Key Takeaways
- ITR filing for salaried employees for AY 2026-27 (FY 2025-26) must be completed on or before July 31, 2026 to avoid late fees under Section 234F.
- Under the Default New Tax Regime, salaried individuals benefit from a standard deduction of ₹75,000. Paired with the Section 87A rebate (up to ₹12 lakh taxable income), net salary up to ₹12.75 lakh is effectively tax-free.
- Salaried individuals earning up to ₹50 lakh from salary, one house property, and other basic sources file ITR-1 (Sahaj). If capital gains, foreign assets, or directorships are involved, ITR-2 is required.
- Form 16 alone is not sufficient; cross-verifying income against your Annual Information Statement (AIS) and Form 26AS is mandatory to prevent Section 143(1) automated mismatch notices.
- If you miss the July 31 deadline, a belated return can be filed up to December 31, 2026 with a late filing fee of up to ₹5,000.
What is ITR filing for salaried employees? ITR filing for salaried employees is the annual statutory process of declaring salary income, allowances, perks, tax-saving deductions, and other income sources to the Income Tax Department using pre-filled forms (ITR-1 or ITR-2). It reconciles tax deducted at source (TDS) by employers against your total annual tax liability.
For salaried taxpayers in India, income tax return filing has shifted from manual entry to automated, pre-filled verification. However, choosing between tax regimes, picking the wrong form, or failing to reconcile broker statements with government records can lead to tax demands or delayed refunds. Understanding how Tax Garden's filing process works ensures a smooth return filing experience with maximum tax efficiency.
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Which ITR Form Should Salaried Employees Use for AY 2026-27?
Choosing the correct ITR form depends on your income channels, overall turnover, and financial holdings. Selecting the wrong form invalidates your return under Section 139(9).
Comparison
ITR-1 (Sahaj) vs ITR-2 for Salaried Individuals
Select the correct form based on your income sources for Assessment Year 2026-27
| Parameter | ITR-1 (Sahaj) | ITR-2 |
|---|---|---|
| Gross Income Limit | Up to ₹50 Lakhs | No income limit |
| Salary / Pension | Single or multiple employers | Single or multiple employers |
| House Property | Income from only ONE house property | Income/Loss from multiple house properties |
| Capital Gains | Limited LTCG u/s 112A up to ₹1.25 Lakh (No losses carried forward) | All Short-Term & Long-Term Capital Gains (Stocks, Mutual Funds, Real Estate) |
| Foreign Assets / Income | Not allowed | Mandatory if holding foreign shares (RSUs/ESOPs) or bank accounts |
| Company Directorship | Not allowed | Mandatory if holding directorship in any company or unlisted equity shares |
Takeaway: Use ITR-1 if you earn purely salary, savings interest, and have simple finances below ₹50 Lakh. Switch to ITR-2 if you traded stocks, sold property, or hold US equity RSUs.
Source: Income Tax Department Guidelines for AY 2026-27; Section 139 of Income Tax Act 1961
Old vs. New Tax Regime: Which Is Better for Salaried Taxpayers?
For FY 2025-26 (AY 2026-27), the New Tax Regime remains the default choice. Salaried employees retain the right to switch back to the Old Tax Regime every year at the time of filing.
Tax Slabs under the New Tax Regime (Default)
- Up to ₹4,00,000: Nil
- ₹4,00,001 to ₹8,00,000: 5%
- ₹8,00,001 to ₹12,00,000: 10%
- ₹12,00,001 to ₹16,00,000: 15%
- ₹16,00,001 to ₹20,00,000: 20%
- ₹20,00,001 to ₹24,00,000: 25%
- Above ₹24,00,000: 30%
Key Advantage: A Standard Deduction of ₹75,000 is available for salaried employees under the New Regime. Combined with the Section 87A rebate (which waives tax up to ₹12 lakh taxable income), salaried individuals earning up to ₹12.75 lakh pay zero income tax.
When Should Salaried Employees Choose the Old Tax Regime?
