Income Tax Filings

Income Tax Filings: A Complete Guide for 2025-26

Income tax filing is the process of declaring an individual’s or entity’s income to the government for a specific financial year. This guide provides comprehensive information on eligibility, types of tax returns, due dates, steps for filing, and penalties for non-compliance, updated with the latest budgeted figures for 2025-26.

Who Needs to File Income Tax Returns?

1. Individuals

Filing is mandatory for individuals based on income level, residential status, and age.

Under the New Tax Regime (2025-26):

Income up to ₹12,00,000 is tax-free.
For salaried employees, income up to ₹12,75,000 is tax-free due to the standard deduction.

Under the Old Tax Regime:

Resident Individuals (<60 years): Income exceeds ₹2,50,000.
Resident Senior Citizens (60–80 years): Income exceeds ₹3,00,000.
Resident Super Senior Citizens (80+ years): Income exceeds ₹5,00,000.
Non-Residents: Income exceeds ₹2,50,000.

2. Businesses and Entities

Filing is mandatory for:

Companies, Hindu Undivided Families (HUFs), Partnership Firms, LLPs, Associations of Persons (AOPs), Bodies of Individuals (BOIs), and Artificial Juridical Persons, regardless of income level.

3. Special Cases for Individuals

An individual must file an ITR even if income does not exceed the exemption limit but meets any of the following criteria:

Foreign Assets and Income:

Ownership of assets located outside India.
Signing authority over any foreign accounts.

Business or Professional Income:

Gross receipts exceed ₹60 lakh in business or ₹20 lakh in profession during the financial year.

TDS/TCS Deducted:

Residents receiving TDS exceeding ₹50,000 (senior citizens) or ₹25,000 (other individuals).

4. Income from Specific Sources

Taxpayers earning income from the following must file an ITR:

Capital gains from the sale of property, shares, or other assets.
Income from multiple house properties.
Agricultural income exceeding ₹5,000.
Foreign income or directorship in a foreign company.
Income from cryptocurrencies or virtual digital assets.

5. Losses to Be Carried Forward

To carry forward losses (business, capital, or property losses) for future tax adjustments, filing an ITR is mandatory.

6. Entities Claiming Tax Refunds

If a taxpayer has paid more tax than required (via TDS, advance tax), they must file an ITR to claim refunds.

Types of Income Tax Returns

Type of Return	Description	Key Points
Original Return	Filed within the due date prescribed by law (e.g., July 31 for individuals).	- Ensures compliance with tax laws. - Eligible for refunds, carry forward of losses, and deductions.
Revised Return	Used to correct errors or omissions in an original return.	- Can be filed up to December 31 of the assessment year. - Replaces the original return.
Belated Return	Filed after the due date but before December 31 of the assessment year.	- Subject to penalties and interest. - Losses (other than house property losses) cannot be carried forward.
Updated Return	Allows taxpayers to report previously unreported income or file a return after missing deadlines.	- Can be filed within 2 years from the end of the relevant assessment year. - Additional tax penalty applies: 25% of due tax if filed within 12 months. 50% of due tax if filed after 12 months but within 24 months.
Loss Return	Filed to declare and carry forward losses (e.g., business or capital losses) for future tax adjustments.	- Losses can only be carried forward if the return is filed on time. - Late filing allows only house property losses and unabsorbed depreciation to be carried forward.

Due Dates for Filing Income Tax Returns (ITRs)

Category of Taxpayer	Due Date for Filing ITR
Individuals and HUFS (Non-Audited)	July 31 of the assessment year.
Businesses Requiring Audit (Section 44AB)	October 31 of the assessment year.
Companies Requiring Audit (Section 44AB)	October 31 of the assessment year.
Entities with International Transactions	November 30 of the assessment year (Transfer Pricing).
Taxpayers Covered under Section 92E	November 30 of the assessment year.
Businesses Opting for Presumptive Taxation	July 31 of the assessment year (if not audited).
Belated or Revised Return	December 31 of the assessment year.
Updated Return	Within 2 years from the end of the relevant assessment year.

