How to File ITR for a Salaried Employee in India: Step-by-Step Guide for FY 2026-27

Filing your Income Tax Return sounds complicated, but for most salaried employees in India it is a straightforward process that takes 30–45 minutes if you have the right documents ready. The Income Tax Act 2025 made some changes to ITR forms and the filing process — here is everything you need to know for FY 2026-27 (Assessment Year 2027-28).

Do you need to file an ITR?

Not every salaried person must file a return. The Income Tax Act 2025 requires an ITR if:

• Your gross total income (before deductions) exceeds ₹3 lakh in the financial year (under the new regime)
• Your gross total income exceeds ₹2.5 lakh in the financial year (under the old regime)
• You are a resident of India and have assets or financial interests outside India
• You are a director of a company
• You have deposited more than ₹1 crore in a current account in a bank
• You have paid more than ₹50,000 as electricity bill in a year

Even if you are not required to file, doing so voluntarily is good practice — it establishes your income record with the tax department, makes it easier to get loans and visas, and allows you to carry forward losses.

Which ITR form do you use?

Salaried employees with only salary income and bank interest use ITR-1 or ITR-2:

• ITR-1 (Saral): For individuals and HUFs with income up to ₹50 lakh from salary, one house property, and other sources (interest, agriculture income up to ₹5,000). Cannot be used if you have capital gains.
• ITR-2: For individuals and HUFs with income from salary, multiple house properties, capital gains, or foreign assets. More comprehensive than ITR-1.

If you are a freelancer or have business income, use ITR-3 or ITR-4 (presumptive taxation).

For FY 2026-27, the ITR forms are notified by the CBDT and available at incometax.gov.in.

Documents to gather before you start

Having these ready before you begin makes the process much faster:

• Form 16 from your employer (Part A and Part B — both issued by the employer and downloaded from TRACES)
• PAN card
• Aadhaar card
• Bank account statements for the full year (to verify interest income, if any)
• Form 16A / 16B / 16C if you received interest, dividends, or rent from which TDS was deducted
• Investment proofs submitted to your employer (for claiming deductions)
• Home loan interest certificate from your bank (Form 16C or statement)
• Health insurance premium receipt (Section 80D)
• Donation receipts (Section 80G)
• NPS contribution receipt (Section 80CCD(1B))
• Details of capital gains transactions from your broker (if you sold shares or mutual funds)
• AIS and Form 26AS from the Income Tax portal — these show all TDS entries already reported against your PAN

Step 1 — Log in to the Income Tax e-filing portal

Go to incometax.gov.in and log in with your PAN as the user ID. Use your registered password or the e-filing OTP to authenticate.

If you do not have an account, click Register on the portal. You need your PAN, Aadhaar, and a valid email address.

Step 2 — Download and review your Form 26AS and AIS

Before filling in the ITR, check your Form 26AS (Annual Tax Statement) and AIS (Annual Information Statement) on the portal.

Form 26AS shows every TDS deduction made against your PAN — by your employer, your bank (on interest), your tenant (if you are a landlord), and any other deductor. Cross-check these entries against your Form 16. If an entry in Form 26AS does not match what your employer deducted, flag it before filing.

AIS shows additional information the department has about your income — equity transactions, high-value bank deposits, GST turnover. Again, verify that the figures match your actual records.

If you find an error in AIS, file a dispute through the AIS portal before filing your return.

Step 3 — Download the applicable ITR form

On the Income Tax portal, go to e-File → Income Tax Returns → File Income Tax Return. Select the Assessment Year (2027-28 for FY 2026-27), the ITR form number, and the filing type (original return, revised return, or belated return).

For a first-time filer, select Original Return.

Step 4 — Fill in the ITR

The online ITR form guides you through six schedules. For salaried employees, the key sections are:

Part A — Personal information:

• Name, PAN, Aadhaar, mobile, email
• Date of birth (as per PAN)
• Residential status (resident/non-resident)
• Bank account details (account number, IFSC — for refund credit)
• Employer details (name, TAN, PAN)

Schedule S — Salary: Enter the gross salary from Form 16 Part B. This includes basic salary + all allowances (HRA, transport, medical, bonus). Your employer has already claimed the standard deduction of ₹75,000 and shown the net salary after all exemptions.

