Step-by-Step Guide to Filing ITR for AY 2026-27 for Salaried and Small Business Taxpayers

The Income-Tax Department has opened the electronic filing window for Assessment Year 2026-27 on 3 November 2026. This is the first return filing season governed by the Income-Tax Act, 2025, and the dates, forms and verification steps differ slightly from previous years. Meeting the deadline and using the correct form are essential to avoid penalties and ensure a smooth assessment.

What changed under the Income-Tax Act, 2025?

The new Act, which came into force on 1 April 2026, introduced a few procedural updates that affect all taxpayers filing for AY 2026-27. The most visible change is the shift of the filing start date to 3 November 2026, giving a shorter window of 19 days to submit returns before the 21 November deadline. The Act also mandates electronic verification through Aadhaar-linked OTP or digital signature for all returns, eliminating the need for physical ITR-V forms.

Another change is the re-classification of certain income sources. For example, income from freelance digital services that were previously treated as "professional income" under Section 44ADA now fall under the new Section 44AE-A, with a different presumptive rate. The tax rates themselves remain the same as in the 1961 Act for AY 2026-27, but the reporting format has been updated.

Who is affected?

The filing requirements apply to all individuals, Hindu Undivided Families (HUFs) and partnership firms whose total income exceeds the basic exemption limit for the relevant financial year (FY 2025-26). The two groups most likely to need guidance are:

• Salaried individuals – employees whose only income is salary, plus any house-rent allowance (HRA), leave travel allowance (LTA) or other perquisites.
• Small business owners – proprietors of businesses with turnover up to the threshold for presumptive taxation (currently ₹2 crore) and professionals opting for the presumptive scheme.

Both categories must file electronically using the appropriate ITR form, and they must complete the OTP-based verification before 21 November.

What it means in practice – a simple worked example

Consider Ravi, a salaried employee earning a gross salary of ₹9,00,000 per year. He receives HRA of ₹1,20,000 and pays ₹1,00,000 in rent. Under the new rules, he can claim HRA exemption using the same formula as before, but he must enter the details in the revised ITR-1 (Sahaj) layout.

Ravi’s taxable income calculation:

1. Gross salary: ₹9,00,000
2. Less: HRA exemption (minimum of the three amounts) – suppose it works out to ₹80,000
3. Net salary: ₹8,20,000
4. Less: Standard deduction of ₹50,000 (unchanged)
5. Taxable income: ₹7,70,000

Using the existing slab rates, his tax liability is ₹62,500 plus applicable cess. He files ITR-1, uploads Form 16, and verifies the return with an Aadhaar OTP on 15 November. The process is completed well before the deadline.

Now consider Meena, who runs a small boutique with a turnover of ₹1.5 crore. She opts for the presumptive taxation scheme under the new Section 44AE-A, which allows a 8 % presumptive profit on turnover. Her taxable income is therefore ₹12,00,000 (8 % of ₹1.5 crore). She files ITR-3, declares the presumptive profit, and verifies using a digital signature certificate (DSC) because she prefers DSC over OTP. The same 19-day window applies, so she must submit by 21 November.

Step-by-step filing process

Follow these steps to file your return on time:

1. Gather documents – Form 16 (salary), Form 26AS (tax credit), bank statements, investment proofs (ELSS, PPF, etc.), and any TDS certificates for non-salary income.
2. Choose the correct ITR form – ITR-1 for salaried individuals with no capital gains; ITR-2 for those with capital gains; ITR-3 for proprietors and professionals; ITR-4 for presumptive income.
3. Log in to the Income Tax e-filing portal – Use your PAN and password or Aadhaar-linked login.
4. Enter personal and income details – The new interface has separate tabs for salary, house property, business/profession, and other sources. Fill each tab accurately.
5. Claim deductions – Section 80C, 80D, 80G, etc., remain unchanged. Enter the amounts in the deduction section.
6. Compute tax and verify – The portal auto-calculates tax payable. If tax is due, pay using net-banking or NEFT before filing.
7. Electronic verification – Choose one of the following: (a) OTP to Aadhaar-linked mobile, (b) DSC, or (c) Net banking password. Complete verification before 21 November.
8. Keep acknowledgment – Download the ITR-V acknowledgment (now an electronic receipt) for your records.

All steps must be completed within the 19-day window; otherwise, the return will be considered late and may attract a penalty of ₹5,000.

Common mistakes and how to avoid them

Even experienced taxpayers slip up during the first year of the new Act. The most frequent errors are:

• Using the wrong ITR form – Filing ITR-1 when you have business income will lead to rejection.
• Missing the OTP verification – The portal will accept the return but will not process it until verification is done.
• Incorrect HRA calculation – The new layout separates HRA exemption from other allowances; double-entering the amount can inflate taxable income.
• Overlooking presumptive income limits – If turnover exceeds the ₹2 crore threshold, the presumptive scheme is not applicable; filing ITR-4 in that case will be rejected.

To avoid these pitfalls, double-check the form selection, review the verification status on the dashboard, and use the “Preview” function before final submission.

Key dates to remember

Mark these dates in your calendar and aim to complete the return at least three days before the deadline to allow time for any technical glitches.

Frequently asked questions

Do I need to file a separate ITR-V form?

No. Under the Income-Tax Act, 2025, electronic verification replaces the physical ITR-V. Once you verify with OTP or DSC, the return is considered filed.

Can I file after 21 November if I miss the deadline?

You can still file a belated return, but a penalty of ₹5,000 will be levied, and interest may accrue on any tax due.

What if I do not have an Aadhaar-linked mobile number?

You can use a digital signature certificate or the net-banking password option for verification. Ensure your DSC is valid and not expired.

Is the presumptive taxation scheme mandatory for small businesses?

No. It remains optional. If you prefer to maintain detailed books, you can file ITR-3 with actual profit and loss statements.

Sources

• Income Tax Department e-filing portal
• Income Tax Act & Rules
• ITR filing process for AY 2026-27 officially begins — DD News
• ITR filing deadline November 21: Who is eligible and what taxpayers should know — Zee Business

Reviewed: November 2026. Tax rules change — verify the current financial year and assessment year before you rely on any figure.

This is general educational information for Indian taxpayers, not personalised tax, legal or financial advice. Union of Taxpayers is an independent platform and not a government body. Consider a qualified professional for your specific situation.