Filing an income tax return (ITR) for the first time can feel confusing, especially with different ITR forms and new compliance rules. Many first-time taxpayers often rely on entirely pre-filled data or choose the wrong form without understanding whether it matches their income profile.
If there are mismatches or missing details in your return, it can delay your tax refund and may even attract penalties or notices from the income tax department, hence its crucial to report everything properly. For salaried taxpayers who are not required to undergo an audit, the deadline to file ITR for the financial year 2025–26 (AY 2026–27) is 31 July 2026, unless extended.
What first-time taxpayers must follow?
Four easy steps first-time taxpayers should follow while filing their income tax returns for FY 25-26 (AY 26-27)
- Keep your income details ready: Before filing your return, it's crucial to keep all your income, including bank interest, capital gains, freelance income, and foreign assets (if applicable) handy to ensure accurate reporting.
- Verify Form 16, AIS, and Form 26AS: These documents help taxpayers cross-check salary income, TDS deductions, bank interest, stock market transactions and other reported income details. Any mismatch between these records and the ITR filing can lead to delayed refunds or trigger tax notices from the income tax department.
- Choose the correct ITR form: A taxpayer must choose the right form based on their income profile. In case you end up filing an incorrect ITR form, the income tax department may treat the return as defective under Section 139(9) and issue a notice requiring correction within a specified time. In such cases, the return is not processed until the defects are rectified.
- Keep investment proofs and deduction documents ready: Taxpayers planning to claim deductions under Sections 80C, 80D, HRA, education loan interest, or other exemptions should keep supporting documents such as insurance receipts, rent receipts, ELSS investment proofs, and loan certificates available while filing ITR.
- File your ITR and then e-verify it: If a taxpayer fails to e-verify their ITR after filing it, their return is treated as not filed. Taxpayers can e-verify their returns online using Aadhaar OTP, EVC, net banking and digital signature certificate (DSC). You can also do it offline via ITR-V.
Types of ITR forms and who files what
There are several ITR forms, meant for taxpayers with different income profiles and investments in assets.
- ITR-1 form: This form should be filed by salaried individual with income up to ₹50 lakh from two house property, salary or pension, and other sources such as interest, dividend, and family pension or agricultural income up to ₹5,000. Long-term capital gains up to ₹1.5 lakh can also be reported, provided there are no brought forward or carry forward capital losses.
- ITR-2 form: Individual or Hindu Undivided Family (HUF) without business income. Income exceeding the conditions in ITR-1, and comes from multiple house properties, higher capital gains or foreign assets and income. NRIs can also file this form.
- ITR-3 form: It is applicable for individuals and HUFs having income from a proprietary business or profession. It is applicable when the taxpayer maintains regular books of accounts and total income exceeds ₹50 lakh.
- ITR-4 form: This form should be used by resident individuals, HUFs and firms with total income up to ₹50 lakh and having business or professional income under the presumptive taxation scheme as per Sections 44AD, 44ADA or 44AE along with salary, one house property and other source of incomes.
- ITR-5 form: This form is meant for a specific class of taxpayers, such as a Firm, LLP, AOP, among others.
What happens if you fail to file ITR within the deadline?
If you missed the original deadline for filing tax return, there's still an option left. A belated income tax return is one filed after the last date but before 31 December 2025. However, it attracts a late fee of ₹5,000 and deprives the taxpayer of carrying forward losses.
Belated return is different from updated return. Updated return (ITR-U) was introduced in the Finance Act 2022. With ITR-U, taxpayers can correct tax filing errors, add omitted income, or rectify misreporting.