Schedule HP — House Property: Only fill this if you have rental income or a self-occupied house with home loan interest. If you are a pure salaried employee with no house property income, leave this blank.

Schedule SI — Special Income: Enter any income that is taxed at special rates — primarily capital gains. If you have LTCG from equity mutual funds, enter it here (taxed at 12.5% above the ₹1.25 lakh exemption).

Schedule OA — Other Sources: Enter bank interest, dividend income, or any other income not reported elsewhere. Your bank has deducted TDS at 10% on interest above ₹10,000 per year (Section 194A) — this will appear in your Form 26AS.

Schedule TC — Tax Computation: The portal auto-calculates your tax based on the income declared. For the new regime (which is default from FY 2026-27), the slab rates are applied automatically.

Schedule TDS — TDS on salary: Enter the TDS details from your Form 16. The portal will pre-fill based on Form 26AS. If the TDS in your Form 26AS exceeds your actual tax, the excess becomes a refund.

Step 5 — Verify and submit

After completing all schedules, the portal will compute your tax liability.

• If tax is payable: Pay it online using Form 16BC / ITNS 280 ( challan 280) before submitting. The portal accepts net banking, debit card, and UPI.
• If TDS already deducted is more than your tax: The portal shows a refund amount. Enter your bank account details and the refund will be credited after processing.
• If tax and TDS are equal: No payment or refund needed.

Verification options:

You must verify your ITR within 30 days of filing. The portal offers:

• Aadhaar OTP (fastest — takes 1–2 days to process)
• Net banking
• Bank account or Demat account validation
• Digital Signature Certificate (DSC) for companies and LLPs

An unverified return is treated as not filed.

Step 6 — Track your refund

After verification, the ITR is processed by the Centralized Processing Centre (CPC) in Bangalore. For ITRs filed under the new regime with only salary income and TDS, processing typically takes 3–7 days.

Track status at incometax.gov.in under e-File → My Account → View Returns.

Refunds are credited to the bank account you mentioned in the ITR. If the account is not pre-validated on the NPCI mapper, the refund may be sent as a cheque.

Key changes under the Income Tax Act 2025 for FY 2026-27

The new Act (effective 1 April 2026) introduces these changes relevant to salaried filers:

New regime is default: If you do not explicitly opt out, your return is processed under the new regime. The old regime is still available if you have housing loan interest, Section 80C investments, or other reasons to prefer it.

Standard deduction increased to ₹75,000: The standard deduction for all salaried employees under the new regime is ₹75,000 (up from ₹75,000 — it was retained at the same level in the 2025 Act after the old regime had ₹75,000 for pensioners and ₹50,000 for others).

Rebate 87A: Full rebate (zero tax) for taxpayers with total income up to ₹7 lakh under the new regime. If your taxable income is ₹7 lakh or less, you pay zero tax after the rebate.

When to file — due dates for AY 2027-28

Category	Due date
Salaried individuals with no business income (no audit required)	31 July 2027
Businesses requiring audit	31 October 2027
Working partners of firms requiring audit	30 November 2027
Belated return (filed after due date)	Up to 31 December 2027 (with penalty)

Filing after 31 July attracts a penalty of ₹1,000 (₹500 if total income is below ₹5 lakh). Filing after 31 December attracts a higher penalty of ₹5,000.

What happens after you file — ITR processing

The CPC sends an intimation under Section 143(1) to your registered email within 6 months of filing. This intimation either:

• Confirms the return as processed (no issues found)
• Shows a mismatch that has been corrected (with a note explaining the change)
• Asks for additional information

If you disagree with the intimation, you have 30 days to respond through the portal.

Sources

• Income Tax Act 2025 (verified 2026-10-08)
• ITR forms and instructions AY 2027-28 (verified 2026-10-08)
• CBDT circular on ITR filing (verified 2026-10-08)
• Form 26AS and AIS portal (verified 2026-10-08)