ITR Filing for Salaried Employees

If your only income is salary, one house property and some interest, and total income is within ₹50 lakh, you file ITR-1. Capital gains from shares or mutual funds, more than one house property, foreign assets, or being a company director all push you into ITR-2.

The return is due by 31 July following the end of the financial year. Filing late costs a fee under section 234F and, more importantly, forfeits the ability to carry forward certain losses.

The substantive work is not data entry. It is choosing the correct regime, reconciling what the department already knows about you through Form 26AS and the Annual Information Statement, and making sure the deductions you are entitled to are actually claimed.

The new regime is now the default

Unless you actively opt out, the new regime applies. For assessment year 2026-27 it carries a standard deduction of ₹75,000 and a rebate under section 87A that leaves income up to ₹12 lakh with no tax — effectively ₹12.75 lakh for a salaried person once the standard deduction is applied.

The old regime remains better for people with substantial housing loan interest, HRA in a metro, and a full ₹1.5 lakh of 80C. The only reliable way to know is to compute both, which we do as standard rather than as an upgrade.

Salaried taxpayers can switch every year

If you have no business income, you may choose your regime afresh each year at the time of filing, regardless of what you told your employer in April. Someone who bought a house in November is not stuck with the regime their payroll assumed.

The AIS knows more than your Form 16

Savings interest, fixed deposit interest, dividends, mutual fund redemptions, share transactions, credit card spending above thresholds and property registrations all appear in the Annual Information Statement. Omitting any of them produces a mismatch, and mismatches are now handled by automated systems that issue notices without human judgement.

Two employers, two exemptions

Each employer applies the basic exemption and deductions independently. Someone who changed jobs mid-year has usually had too little tax deducted overall, and discovers a balance payable at filing. Declaring previous employment income to the new employer in Form 12B prevents the surprise.

Filing is not complete until you verify

An unverified return is treated as never filed. E-verification through Aadhaar OTP takes a minute and must be done within thirty days. Returns lost to non-verification are entirely avoidable and surprisingly common.

Returns are filed on the income-tax e-filing portal, and TDS credits can be verified on TRACES.

An intimation under section 143(1) usually follows within weeks. It either confirms your computation, grants a refund, or raises a demand. Read it — a demand often arises from a TDS credit the department could not match rather than genuine tax owed, and it is rectifiable.

If you notice an error after filing, a revised return can be filed before the end of the relevant assessment year. Revising is far better than waiting for a notice.

Keep proofs for at least six years. Deductions claimed under the old regime are the ones most likely to be examined, and reconstructing rent receipts or donation certificates years later is difficult.