Why Filing Your ITR Correctly Matters
Filing your Income Tax Return (ITR) is one of the most important financial responsibilities for every salaried employee in India. Beyond being a legal obligation, your ITR serves as a crucial financial document — it is required for visa applications, loan approvals, credit card applications, and even as proof of income for rental agreements. With the Income Tax Department increasingly automating scrutiny through pre-filled returns and data matching from banks, employers, and financial institutions, accuracy in ITR filing has never been more critical.
For FY 2026-27 (Assessment Year 2027-28), the ITR filing process is largely online through the Income Tax Department's e-filing portal (incometax.gov.in). The process has become more streamlined with pre-filling of salary income, TDS, and bank interest. However, the simplification also means that any discrepancy between your filed return and the data already available with the tax department is instantly flagged — triggering an automated notice. This guide walks you through every step of the ITR filing process, from gathering documents to e-verification, ensuring your return is accurate and complete. For TDS details during the year, see our TDS on Salary Guide.
When to File: Important Deadlines for FY 2026-27
| Scenario | Due Date |
|---|---|
| ITR filing for salaried employees (no audit required) | 31st July 2027 |
| ITR filing for taxpayers requiring audit | 31st October 2027 |
| ITR filing for transfer pricing cases | 30th November 2027 |
| Belated return (for missed deadline) | 31st December 2027 |
| Revised return (to correct errors in original return) | 31st December 2027 |
Key Point: The due date for most salaried employees is 31st July 2027. Filing after this date is possible as a belated return (up to 31st December 2027), but you will lose the ability to carry forward certain losses and may be liable for a late filing fee of up to ₹5,000 (₹1,000 for income below ₹5 lakh) under Section 234F.
Documents You Need Before You Start
- Form 16 from your employer — This is the most important document. It contains your total salary, perquisites, allowances, deductions claimed (under 80C, 80D, etc.), TDS deducted, and the employer's TAN. Your employer must issue Form 16 by 15th June 2027. If you have multiple employers during the year, you will have multiple Form 16s.
- Form 26AS / AIS (Annual Information Statement) — This is the consolidated tax statement available on the income tax portal showing TDS deducted by all deductors (employers, banks, etc.), tax payments made (advance tax, self-assessment tax), and high-value financial transactions (property purchases, mutual fund investments above threshold). The AIS is more detailed than the older Form 26AS and includes information like interest income from banks, dividend income, and property sale consideration — all pre-filled for your reference.
- Bank statements for all savings accounts — Interest earned on savings accounts (up to ₹10,000 under 80TTA) is pre-filled based on bank reporting. Verify the pre-filled amounts match your records.
- Investment proofs — PPF passbook, ELSS statements, life insurance premium receipts, NSC certificates, home loan statement (principal + interest), tuition fee receipts, and health insurance premium receipts. While these are not uploaded during ITR filing, you must retain them for 6 years in case of scrutiny.
- Rent receipts and landlord PAN if claiming HRA exemption
- Home loan certificate from bank showing principal repayment and interest paid
- Capital gains details if you sold any investments (mutual funds, stocks, property) during the year
Which ITR Form Should You Use?
| ITR Form | Who Should Use It |
|---|---|
| ITR-1 (Sahaj) | Salaried employees with income from salary, one house property, and other sources (interest, family pension). Total income up to ₹50 lakh. Cannot be used if you have capital gains, foreign income, or assets outside India. |
| ITR-2 | Salaried employees with capital gains, more than one house property, foreign income/assets, or total income exceeding ₹50 lakh. Also for directors of companies and unlisted equity shareholders. |
| ITR-3 | For individuals with income from business or profession (proprietorship, freelancers, professionals). Also used if you are a partner in a firm. |
| ITR-4 (Sugam) | For individuals opting for presumptive taxation under Section 44AD, 44ADA, or 44AE (businesses with turnover up to ₹2 crore, professionals with receipts up to ₹50 lakh). |
For most salaried employees with only salary income and a savings account: ITR-1 is sufficient. If you have sold mutual funds or stocks (even through an employee stock option plan), you must use ITR-2. When in doubt, ITR-2 is safer than ITR-1 — using an incorrect form can result in the return being treated as defective.
