How to file ITR for salaried employees FY 2025-26 (AY 2026-27): a step-by-step guide

For informational purposes only. Ek Crore does not recommend specific tax strategies or financial decisions. Tax rules change frequently — verify current rules at incometax.gov.in before acting. Consult a practising CA for advice tailored to your situation.

The Income Tax Department opened ITR filing for FY 2025-26 (Assessment Year 2026-27) in May 2026. The deadline for salaried employees is 31 July 2026. If you have salary income, FD interest, or rental income — and your employer has already given you Form 16 (or will by 15 June) — you can file your return yourself in under an hour.

This guide walks you through every step: which form to pick, what documents to collect, how to reconcile your AIS, and how to e-verify at the end.

Which ITR form should a salaried employee file for AY 2026-27?

Most salaried employees file either ITR-1 (Sahaj) or ITR-2. Here is how to decide.

File ITR-1 if all of the following apply to you:

• Your income comes from salary or pension
• You have income from up to two house properties
• Your other income is interest, dividends, or other sources (no business income)
• You have no capital gains, OR your long-term capital gains under Section 112A do not exceed ₹1.25 lakh
• Your total income for the year does not exceed ₹50 lakh

File ITR-2 if any of the following apply:

• You have more than two house properties
• You have capital gains above ₹1.25 lakh (from shares or mutual fund units)
• You have foreign assets or foreign income
• You are a director in a company

◇ Quick check: If you are a salaried employee with FD interest, one or two properties, and mutual fund LTCG under ₹1.25 lakh — you almost certainly file ITR-1. That covers the majority of readers at this income level.

Source: Salaried Individuals for AY 2026-27, Income Tax Department

What is new for AY 2026-27 that salaried filers need to know

Two changes affect the 2025-26 return specifically:

1. ITR-1 now covers two house properties. Until AY 2025-26, owning more than one property forced you to use ITR-2. From AY 2026-27, ITR-1 accepts income from up to two house properties. If you own your home and one other flat (self-occupied, let-out, or vacant), you can now stay on the simpler form.

2. The portal has two tabs — use the right one. The e-filing portal now shows two filing tabs: one for the Income Tax Act 1961 and one for the Income Tax Act 2025. For your FY 2025-26 return, use the tab labeled "Income Tax Act 1961 / AY 2026-27." The Act 2025 tab is for returns filed from July 2027 onwards. Clicking the wrong tab leads you to the wrong year's form.

Documents to collect before you open the portal

Gather these before you start. The portal times out if you leave it idle too long.

Source: Annual Information Statement (AIS), Income Tax Department

How to reconcile your AIS with Form 16 before filing

This step saves you from a notice later. The AIS shows every rupee of income the government received information about — from your employer, from banks, from brokers. Your return must match this, or you must provide feedback explaining why it does not.

Step 1: Log in to incometax.gov.in and go to Services → Annual Information Statement (AIS). Download the PDF (password: your PAN in lowercase + date of birth in DDMMYYYY format, no spaces).

Step 2: Check your salary figure in AIS against Part A of your Form 16. They should match. A small difference can occur if your employer filed a revised TDS return — note the difference.

Step 3: Check FD interest in AIS. Banks report FD interest to the IT Department even if TDS was not deducted (interest below ₹40,000 for non-senior-citizens has no TDS, but it is still reportable income). If AIS shows ₹60,000 FD interest and your Form 16 shows nothing, you must add ₹60,000 as income from other sources in your ITR.

Step 4: Check dividend income. Dividends from mutual funds and shares are taxable income and appear in AIS. Include them in your return.

Step 5: If any figure in AIS is wrong, submit feedback directly in the AIS portal (there is a feedback button next to each entry). This does not delay your filing — you can file your return with the correct figures and explain the discrepancy there.

⚠ Common mistake: Many filers ignore AIS and rely only on Form 16. If your bank paid FD interest without deducting TDS, that income does not appear on Form 16. But it appears in AIS. Leaving it out of your ITR can trigger a mismatch notice under Section 143(1)(a).

Step-by-step: how to file ITR-1 online

Step 1: Log in. Go to incometax.gov.in and log in with your PAN and password. If you have not registered before, create an account using your PAN.

Step 2: Start filing. Go to e-File → Income Tax Returns → File Income Tax Return. Select Assessment Year 2026-27 and the online mode.

Step 3: Select the correct tab. On the next screen, select "Income Tax Act 1961" (not the Act 2025 tab). Select ITR-1.

Step 4: Review pre-filled data. The portal pre-fills your salary, TDS, and some income details from Form 26AS and AIS. Go through each section. Do not accept pre-filled data blindly — verify it against your Form 16.

Step 5: Enter additional income. If you have FD interest, savings account interest, or rental income not captured in the pre-fill, add it in the "Other sources" and "House property" sections respectively.

Step 6: Enter deductions. Under the new tax regime (the default), most deductions are not available. You can still claim the standard deduction of ₹75,000 (it applies automatically). If you are using the old regime, enter your 80C, 80D, HRA, and other deductions here.

Step 7: Review the tax computation. The portal calculates your tax automatically. Compare it to the TDS already deducted (from Form 16 and Form 26AS). If you have paid advance tax, enter the challan details.

Step 8: If tax is due, pay it now. Any remaining tax liability must be paid as self-assessment tax via Challan 280 (Code 300) before you submit. The portal will prompt you.

