ITR Filing: The Income Tax Returns (ITR) filing procedure for Assessment Year 2026-27 is set to gain momentum in the coming weeks as taxpayers will start submitting returns for the financial year 2025-26.

The Central Board of Direct Taxes (CBDT) had notified all ITR forms on March 31, allowing salaried individuals, businesses, professionals and other entities to begin preparations for filing their returns.

Although the income tax portal officially opens from April 1 each year, actual return filing activity generally picks up only after backend systems and forms are fully updated and stabilised, which usually happens around mid-May.

Choosing the correct ITR form is crucial

The type of ITR form applicable depends on factors such as income source, salary, business income, capital gains, house property income, freelance receipts and foreign assets. Tax experts say selecting the wrong form can lead to defective return notices or delays in processing refunds.

Salaried individuals earning up to Rs 50 lakh annually can generally file returns using ITR-1 (Sahaj), provided their income comes from salary, up to two house properties and interest income.

The government has introduced several changes in ITR-1 for FY26 under the new Income Tax Act, 2026. One major change is that taxpayers can now report long-term capital gains (LTCG) from listed equities and equity-oriented mutual funds in ITR-1, provided total LTCG does not exceed Rs 1.25 lakh during the financial year.

If capital gains exceed that threshold, taxpayers must shift to ITR-2.

The taxation structure for long-term capital gains has also changed. Earlier, LTCG on different assets attracted varying tax rates of 10 per cent and 12.5 per cent. However, Budget 2024-25 standardised LTCG taxation rates to:

12.5 per cent without indexation

20 per cent with indexation

These revised tax rules will apply while filing returns for FY26.

Another key relief for salaried taxpayers is that individuals with income from two house properties can now use ITR-1. Previously, the form was restricted to taxpayers with income from only one house property.

In addition, interest earned from fixed deposits is taxable under “Income from Other Sources” according to the applicable slab rate.
Banks deduct 10 per cent TDS if annual FD interest exceeds:

Rs 40,000 for regular taxpayers

Rs 50,000 for senior citizens

If PAN details are not provided, higher TDS may apply.

Freelancers and self-employed professionals are generally required to file either ITR-3 or ITR-4, depending on the taxation scheme they opt for.

Professionals such as content writers, graphic designers, consultants, video editors and independent service providers can choose the presumptive taxation scheme under Section 44ADA.

Under this scheme, only 50 per cent of gross receipts are treated as taxable income under “Income from Business or Profession.”

Payments made to freelancers for professional services attract 10 per cent TDS under Section 194J of the Income Tax Act. However, the TDS deducted can later be claimed as tax credit or refund while filing returns.

Freelancers whose annual tax liability exceeds Rs 10,000 are also required to pay advance tax every quarter. Those opting for presumptive taxation under Section 44ADA can pay advance tax in a single instalment before March 15 each year.

Here’s a quick breakdown of who should file which form:

ITR-1: Salaried individuals with income up to Rs 50 lakh

ITR-2: Individuals with capital gains income

ITR-3: Individuals with business or professional income

ITR-4: Small businesses and professionals under presumptive taxation

ITR-5: Firms, LLPs, AOPs and BOIs

ITR-7: Charitable and religious trusts

Important ITR filing deadlines

Non-audit taxpayers filing ITR-1 and ITR-2 must submit returns by July 31, 2026. Meanwhile, taxpayers filing ITR-3 and ITR-4 have a deadline of August 31, 2026.

Taxpayers who miss the original due date can still file a belated return by December 31, 2026, although late fees and interest penalties may apply.