Who Should File ITR for FY 2025-26 (AY 2026-27)
- CA Pratik Bharda
- 2 days ago
- 11 min read
Who should file ITR for the financial year 2025-26 and assessment year 2026-27 is an important question for Indian taxpayers. An Income Tax Return (ITR) is used to report your income, tax liability, deductions, and taxes paid to the Income Tax Department, making it an essential part of tax compliance.
A taxpayer must file an ITR if their taxable income is more than the basic exemption limit. However, filing may also be mandatory in several specified situations even when income is below this threshold. Failing to recognise these requirements can result in non-compliance, late filing consequences, or the loss of certain tax benefits.
Filing an ITR offers several advantages. It allows taxpayers to claim eligible tax refunds, carry forward certain losses, and maintain proof of income that may be required for loan applications, visa processing, and other financial transactions.
Let’s understand who must file an ITR for AY 2026-27, the applicable filing conditions, exemption limits, and the situations in which filing is mandatory even if your income is below the basic exemption limit.
Table of Contents
Meaning of ITR Filing
Filing an ITR means reporting income to the Income Tax Department by way of filling forms called tax returns. These forms include information related to income earned, deductions claimed, and taxes paid. Filing these returns is a legal requirement for individuals, businesses, and other entities that fall under India’s income tax rules.
ITR Filing Eligibility for FY 2025-26
For individuals and entities that meet certain income or transaction-based conditions during FY 2025-26, ITR filing is mandatory. When it isn’t mandatory, you may choose to do so for several reasons: to claim refunds due to you, to carry forward eligible losses, or maintain proof of income.
Tax Filing Eligibility Based on Income Limit
Individuals need to file an ITR if their total taxable income exceeds the applicable basic exemption limit, as shown below:
Category | Basic Exemption Limit - Old Tax Regime |
Below 60 Years | ₹2.5 lakh |
60 Years or More but Below 80 Years | ₹3 lakh |
80 Years and Above | ₹5 lakh |
Category | Basic Exemption Limit - New Tax Regime |
All age groups | ₹4 lakh |
Mandatory ITR Filing Even if Income Is Below the Exemption Limit
ITR filing is important and mandatory if a taxpayer meets any of the following conditions:
Deposited ₹1 crore or more in one or more current bank accounts during the financial year.
Spent more than ₹2 lakh on foreign travel for self or any other person.
Deposited more than ₹50 lakh in savings bank accounts.
Incurred electricity expenses exceeding ₹1 lakh during the year.
Aggregate TDS/TCS is ₹25,000 or more during the financial year (₹50,000 or more for senior citizens).
Business turnover exceeds ₹60 lakh.
Professional receipts exceed ₹10 lakh.
Own assets outside India, including foreign shares, bank accounts, financial interests in entities overseas, have signing authority in foreign accounts or are a beneficiary of a foreign asset.
Categories of Taxpayers Required to File ITR
The following categories of taxpayers are generally required to file an Income Tax Return for FY 2025–26 (AY 2026–27):
Who All Should File ITR:
Salaried individuals earning income, particularly those whose total income exceeds the applicable basic exemption limit.
Individuals or HUFs whose total taxable income exceeds the basic exemption limit under the applicable tax regime.
Businesses and firms, including companies, LLPs, partnership firms, and other business entities, irrespective of profit or loss.
Self-employed professionals, such as freelancers, consultants, doctors, lawyers, and other professionals earning taxable income.
Non-Resident Indians (NRIs) earning taxable income in India.
Foreign companies required to file an Income Tax Return under the applicable provisions of the Income-tax Act.
Charitable trusts, political parties, Association of Persons and Body of Individuals are required to file returns under the applicable provisions of the Income-tax Act
Who Is Not Required to File an ITR?
Certain taxpayers may be exempt from filing an Income Tax Return based on their income level, age, or source of income. So if you’re wondering is it compulsory to file ITR, no, it is not mandatory for all. For example:
Individuals Earning Below the Taxable Limit
Those whose total income is below the basic exemption limit may not be required to file an ITR, provided they do not meet any of the specified conditions that make filing mandatory.
Tax Regime | Basic Exemption Limit |
Old Tax Regime | ₹2.5 lakh |
New Tax Regime | ₹4 lakh |
Individuals Earning Only Agricultural Income
Individuals whose only income is exempt agricultural income are generally not required to file an ITR, subject to the applicable filing provisions. However, filing requirements may apply if agricultural income exceeds specified limits or is combined with other sources of income.
Certain Non-Resident Indians (NRIs)
Certain NRIs may not be required to file an ITR where the Income-tax Act specifically exempts them from filing and tax has been deducted at source on the eligible income.
Senior Citizens Above 75 Years
Certain resident senior citizens aged 75 years or above may be exempt from filing an ITR if they satisfy the conditions prescribed under Section 194P, including having only pension and interest income from specified scheduled banks.