Step 9: Submit. Review the full return once, then click Submit.

Step 10: e-Verify within 30 days. This is the step many people miss. Submitting your ITR is not the same as filing it. You must e-verify it within 30 days of submission, or your filing is treated as null. Verify using your Aadhaar OTP (fastest) or your net banking EVC.

Worked example: Priya's ITR-1 filing

Priya earns ₹12L gross salary. Her employer deducted TDS of ₹45,000 over the year and gave her Form 16 in June. She also has:

• Savings account interest: ₹8,000 (no TDS, below ₹10,000 threshold)
• FD interest: ₹25,000 (bank deducted ₹2,500 TDS at 10%)

What Priya adds in ITR-1:

• Salary: pre-filled from Form 16, ₹12L. Standard deduction of ₹75,000 is applied automatically, net taxable salary = ₹11.25L
• Other sources: ₹8,000 (savings interest) + ₹25,000 (FD interest) = ₹33,000
• Gross total income: ₹11,58,000

Tax under new regime:

TDS already deducted: ₹45,000 (employer) + ₹2,500 (bank) = ₹47,500

Self-assessment tax due: ₹58,032 – ₹47,500 = ₹10,532

Priya pays ₹10,532 via Challan 280 before submitting, then submits and e-verifies using Aadhaar OTP. Done.

Note: All figures are illustrations. Your actual tax depends on your specific deductions, regime choice, and other income. Run the computation on the portal before assuming a number.

What happens if you miss the July 31 deadline?

Missing the deadline has three consequences:

Section 234F late filing fee: ₹5,000 if your income exceeds ₹5 lakh; ₹1,000 if it is ₹5 lakh or below. This applies to belated returns filed between 1 August and 31 December 2026. If your total income is below the basic exemption limit (₹4 lakh under the new regime), Section 234F does not apply.

Section 234A interest: If you had tax due and did not pay it by 31 July, you pay 1% simple interest per month on the unpaid amount from August onwards until you pay.

Loss of carry-forward: If you realised capital losses in FY 2025-26, you lose the right to carry them forward to offset future capital gains. Capital losses can only be carried forward if you file by the original deadline.

The belated return window closes on 31 December 2026. After that, you cannot file for FY 2025-26 at all (except via a revised return if the tax department issues a notice).

Source: ITR Filing Last Date FY 2025-26, ClearTax

Bottom line

• File ITR-1 if your income is salary, interest, rent from up to two properties, and LTCG u/s 112A under ₹1.25 lakh; file ITR-2 for everything else
• The July 31, 2026 deadline is firm — missing it costs ₹5,000 plus interest on any unpaid tax
• Download your AIS before starting; FD interest appears there even if your bank did not deduct TDS
• The portal now has two tabs — select "Income Tax Act 1961 / AY 2026-27," not the Act 2025 tab
• e-Verify within 30 days of submitting — without this step, your ITR is invalid

Frequently asked questions

Q: My employer deducts TDS and my only other income is ₹20,000 FD interest. Do I need to file an ITR?

A: Yes, if your total income exceeds the basic exemption limit. Under the new regime, the limit is ₹4 lakh. Under the old regime, it is ₹2.5 lakh (₹3 lakh for those aged 60+). Even if you have no additional tax to pay, filing your return is advisable because it creates a tax record, enables faster refunds, and is required for many financial applications including visa processing and large loans.

Q: What if my Form 16 has the wrong PAN or wrong amount?

A: Ask your employer's HR or payroll team to issue a revised Form 16. Do not file a return with known errors in Form 16 — the TDS credit on your PAN may not match, causing a mismatch during processing. The employer has until 15 June to issue Form 16; if corrections are needed, request them before that date.

Q: I switched jobs during FY 2025-26. How do I handle two Form 16s?

A: Combine the income from both Form 16s and enter the total salary in ITR-1. The second employer may not have accounted for the salary from the first job when deducting TDS, so you may find that combined income puts you in a higher slab and you owe additional tax. Enter both TDS amounts separately, and pay any shortfall as self-assessment tax.

Q: Can I switch from old to new tax regime when filing my ITR?

A: Salaried employees without business income can switch regimes each year at the time of filing. If your employer deducted TDS assuming the old regime but you want to file under the new regime (or vice versa), select the preferred regime on the ITR form. The portal will recompute your tax and show the difference.

Q: What is the difference between filing and e-verifying? Do I need to do both?

A: Yes, both are required. Submitting the ITR uploads your data to the portal. E-verification confirms your identity and completes the process. An ITR that is submitted but not e-verified within 30 days is treated as not filed — the submission date does not protect you from late-filing fees. Use Aadhaar OTP for instant verification; it takes under two minutes.

Q: I forgot to claim an 80C deduction when I filed. Can I fix it?

A: Yes. You can file a revised return any time before 31 December 2026. Log in to the portal, go to e-File → Income Tax Returns → File Income Tax Return, select the option to revise your return, and enter the acknowledgement number of your original filing. You can revise your return multiple times before the deadline.

Sources: Salaried Individuals for AY 2026-27, Income Tax Department · AIS FAQ, Income Tax Department · ITR-1 AY 2026-27, ClearTax · ITR Filing Last Date FY 2025-26, ClearTax

Last verified: May 2026, FY 2025-26 (AY 2026-27). Tax rules change — confirm current rules at incometax.gov.in before acting.