Steps to File an Income Tax Return (ITR)

Step	Description
1. Determine Applicability	Identify whether you are required to file an ITR based on income levels, exemptions, or other criteria (e.g., high-value transactions).
2. Gather Required Documents	Collect all necessary documents, including : - PAN and Aadhaar. - Form 16 (for salaried individuals). - Bank statements. - Investment proofs. - Capital gains statements, if applicable.
3. Log in to the Income Tax Portal	Visit the Income Tax Department portal and log in using your PAN and password.
4. Select the Appropriate ITR Form	Choose the correct form based on your income source, taxpayer category, and other factors (e.g., ITR-1 for salaried individuals, ITR-3 for businesses).
5. Fill in Income Details	Enter details of income from all sources, such as : - Salary. -House property. - Capital gains. - Business/professional income.
6. Claim Deductions	Include deductions under various sections (e.g., Section 80C for investments, Section 80D for health insurance premiums).
7. Pay Tax Liability (if any)	If tax is due, pay it using the challan payment system and include the challan details in your return.
8. Validate and Review	Carefully review all details to avoid errors, discrepancies, or omissions.
9. Submit the Return	Submit your return online and note the acknowledgment number generated (ITR-V).
10. Verify the Return	Verify the return using any of the following methods, - Aadhaar-based OTP. - Electronic Verification Code (EVC) through net banking. -Sending a signed physical copy of ITR-V to the CPC in Bangluru

Important Tips

Ensure all income sources are reported to avoid notices or penalties.
File the correct ITR form to prevent rejection of your return.
Keep a record of your filed return and acknowledgment for future reference.

Penalties and Consequences

Type of Non-Compliance	Penalty/Consequences
Late Filing of ITR	- ₹1,000 if income is between ₹2,50,000 and ₹5,00,000. - ₹5,000 if income exceeds ₹5,00,000.
Non-Filing of ITR	- Notice from the IT Department. - Prosecution (up to 7 years of imprisonment in severe cases).
Interest on Late Filing (Section 234A)	- 1% per month or part of a month on unpaid taxes from the due date till actual filing.
Underreporting or Misreporting of Income	- 50% of tax payable on underreported income. - 200% of tax payable for misreporting.

Why is Income Tax Filing Important?

Filing an income tax return (ITR) is not just a legal obligation—it’s a key part of financial management.

1. Legal Obligation

Compliance with Tax Laws: Under the Income Tax Act, 1961, individuals and businesses earning above specific thresholds must file an ITR.
Avoiding Penalties: Timely filing prevents legal consequences and penalties.

2. Evidence of Income

Proof of Income: Essential for financial transactions, loan applications, and visa processing.
Credibility: Regular ITR filing reflects financial discipline and credibility.

3. Claiming Refunds

If excess tax has been paid via TDS, advance tax, or self-assessment tax, an ITR is required to claim a refund.

4. Carrying Forward Losses

Filing before the due date allows taxpayers to carry forward business, capital, or property losses to offset against future income, reducing future tax liability.

5. Loan and Credit Approvals

Loan Applications: Banks require ITR receipts to process home, vehicle, or business loans.
Credit Cards: Filing an ITR demonstrates income stability, making it easier to obtain high-limit credit cards.

6. Visa Processing

Many foreign embassies require ITR receipts for visa applications, especially for work, study, or travel visas.

7. Avoiding Penalties

Late Filing Penalties: Delay in filing may result in penalties up to ₹5,000, along with interest on unpaid taxes.

8. Facilitates Business Growth

Businesses filing regular ITRs can:
- Apply for government tenders and contracts.
- Enhance credibility with investors and stakeholders.
- Maintain clean financial records for audits and compliance.

9. Safeguard Against Scrutiny

Filing your ITR on time reduces the chances of receiving tax notices from the Income Tax Department.

Ensure Timely Filing and Stay Compliant

Filing an income tax return is not just a legal responsibility—it also helps individuals and businesses build financial credibility, secure loans, claim refunds, and avoid penalties.

Need Assistance? Our tax experts can guide you through the filing process, ensuring accuracy and compliance. Contact us today!