Step-by-Step ITR Filing Process
Step 1: Log In to the Income Tax Portal
Visit incometax.gov.in and log in with your PAN and password. If you are a first-time user, register using your PAN, Aadhaar, and mobile number. The portal will pre-fill your personal information based on Aadhaar and PAN records. Verify that your name, date of birth, and contact details are correct. If your PAN is not linked to Aadhaar, link it before filing — the tax department mandates PAN-Aadhaar linking for ITR filing.
Step 2: Select the Correct Assessment Year and ITR Form
Under the "e-File" menu, select "Income Tax Return" → "File Income Tax Return" → Select Assessment Year "2027-28" (for FY 2026-27). Select the appropriate ITR form (ITR-1 or ITR-2). Choose the filing type — "Online" (fill on the portal) is simpler for most employees. The portal will pre-fill your personal information.
Step 3: Validate Pre-Filled Data
The portal pre-fills information from multiple sources: salary income from Form 16 (via your employer's TDS return), TDS deducted (from Form 26AS), bank interest income (from SFT data submitted by banks), and tax-saving investments (from previous year data if applicable). Critically verify every pre-filled number against your Form 16 and bank statements. Common pre-fill errors include: incorrect interest income (some banks report all credits as interest), salary from previous employer not appearing (if your new employer filed TDS return late), and missing deductions.
Step 4: Enter Salary and Deduction Details
Under "Salary Income," enter the total salary as per your Form 16 and the TDS deducted. If you have income from more than one employer during the year (job change), enter the combined salary from all Form 16s. The standard deduction of ₹75,000 (new regime) or ₹50,000 (old regime) is applied automatically based on the regime you select. Under "Deductions," enter your Section 80C investments (EPF, PPF, ELSS, life insurance, tuition fees, home loan principal), Section 80D health insurance premiums, Section 80CCD(1B) NPS contributions, and any other deductions you are eligible for. Note that deductions are available only under the old tax regime.
Step 5: Select Your Tax Regime
This is the most critical step. The portal will ask you to confirm your choice of tax regime — old or new. The tax computation is performed based on your choice. If you selected the old regime, ensure you have entered all eligible deductions — missing even one deduction (like HRA or 80C) will make the old regime seem more expensive than it actually is. If you are unsure which regime to choose, follow the decision framework in our Income Tax Slabs Guide.
Step 6: Compute Tax and Verify
After entering all income and deduction details, click "Compute Tax." The portal calculates your total tax liability based on the selected regime. Compare this with the total TDS deducted (from Form 16) and any advance tax or self-assessment tax you may have paid. If TDS deducted exceeds your total tax liability, you are eligible for a refund. If TDS deducted is less than your tax liability, you must pay the balance as self-assessment tax before filing.
Step 7: Pay Any Balance Tax (If Applicable)
If your total tax liability exceeds the TDS deducted, you must pay the difference as self-assessment tax before filing. Click "Pay Tax" and generate a challan (ITNS 280). Select "Self Assessment Tax" (300) as the type of payment. Pay through net banking, debit card, or other available payment methods. Note the BSR code, challan serial number, and date for entering in the ITR form.
Step 8: Review and Submit
Review the entire return — income details, deductions, tax computation, and tax payments. Verify that all pre-filled data has been validated. Submit the return. After submission, you will receive a transaction ID and a "Successfully Submitted" message.
Step 9: E-Verify Your Return (Mandatory)
Filing the return is not complete until it is verified (e-verified). You have several options: Aadhaar OTP (simplest — enter your Aadhaar number, receive OTP on linked mobile, enter OTP to verify), Net banking (log in to your registered bank's net banking to verify), Bank account-based OTP (pre-registered bank account), Digital Signature Certificate (DSC), or Physical ITR-V (for the last resort — print, sign, and post to CPC Bengaluru within 30 days). Aadhaar OTP is the fastest and most commonly used method. Your return is processed only after successful e-verification. Without e-verification, the return is considered as not filed.
