Salaried ITR Filing for FY 2025-26: ITR-1 vs ITR-2, Deadlines, Penalties

If you have any business or professional income, you need ITR-3 or ITR-4 with the 31 August 2026 deadline. ITR-1 and ITR-2 are for salaried and salary-plus-investment income only.

The staggered framework reduces last-minute portal load and gives audit-case taxpayers more time. The schedule applies only to original returns. Belated returns under Section 139(4) follow the unified 31 December 2026 deadline regardless of category.

• •Pure salary plus one self-occupied or let-out property, total under Rs 50L: ITR-1.
• •Salary plus capital gains from listed shares, mutual funds, or property: ITR-2.
• •Multiple house properties or any house property loss to carry forward: ITR-2 (not ITR-1).
• •Foreign assets, foreign salary, or ESOPs vested in a foreign parent company: ITR-2 with Schedule FA.
• •Any business or professional income (freelance, consulting, side hustle reported on books): ITR-3 (file by 31 August 2026).
• •Presumptive taxation under 44AD or 44ADA: ITR-4 Sugam (file by 31 August 2026).
• •Unlisted equity, partnership share, or director in an unlisted company: ITR-3 with mandatory disclosure of unlisted shareholding.

Standard deduction under the new regime is Rs 75,000 (was Rs 50,000 earlier). Section 87A rebate under the new regime takes total tax to nil for income up to Rs 12 lakh, with marginal relief between Rs 12 lakh and roughly Rs 12.75 lakh. The old regime continues to allow 80C (Rs 1.5L), 80D, HRA, home loan interest, and other deductions. Compare both before locking in the regime, you can switch annually as a salaried individual.

• •Form 16 from every employer in FY 2025-26 (if you switched jobs, you'll have two).
• •Form 26AS and AIS/TIS downloaded from the e-filing portal. Reconcile against Form 16 and bank interest statements.
• •Capital gains statements from your broker or mutual fund house (preferably the consolidated one with grandfathering reflected).
• •Interest certificates from banks for all FDs and savings accounts.
• •Home loan interest certificate from the bank, if claiming Section 24(b).
• •Rent receipts and rent agreement, if claiming HRA exemption (employer accepts these too in some cases).
• •Section 80C, 80D proofs (PPF, ELSS, life insurance premium, health insurance premium, NPS contribution).
• •ESOP perquisite working from the employer for foreign-parent ESOPs, plus the original grant and vesting details.
• •PAN, Aadhaar (linked), and bank account number where any refund should be credited.

• •Section 234F late filing fee: Rs 5,000 if total income is above Rs 5 lakh, Rs 1,000 if it is below.
• •Section 234A interest at 1 percent per month or part of a month on any unpaid tax until the date of filing.
• •Section 234I revised return fee (new under Budget 2026, effective 1 March 2026): Rs 5,000 (Rs 1,000 if income up to Rs 5 lakh) for revised returns filed between 1 January 2027 and 31 March 2027. This is a separate fee, payable in addition to any 234F fee on a belated original return.
• •Loss of carry-forward of capital losses (under Section 80, the right to carry losses forward is conditional on filing the return by the original due date).

Refunds get processed only after the return is filed and assessed. If your TDS exceeds your final tax liability, every month of late filing is a month your refund money sits with the department instead of in your account.

Belated returns under Section 139(4) lose loss carry-forward rights. Revised returns under 139(5) preserve everything from the original filing but require declaring the original ITR's acknowledgement number. Updated returns under 139(8A) only allow upward revisions (more tax) and attract additional 25 percent or 50 percent of tax depending on when filed.

• •Filing ITR-1 when you have any capital gains. Even Rs 100 of mutual fund redemption gain triggers ITR-2.
• •Not reconciling Form 16 with Form 26AS. The department's data wins, mismatches lead to scrutiny notices.
• •Claiming HRA without the rent agreement and rent receipts to back it up if income exceeds Rs 50 lakh.
• •Missing Schedule FA disclosure for foreign assets, including ESOPs in foreign-parent companies. Penalty under the Black Money Act is severe.
• •Selecting the wrong tax regime mid-filing. Once you save the regime selection, switching back can cause a fresh ITR draft to be needed.
• •Forgetting to verify the return after filing. An unverified return is treated as not filed. e-Verification through Aadhaar OTP, net banking, or Demat account is the cleanest route.

ITR forms for AY 2026-27 still use the 1961 Act references on Tab 1 of the e-filing portal. From AY 2027-28 onwards, Tab 2 references the 2025 Act. The portal will guide you correctly. The math doesn't change, only the section numbers do.