NRI Tax Return Filing
Non-Resident Indians (NRIs) have to file an ITR in India if their total taxable income exceeds the applicable basic exemption limit during FY 2025-26 (AY 2026-27).
The exemption limits are as follows:
Old tax regime: ₹2.5 lakh
New tax regime: ₹4 lakh
In contrast to resident taxpayers, NRIs are not eligible for increased exemption limits based on their age. The standard exemption limit remains the same for all NRIs, including senior citizens and super senior citizens.
NRIs should also be aware of the following:
The availability of the basic exemption limit against capital gains depends on the applicable provisions of the Income-tax Act. NRIs should review the relevant rules based on the nature of the capital gains earned.
Depending on the nature of the income and the applicable provisions, an NRI may still be required to file an ITR even where the tax liability appears limited.
Filing an ITR is necessary for claiming tax refunds, reporting income earned in India, and complying with tax regulations.
Why Filing an Income Tax Return Is Important
Filing an Income Tax Return is not only a legal requirement for eligible taxpayers but also offers several financial benefits.
Claim Tax Refunds: An ITR is required to claim a refund of excess tax paid during the financial year.
Carry Forward Losses: Filing the return within the due date allows taxpayers to carry forward eligible business and capital losses to future years.
Support Loan Applications: Banks and financial institutions often ask for ITRs as proof of income while processing loan applications.
Support Visa Applications: ITRs may be required as proof of income or financial standing during certain visa application processes.
Serve as Income Proof: ITRs act as a reliable record of income and can be used for various financial and official purposes.
Avoid Penalties and Interest: Timely filing can help taxpayers avoid applicable late filing fees, interest on unpaid tax, and other compliance-related consequences.
When to File an ITR?
The due date for filing an Income Tax Return depends on the type of taxpayer and the nature of income. Taxpayers should file their returns within the prescribed timeline to avoid late fees, interest, and other compliance issues.
The due dates for FY 2025-26 (AY 2026-27) are as follows:
Category of Taxpayer | ITR filing Date |
ITR-1 and ITR-2 (Salary and Capital Gains Income) | 31 July 2026 |
ITR-3 and ITR-4 (Business Income - Non-Audit Cases) | 31 August 2026 |
ITR-3 and ITR-4 (Cases Requiring Audit) | 31 October 2026 |
Businesses Requiring Transfer Pricing Reports | 30 November 2026 |
Belated Return | 31 December 2026 |
Revised Return | 31 March 2027 |
Updated Return (ITR-U) | 31 March 2031 |
Note: These dates are applicable unless extended by the Income Tax Department.
What Happens If you do not file ITR by the Due Date
Missing the ITR filing deadline does not mean you cannot file your return. Taxpayers can still submit a belated return or, in certain cases, an updated return. Here are the details:
Particulars | Belated Return | Updated Return (ITR-U) |
Applicable For | Taxpayers who missed the original due date | Taxpayers who missed both the original and the belated return deadlines |
Due Date for FY 2025-26 (AY 2026-27) | 31 December 2026 | 31 March 2031 |
However, filing an ITR after the due date can result in the following consequences:
Interest on Tax Due: Interest at 1% per month or part thereof may be charged on unpaid taxes under Section 234A.
Late Filing Fee: A fee of up to ₹5,000 may be levied under Section 234F. For taxpayers with total income up to ₹5 lakh, the fee is limited to ₹1,000.
Loss of Carry Forward Benefit: Certain business and capital losses cannot be carried forward to future years if the return is not filed within the prescribed due date.
Impact on Financial Profile: Delayed filing may create practical difficulties during loan applications, credit assessments, or visa processes, as ITRs are often required as proof of income and financial records.
Categories of ITR Forms
The Income Tax Department offers different forms based on a taxpayer's income and source of earnings.
ITR-1 (Sahaj): For salaried individuals and pensioners with income up to ₹50 lakh from sources including one house property, family pension income, long-term capital gains up to ₹1.25 lakh agricultural income up to ₹5000, and more .
ITR-2: For individuals and HUFs with income from salary, pension, virtual digital assets, capital gains, multiple house properties, foreign assets, or agricultural income, but no business income.
ITR-3: For individuals and HUFs earning income from a business or profession and not eligible to file ITR-1, ITR-2 or ITR-4.
ITR-4 (Sugam): For eligible individuals, firms (other than LLPs), and HUFs opting for the presumptive taxation scheme with income up to ₹50 lakh, long-term capital gains up to ₹1.25 lakh and under the applicable provisions of the Income-tax Act.
Major Updates in ITR Forms for AY 2026–27
The Income Tax Department has introduced several changes to ITR forms for AY 2026-27 (FY 2025-26) to simplify tax filing and improve reporting requirements. Some of the important updates are below:
ITR-1 and ITR-4 Eligibility Expanded: Eligible taxpayers can now file ITR-1 or ITR-4 even if they have income from up to two house properties or long-term capital gains under Section 112A of up to ₹1.25 lakh, subject to the prescribed conditions.
