Income Tax Filing

Income Tax Filing in India FY 2025-2026: Step-by-Step Guide for Salaried and Business Professionals

Introduction

Income tax filing in India is a crucial financial obligation for salaried employees and business professionals. Understanding the process, forms, deadlines, and e-filing procedures can ensure
compliance with tax regulations while optimizing tax savings. This guide provides a detailed step-by- step approach to filing an income tax return (ITR) for the financial year (FY) 2025-2026, covering different aspects such as tax payment, Form 16, applicable deductions, and deadlines.

Understanding Income Tax Filing in India

Income tax filing in India involves submitting an income tax return (ITR) to the Income Tax
Department, declaring income earned during the financial year. The assessment year (AY) follows the financial year, meaning for FY 2025-2026, the AY is 2026-2027.
Filing an ITR is mandatory for individuals earning above the basic exemption limit set by the government. The process can be completed online through the e-filing portal, simplifying tax compliance.
Apart from fulfilling a legal obligation, filing an ITR has several advantages, including access to financial products like loans and credit cards. It also serves as proof of income, which can be useful for visa applications, investment declarations, and financial planning. Keeping accurate records of income tax returns ensures a transparent financial history and builds credibility with financial institutions.

Who Should File an Income Tax Return?

The following individuals and entities are required to file an income tax return in India:

• Salaried Individuals: If taxable income exceeds Rs. 2.5 lakh (Rs. 3 lakhs for senior citizens and Rs. 5 lakhs for super senior citizens).
• Self-Employed Professionals and Business Owners: Irrespective of profit or loss, tax filing is necessary.
• Companies and Firms: Every registered company, regardless of revenue.
• Individuals Claiming a Refund: If excess tax is deducted at source (TDS), an ITR must be filed to claim a refund.
• Residents with Foreign Income or Assets: If an individual holds foreign assets, they must disclose and file an ITR.
• Individuals with High-Value Transactions: Those involved in significant financial transactions, such as buying property or investing in stocks, must file returns.

Important Documents for Income Tax Filing
Before filing an income tax return, gather the following essential documents:

PAN (Permanent Account Number)

• Aadhaar Card (Mandatory for verification)
• Form 16 (Issued by the employer for salaried individuals)
• Form 26AS (Annual tax statement reflecting TDS deductions)
• Bank Statements (To verify income and investments)
• Investment Proofs (PPF, ELSS, NSC, LIC premium, etc.)

Home Loan Interest Certificate

• Business Income Documents (If applicable)
• Capital Gains Statements (For stock market investors and property sales) ITR Forms Applicable for FY 2025-2026

The Income Tax Department has designated various ITR forms based on income sources:

• ITR-1 (Sahaj): For salaried individuals with income up to Rs. 50 lakhs.
• ITR-2: For individuals with income from capital gains, foreign assets, or high-value transactions.
• ITR-3: For professionals and business owners.
• ITR-4 (Sugam): For taxpayers opting for the presumptive taxation scheme.
• ITR-5: For partnership firms and LLPs.
• ITR-6: For companies.
• ITR-7: For trusts and non-profit organizations.

Step-by-Step Guide to Income Tax Filing in India (FY 2025-2026)

Step 1: Calculate Total Income

Determine your total income by adding up the following:

• Salary income
• Income from house property
• Capital gains
• Business or professional income
• Other sources such as interest, dividends, etc.

Step 2: Deduct Eligible Deductions

Claim deductions under:

• Section 80C (PPF, ELSS, NSC, etc.)
• Section 80D (Health insurance premiums)
• Section 24(b) (Home loan interest)
• Section 80G (Donations)
• Section 80E (Education loan interest)
• Section 80TTA/80TTB (Savings account interest exemption)

Step 3: Determine Tax Liability

After applying deductions, compute tax liability based on the applicable tax slabs:

Income Tax Slabs for FY 2025-2026 (As per Old Regime)

New Tax Regime
The government has introduced a new tax regime with lower tax rates but fewer deductions. Taxpayers can choose between the old and new regimes.

Income Tax Slabs for FY 2025-2026 (As per New Regime)

Step 4: Pay Any Pending Taxes
If tax dues remain after TDS deductions, pay them using Challan ITNS 280 through the e-filing portal or a bank.

Step 5: File ITR Online (E-Filing)

• Visit the Income Tax e-Filing Portal.
• Log in using PAN/Aadhaar.
• Select the appropriate ITR form.
• Pre-fill details using Form 16 and Form 26AS.
• Verify income, deductions, and tax calculations.
• Submit the ITR and receive the acknowledgment.

Step 6: Verify the ITR

After submission, verify the ITR via:

• Aadhaar OTP
• Net Banking
• Sending a signed physical copy to CPC Bangalore

Income Tax Filing Deadlines for FY 2025-2026

• Individual taxpayers: July 31, 2026
• Businesses requiring audit: October 31, 2026
• Companies and LLPs: October 31, 2026
• Belated Returns: December 31, 2026 (With late fees) Common Mistakes to Avoid
• Wrong ITR Form Selection: Choosing the incorrect form can lead to rejection.
• Not Reporting All Income: Disclose all income sources, including fixed deposits and dividends.
• Incorrect Deductions Claim: Ensure all deductions are valid.
• Mismatched Form 16 & 26AS Data: Cross-verify TDS details before filing.
• Non-Verification of ITR: ITR filing remains incomplete without verification. Benefits of Filing an ITR on Time
• Avoiding Penalties: Late filing incurs fines up to Rs. 10,000.
• Easy Loan Approvals: Banks require ITRs for loan applications.
• Claiming Refunds: Excess tax deducted can be refunded.
• Visa Processing: Some countries mandate ITR for visa applications.
• Compliance with Tax Laws: Avoid legal consequences by timely filing. Conclusion

Filing income tax returns in India for FY 2025-2026 is a streamlined process with online e-filing options. Whether salaried or self-employed, understanding tax slabs, deductions, and deadlines ensures smooth compliance. Ensure you file the correct ITR form, verify details, and complete verification on time to avoid penalties and maximize tax benefits.
Additionally, staying updated with changing tax laws and regulations helps taxpayers make informed financial decisions. Regular tax filing also builds a strong financial profile, which is beneficial for loan

approvals and business expansions. Moreover, it fosters a culture of financial discipline and transparency, contributing to the overall economic stability of the country.
For expert guidance on Income Tax Filing or to gain deeper insights into the above topic you can contact CA Pratik S Kothari .