The Old Tax Regime is advantageous only if your total itemized deductions exceed ₹3.75 lakh to ₹4 lakh. Key deductions under the Old Regime include:
- Standard Deduction: ₹50,000
- Section 80C: Up to ₹1,50,000 (EPF, PPF, ELSS, Life Insurance)
- House Rent Allowance (HRA): Exempt under Section 10(13A)
- Section 80D: Up to ₹25,000 to ₹1,00,000 (Health Insurance for self & senior citizen parents)
- Section 24(b): Up to ₹2,00,000 (Home loan interest for self-occupied property)
Key Documents Required for ITR Filing
Before initiating your return on the portal, assemble the following documents:
- Form 16: Issued by your employer detailing Part A (TDS deposited) and Part B (salary breakup and exemptions).
- Annual Information Statement (AIS) & Form 26AS: Downloaded directly from the e-filing portal to check bank interest, dividends, and stock market transactions.
- Interest Certificates: From banks and post offices for savings accounts and fixed deposits.
- Capital Gains Statements: Generated from stock brokers (Zerodha, Groww, Upstox) or mutual fund RTAs (CAMS/KFintech).
- Rent Receipts & Landlord PAN: If claiming HRA exemptions under the Old Tax Regime.
Step-by-Step Procedure for Filing Salaried ITR
- Log in to the Portal: Access
incometax.gov.in/iec/foportal/using your PAN/Aadhaar and password. - Navigate to ITR Filing: Go to e-File > Income Tax Returns > File Income Tax Return and select AY 2026-27.
- Select Mode & Form: Choose Online Mode, select your filing status as Individual, and select the applicable form (ITR-1 or ITR-2).
- Validate Pre-Filled Data: The portal automatically imports salary and TDS details from your Form 16 and AIS. Cross-verify these against your actual records.
- Confirm Exemptions & Deductions: Ensure your standard deduction (₹75,000 under New Regime or ₹50,000 under Old Regime) is correctly applied.
- Pay Outstanding Tax or Claim Refund: Review the final calculation. If tax is due, pay via Net Banking/UPI under Self-Assessment Tax (Challan 280).
- E-Verify Return: Submit the return and immediately e-verify using Aadhaar OTP, net banking, or EVC. Unverified returns are treated as invalid after 30 days.
Common Errors to Avoid During ITR Filing
Ignoring Savings Bank Interest: Many salaried employees assume savings bank interest is non-taxable. You must report it under Income from Other Sources. (Under the Old Regime, up to ₹10,000 is exempt under Section 80TTA).
Failing to Report Previous Employer Income: If you switched jobs during FY 2025-26, both employers may have given you basic exemptions and standard deductions independently. You must combine Income from both Form 16s to prevent tax shortfalls.
Relying Solely on Form 16: Form 16 does not reflect secondary income like stock dividends, crypto gains, or property sales. Always cross-check against AIS/TIS.
Check our pricing page for transparent, fixed-fee tax filing assistance tailored for multi-Form 16 or high-net-worth salaried professionals.
If you have complex stock option schemes (RSUs/ESOPs) or job switches, our support team can assist you with complete tax planning.
Frequently Asked Questions
What is the last date for salaried employees to file ITR for AY 2026-27?
The due date for salaried employees filing ITR-1 or ITR-2 for AY 2026-27 (FY 2025-26) is July 31, 2026. Filing after July 31 attracts late fees under Section 234F up to ₹5,000 and penal interest under Section 234A.
Is standard deduction available for salaried employees in the New Tax Regime?
Yes. The standard deduction for salaried taxpayers and pensioners under the default New Tax Regime is ₹75,000 for AY 2026-27. Under the Old Tax Regime, the standard deduction remains ₹50,000.
Can I file ITR if my employer did not issue Form 16?
Yes, you can file your return without Form 16. You can calculate your gross salary using monthly payslips and compute tax deducted using your Form 26AS, AIS, and bank statements.
Do I need to file ITR if my salary is below ₹12.75 lakh?
Yes. Although net income up to ₹12.75 lakh attracts zero tax under the New Regime due to Section 87A rebate and standard deduction, you must still file ITR if your gross total income exceeds the basic exemption limit of ₹4,00,000.
Sources: Income Tax Department e-Filing Portal (incometax.gov.in), Section 115BAC and Section 139 of the Income Tax Act 1961, Finance Act 2025/2026 statutory updates.
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Frequently Asked Questions: Tax Services in Kondapur & Hyderabad
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