ITR Filing for Salaried Employees for Assessment Year 2026-27 (Tax Year 2025-26)

Introduction

Filing your salaried income tax return on time is a critical compliance obligation under Indian tax laws. For the Assessment Year 2026-27 (Tax Year 2025-26), the filing window has officially opened. To ensure error-free filing and secure your legitimate refunds, salaried individuals must navigate structural administrative updates introduced under the unified tax system. With the default New Tax Regime offering an increased standard deduction and expanded rebate slabs, planning your filing carefully helps prevent common notice triggers.

This guide provides a comprehensive step-by-step approach to ITR filing for salaried individuals, highlighting the selection of correct forms, reconciliation of tax credits, and the calculations governing zero-tax limits.

Scope Clarification

What This Article Covers

• Criteria for salaried individuals filing ITR-1 or ITR-2 for AY 2026-27.
• Reconciliation procedures for the new Form 130 (formerly Form 16) and Form 168 (formerly Form 26AS/AIS).
• Detailed tax calculation under the default New Tax Regime.
• Step-by-step walkthrough of online return filing on the official portal.

What This Article Does Not Cover

• Complex corporate tax returns or business income disclosures.
• Detailed investment advisory or custom equity portfolio management.
• Resolution of technical backend issues on the income tax website.

Legal Reference Block

Relevant Sections of the Income Tax Act 2025:

• Section 16(ia): Grants a flat standard deduction of ₹75,000 to salaried employees and pensioners under the New Tax Regime (₹50,000 under the Old Tax Regime).
• Section 87A: Provides a tax rebate of up to ₹60,000 for net taxable income up to ₹12,00,000 under the New Tax Regime, making income up to ₹12.75 lakh effectively tax-free for salaried taxpayers.
• Section 139(1): Mandates return submission on or before July 31, 2026, for individuals with taxable income exceeding the basic exemption limit.

Selecting the Correct ITR Form

Choosing the right ITR form is essential. Filing on the incorrect form will cause your return to be declared defective under Section 139(9).

1. ITR-1 (SAHAJ): Suitable if your total income is up to ₹50 Lakh, and your income source is limited to:
   • Salary or Pension.
   • One House Property.
   • Other sources (Interest from bank deposits, family pension, dividends).
2. ITR-2: Necessary if your income exceeds ₹50 Lakh, or if you have:
   • Capital gains from selling shares, mutual funds, or real estate.
   • Income from more than one house property.
   • Foreign assets or foreign source income.
   • Status of a Non-Resident (NRI) or Resident but Not Ordinarily Resident (RNOR).

The Renamed Compliance Documents

Under the unified tax administration rules, several common forms have been renumbered. Ensure you reconcile your details using the correct documents:

• Form 130 (formerly Form 16): Your employer-issued TDS certificate.
• Form 168 (formerly Form 26AS/AIS): Your comprehensive tax passbook that lists all TDS, TCS, and high-value transactions reported under the Statement of Financial Transactions.

Step-by-Step E-Filing Walkthrough for Salaried Taxpayers

Step 1: Pre-Filing Reconciliation

Download your Form 130 from your employer and your Form 168 (AIS) from the e-filing portal. Compare the salary amounts and TDS deducted in both documents. If there is a mismatch, ask your employer to correct their TDS filings immediately.

Step 2: Access the Portal

Log in to the official income tax portal (incometax.gov.in) using your PAN as User ID. Navigate to e-File > Income Tax Returns > File Income Tax Return.

Step 3: Select Assessment Year and Mode

Choose Assessment Year 2026-27 and select the Online filing mode. Click "Start New Filing" and select your status as "Individual".

Step 4: Choose Your Tax Regime

The New Tax Regime is the default. If you wish to switch to the Old Tax Regime, you must explicitly opt out of the default regime. Reconcile which regime is beneficial by checking standard deduction allowances.

Step 5: Verify Pre-filled Income Details

The portal will pre-populate salary details from your Form 130. Confirm that standard deductions under Section 16(ia) are applied (₹75,000 for New Regime). Verify other income heads such as interest from savings accounts.

Step 6: Review Tax Paid and Submit

Verify that all TDS credits are populated correctly from your Form 168. If there is a balance tax payable, pay it online via e-pay Tax. Submit the return and proceed to e-verification.

Step 7: Complete E-Verification

You must e-verify your return within 30 days of submission. Use Aadhaar OTP or net banking. Returns that are not e-verified are treated as invalid by the department.

Common Mistakes to Avoid

• Ignoring Form Mismatch: Filing without matching data against Form 168 (AIS) will trigger automated tax demand notices under Section 143(1).
• Forgetting E-Verification: Many taxpayers assume that clicking "Submit" is the final step. Non-verification within 30 days will invalidate your filing.
• Wrong Form Selection: Filing under ITR-1 when you hold equity shares or capital gains will result in a defective return warning.

Conclusion

Completing your ITR filing for AY 2026-27 (FY 2025-26) early protects you from late-filing fees and ensures swift processing of tax refunds. By validating your salary figures against Form 130 and Form 168, and e-verifying on time, you can secure total tax compliance.