Filing for Different Scenarios
Scenario 1: Multiple Jobs During the Year
If you changed jobs during FY 2026-27, you will receive Form 16 from both employers. You must: combine the salary income from both Form 16s, ensure TDS from both employers is reflected in your Form 26AS, include all member IDs under your UAN for PF contributions (which count toward 80C), and verify that both employers have correctly deducted TDS based on your chosen regime. A common error in this scenario is that the second employer may have deducted TSD assuming you worked the full year and missed the lower income in the first job — leading to excess TDS, which you can claim as a refund.
Scenario 2: Income from House Property
If you own a house property that is rented out, or if you have two house properties, you must file ITR-2. Rental income from house property is taxable under "Income from House Property." Your bank's home loan interest certificate (Section 24 — up to ₹2,00,000 for self-occupied property) and principal repayment certificate (Section 80C) are needed. For let-out property, the net annual value (rent received minus municipal taxes) minus 30% standard deduction minus home loan interest is the taxable income.
Scenario 3: Capital Gains from Equity/Shares
If you sold equity shares, mutual funds (including through ELSS redemptions), or property during the year, you have capital gains. Long-term capital gains (LTCG) on equity over ₹1,00,000 are taxed at 10% without indexation. Short-term capital gains (STCG) on equity are taxed at 15%. Losses can be set off and carried forward. You must use ITR-2 for capital gains. Our TDS on Salary Guide does not cover capital gains in detail — consult your CA or use the income tax portal's capital gains utility.
📊 Plan Your Tax Before Filing
Use our CTC to In-Hand Calculator to estimate your tax liability and plan investments well before the ITR deadline.
Open CTC to In-Hand Calculator →Common ITR Mistakes That Trigger Notices
Mismatch between ITR and Form 26AS/AIS: This is the #1 reason for automated notices. If the income you declare in your ITR (especially interest income, dividend income, or property sale consideration) does not match the data in the tax department's AIS, an auto-generated notice under Section 143(1) is issued. Always cross-verify pre-filled data before submission.
Selecting the wrong regime: The tax regime chosen in the ITR overrides the regime used by your employer for TDS. If your employer deducted TDS under the new regime but you select the old regime in your ITR (to claim deductions), the portal will compute tax under the old regime. If this results in lower tax, you get a refund. However, if you selected the old regime but did not enter all deductions, your tax may be higher than necessary.
Not reporting all bank accounts: The tax department now has data on all bank accounts via SFT reporting. If you have a bank account that earned interest but you did not report the interest, the mismatch is flagged. For savings account interest up to ₹10,000 (₹50,000 for senior citizens), the interest is deductible under Section 80TTA/80TTB — so even if you report it, no tax is payable on it.
Claiming HRA without valid rent receipts: If you claimed HRA exemption in your ITR but cannot produce rent receipts or landlord PAN during scrutiny, the exemption will be disallowed with interest. Maintain proper documentation.
Filing ITR-1 instead of ITR-2: If you have capital gains, more than one house property, or foreign income, filing ITR-1 makes your return "defective." The department will ask you to file a revised return using ITR-2. This delay can cause matching errors and notices.
How to Check ITR Processing Status
Log into the income tax portal → "e-File" → "Income Tax Returns" → "View Filed Returns." The status shows: "Submitted" (waiting for verification), "Verified" (e-verified, under processing), "Processed" (completed — refund issued or demand raised), or "Notice Generated" (discrepancy found). Processing typically takes 15-45 days after e-verification. Refunds are generally credited within 30 days of processing. If you have not e-verified within 120 days of filing, the return is treated as "Not Filed" — requiring a fresh filing.
Need Help With Your ITR Filing?
GHR Consultancy assists salaried employees and Kerala businesses with end-to-end tax compliance. For employees, we offer ITR preparation and filing services, ensuring all deductions are correctly claimed and your return matches Form 26AS data. For employers, our Payroll Services include TDS computation, Form 16 generation, quarterly TDS return filing, and ITR support for employees. With over 30 years of experience in Kerala's payroll and compliance landscape, we ensure your tax filings are accurate, complete, and stress-free. Contact us for a free consultation.
Related guides: Income Tax Slabs 2026-27, TDS on Salary Guide, Section 80C Tax Saving Guide, and HRA Exemption Rules Guide.