The Income Tax Return (ITR) filing season is underway for FY 2025-26, covering income transactions from April 1, 2025 to March 31, 2026. For salaried individuals and Hindu Undivided Families (HUFs) whose accounts are not subject to tax audit, the ITR-1 or ITR-2 deadline is July 31, 2026. However, taxpayers can revise their ITR until March 31 of the following year, with the deadline extended for taxpayer convenience. According to ClearTax, filing a revised ITR does not attract any penalty, allowing taxpayers to correct genuine errors without additional charges. As per Mint, it's crucial for taxpayers to file returns before the deadline, as after July 31, you cannot opt for the old tax regime - the default regime kicks in automatically. A return is treated as revised only if the original return is filed by the due date and e-verified within 30 days of e-filing.
The latest ITR-1 (Sahaj) form for AY 2026-27 introduces significant updates that expand its scope and improve accuracy. Resident individuals with total income up to ₹50 lakh from salary or pension, up to 2 house properties, interest income, and LTCG under Section 112A up to ₹1.25 lakh should file ITR-1. This represents a new change from the earlier limit of 1 house property, making the form more inclusive for taxpayers with multiple residential properties. The form covers income from salary or pension, up to two house properties, interest from savings or deposits, and limited long-term capital gains, while excluding business income, complex capital gains, or foreign assets. For FY 2025-26, the due date is July 31, 2026, with a belated return deadline until December 31, 2026, though this comes at additional cost. However, as per Mint, taxpayers must understand that merely owning foreign assets (and not selling them) is enough to file a return in ITR-2, even if they hold foreign assets in the form of mutual funds or stocks.
Taxpayers must carefully choose between the old and new tax regimes based on their specific circumstances. According to Mint, only those taxpayers should opt for the old tax regime who have deductions of ₹8 lakh or more. The choice of regime cannot be changed once the deadline passes, making it crucial to make the right decision before July 31. Additionally, taxpayers should cross-verify their taxable income against the Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) rather than relying solely on these documents. As per Mint, these documents do not disclose your entire income and could be underreporting your income in certain scenarios. If you changed jobs during the financial year, it's important to factor in income from both employers when calculating taxable income, as some taxpayers calculate based only on Form-16 from their current employer, overlooking income earned during the initial part of the year.
For taxpayers who invested in virtual digital assets (VDAs) during the year, there are important considerations to keep in mind. As per Mint, crypto losses are not set off against gains from crypto asset sales, and there is a flat 30% tax on crypto gains. This means that losses from one crypto transaction cannot be used to offset gains from another crypto transaction. The July 2026 tax calendar brings multiple critical deadlines beyond ITR filing, including July 7 for TDS and TCS deposits, July 15 for prescribed TDS certificates and statements, and July 30 for challan-cum-statement filing. For most individual taxpayers, July 31 remains the biggest deadline covering ITR filing, Form 10BA for house rent deductions, and multiple quarterly TDS statements.
For late ITR filing, taxpayers face specific penalties based on their income levels. Section 234F late filing fee can reach up to ₹5,000 for total income above ₹5 lakh, while those earning up to ₹5 lakh face a maximum penalty of ₹1,000. Additionally, Section 234A interest applies when tax remains unpaid after the due date. Missing the due date may also prevent taxpayers from carrying forward certain losses, including capital losses and business losses, which could otherwise be adjusted against future income to reduce tax liability. Apart from tax implications, delayed filing can affect a person's financial profile, as banks commonly request recent ITR acknowledgements while processing home, personal and business loan applications.
