interest certificates, and investment proofs handy will prevent mid-way interruptions.

Step 2: Log in to the Income Tax Portal

Visit incometax.gov.in and log in using your PAN as the user ID and your password. If you are a first-time user, register on the portal using your PAN, Aadhaar, and basic details. Ensure your Aadhaar is linked to your PAN for seamless filing.

Step 3: Pre-validate Bank Account

Navigate to 'My Profile' and then 'Bank Accounts' to pre-validate the bank account where you want your refund credited. Enter your account number, IFSC code, and confirm. Pre-validation takes 1-2 minutes and avoids refund delays later.

Step 4: Select the Correct ITR Form

From the dashboard, click 'File Income Tax Return' and select the assessment year 2027-28. The portal will ask you to select your ITR form. Refer to the table below to choose the correct form. Most salaried employees with income up to ₹50 lakh and no capital gains should select ITR-1 (Sahaj).

Step 5: Choose Your Tax Regime

You will be prompted to choose between the old and new tax regime. The new regime is the default for FY 2026-27. Compare both regimes using our Old vs New Tax Regime comparison before deciding. If you have significant deductions (80C, 80D, home loan interest), the old regime may still be beneficial.

Step 6: Fill in Income Details

Enter your income from all sources:

• Salary income: As per Form 16. Include allowances, perquisites, and bonuses.
• House property income: Rental income or deemed rental income. Deduct 30% standard deduction and home loan interest.
• Capital gains: From sale of equity shares, mutual funds, property, or other assets. Use Schedule CG.
• Income from other sources: Bank interest, fixed deposit interest, dividend income, etc.
• Business/profession income: If applicable, fill Schedule BP or Schedule C.

Step 7: Claim Deductions and Exemptions

Under the old regime, claim deductions under various sections:

Under the new regime (FY 2026-27), the only significant deduction available is the standard deduction of ₹75,000 for salaried employees and the family pension deduction. Most other deductions do not apply.

Step 8: Verify Tax Paid and TDS

The portal pre-fills your TDS data from Form 26AS and AIS (Annual Information Statement). Cross-verify the amounts. If any TDS is missing, contact your deductor to file a corrected TDS return. Enter any advance tax or self-assessment tax paid during the year.

Step 9: Calculate Total Tax Liability

The portal automatically calculates your tax liability based on your income, deductions, and the selected regime. It applies the applicable tax slab rates for FY 2026-27, surcharge, health and education cess at 4%, and the Section 87A rebate where applicable. Review the computed tax carefully. Use DesiCalc's Income Tax Calculator beforehand to ensure the figures match your expectations.

Step 10: Submit and E-Verify

Review the entire return in the preview section. If everything is correct, click 'Submit'. After submission, you must verify your return within 30 days. Verification methods include:

• Aadhaar OTP: Fastest method. An OTP is sent to your Aadhaar-linked mobile number.
• Net banking: Use your bank's net banking portal to e-verify.
• EVC (Electronic Verification Code): Generated via your bank account or demat account.
• Digital signature: Using a class 2 or class 3 digital signature certificate.
• Physical ITR-V: Send a signed physical copy of ITR-V to CPC Bangalore within 120 days.

Your ITR is considered filed only after e-verification. A return that is not verified is treated as not filed.

Which ITR Form to Use?

Choosing the wrong ITR form is one of the most common mistakes and may lead to defective return notices. Use this table to determine the correct form for FY 2026-27:

Documents Checklist for ITR Filing

Having all documents ready before you start filing saves time and prevents errors. Here is a comprehensive checklist:

Important Deadlines for FY 2026-27

Common Mistakes to Avoid While Filing ITR

1. Wrong ITR form selection: Using ITR-1 when you have capital gains or income above ₹50 lakh leads to a defective return. Always verify your form choice using the table above.
2. Mismatched income reporting: Your reported income must match Form 26AS and AIS. Discrepancies trigger scrutiny notices. Download AIS before filing and reconcile all entries.
3. Forgetting to report all bank interest: Interest from all savings accounts, FDs, and recurring deposits must be reported even if TDS has not been deducted. The AIS captures most but not all bank interest.
4. Claiming wrong deductions: Deductions under 80C, 80D, etc. require valid proofs. Claiming amounts without documentation may lead to disallowance during assessment.
5. Ignoring foreign assets and income: If you hold foreign bank accounts, stocks, or property, you must report them in Schedule FA. Non-disclosure attracts severe penalties.
6. Choosing the wrong tax regime: The new regime is default but may not be optimal for everyone. Compare thoroughly before selecting. Once selected, you cannot change for that year.
7. Not e-verifying the return: Submission without e-verification is incomplete. The return is considered not filed until verified. Set a reminder to e-verify within 30 days.
8. Missing the deadline: Late filing attracts a fee under Section 234F (₹1,000 to ₹10,000), interest under Section 234A, and loss of certain benefits like carrying forward losses.

How to Choose Between Old and New Tax Regime for FY 2026-27

The choice of tax regime is one of the most important decisions while filing ITR. Here is a framework to decide:

New Regime (Default from FY 2026-27)

• Tax slabs: 0-4L (nil), 4-8L (5%), 8-12L (10%), 12-16L (15%), 16-20L (20%), 20-24L (25%), above 24L (30%).
• Standard deduction: ₹75,000 for salaried employees.
• 87A rebate: Max ₹60,000. Effectively zero tax up to ₹12 lakh net taxable income (₹12.75 lakh including standard deduction).
• Limited deductions: Only standard deduction, family pension deduction, and employer's PF contribution allowed.

Old Regime (Optional)

• Tax slabs: 0-2.5L (nil), 2.5-5L (5%), 5-10L (20%), above 10L (30%). Surcharge applies for income above ₹50L.
• Standard deduction: ₹50,000 for salaried employees.
• 87A rebate: Max ₹12,500. Effectively zero tax up to ₹5 lakh net taxable income.
• Full deductions: 80C (₹1.5L), 80D (₹25K-₹1L), home loan interest (₹2L), HRA exemption, and many more.

Rule of thumb: If your total deductions (80C + 80D + home loan interest + HRA) exceed ₹3.75 lakh, the old regime is likely better. For most others, especially those with income between ₹7.5 lakh and ₹25 lakh and limited deductions, the new regime will result in lower tax. Use the DesiCalc Income Tax Calculator to compute exact tax liability under both regimes.

Frequently Asked Questions