New Field for Unrealised Rent: A separate field has been added to report rent that could not be recovered from tenants.
Representative Assessee Reporting: All ITR forms now include a field to indicate whether the return is being filed by a representative assessee.
Section 89A Relief Removed from ITR-1 and ITR-4: Taxpayers claiming relief for foreign retirement accounts must now use the applicable ITR forms other than ITR-1 and ITR-4.
Capital Gains Reporting Updated: The capital gains schedules have been revised to align with the post-Budget 2024 tax regime, including removal of obsolete STCG/LTCG rate fields and updated reporting requirements.
New Tax Regime Disclosure Updated: The forms now require additional disclosures for taxpayers opting in or out of the new tax regime, particularly for those with business income.
ITR-2 Clubbing Income Schedule Expanded: Taxpayers reporting clubbed income must now provide additional details about the nature of the income and the applicable provision. This is specific to ITR-2.
Section 24(b) Loan Details: The house property schedule now seeks additional information relating to housing loans claimed under Section 24(b), such as lender details, loan account number and sanction date.
More Details for Donation Deductions: Taxpayers claiming deductions under Sections 80G and 80GGC may need to provide additional details, such as transaction reference numbers, bank details, and information about political parties.
Conclusion
Now that you know who needs to file ITR and when to file ITR, also know the answer to why income tax return filing is important. We file income tax returns to fund the central and state governments’ budget which is used to build roads, railways and other public infrastructure, and towards national defense, public healthcare and education.
Apart from being a legal requirement, filing an ITR helps maintain a clear record of your income and taxes paid. It can also be useful when applying for loans, claiming tax refunds, and more. To get a quick idea of your tax obligations, use the Income Tax Calculator on the official website without even logging into the e-Filing portal. This is a convenient way for you to compare your overall tax amount as per the new and old regime and make an informed choice.
FAQs
Q1. What are the benefits of filing an Income Tax Return?
Filing an ITR offers several benefits beyond tax compliance. It helps maintain a financial record and can be useful for various financial and official purposes. Some of the key benefits of filing an ITR include:
- Excess tax paid during the financial year can be claimed as a refund through an ITR.
- Loan applications often require ITRs as proof of income and financial stability.
- An ITR serves as a widely accepted document for verifying income.
- Many countries ask for ITRs while processing visa applications.
- Eligible business and capital losses can be carried forward to future years if the return is filed within the due date.
Q2. How does section 54F work in income tax?
To claim an exemption under Section 54F, the net consideration received from the transfer of a long-term capital asset (other than a residential house) must be invested in a residential house within the prescribed time limits, subject to the applicable conditions. Doing so can help reduce or eliminate the long-term capital gains tax liability.
Q3. What if there are errors in filing?
Mistakes in a filed ITR can be corrected by filing a revised or updated return:
- Revised Return
A revised return can be filed to correct errors in the original return. It can generally be filed up to 31 December of the relevant assessment year, or before the assessment is completed, whichever is earlier.
- Updated Return (ITR-U)
If the revised return deadline is missed, an updated return can be filed within 48 months from the end of the relevant assessment year.
Q4. What is an income tax audit?
A tax audit is a review of a taxpayer’s financial records and accounts to ensure they comply with the provisions of the Income Tax Act, 1961. It is required only for specified taxpayers and must be carried out by a Chartered Accountant (CA).
Q5. Is the ITR filing process open for FY 2025–26?
Yes, the Income Tax Department has opened the ITR filing window for FY 2025-26 (AY 2026-27). Eligible taxpayers can file their returns using the ITR forms currently made available by the Income Tax Department.
Q6. Is it mandatory to file an Income Tax Return below ₹5 lakhs?
While ITR filing is generally not mandatory if your total income is below the applicable basic exemption limit, filing may still be compulsory in certain specified cases, such as prescribed high-value transactions or other conditions under the Income-tax Act.
Q7. Can I file an ITR without Form 16?
Yes. If you do not have Form 16, you can still file your ITR by using your salary slips, Form 26AS, Annual Information Statement (AIS), bank statements, and other relevant income and deduction documents. Ensure that all income and taxes deducted are reported accurately.
Q8. Can I revise my ITR after submitting it?
Yes. If you discover an error after filing your return, you can file a revised return within the prescribed time limit or before the assessment is completed, whichever is earlier. This allows you to correct omissions or incorrect information in the original return.
Q9. Which documents should I keep after filing my ITR?
Taxpayers should retain a copy of the filed ITR, the ITR-V acknowledgement (if applicable), Form 16, Form 26AS, AIS, bank statements, investment proofs, and other supporting documents. These records may be required during assessment or for future financial transactions.
Q10. How can I check the status of my ITR after filing?
You can track the status of your return by logging into the Income Tax e-Filing portal and navigating to the relevant return status section. The portal displays updates such as whether the return has been successfully filed, verified, processed, or if any further action is required.
