How to file your income tax return

Form 26AS is the tax credit statement: it shows TDS deducted on your behalf, advance tax and self-assessment tax paid, and refunds issued. Download it from the e-filing portal. This is what the department already knows it has received from you.

The Annual Information Statement (AIS) is broader and more important. It reports interest from banks, dividends, securities transactions, mutual fund purchases and redemptions, foreign remittances, property transactions and high-value spending. The Taxpayer Information Summary (TIS) is its condensed version.

Form 16 is what your employer gives you, summarising salary and TDS. It is useful but incomplete — it says nothing about bank interest, capital gains or any other income, and treating it as the whole picture is the single commonest filing error among salaried people.

Read the AIS carefully and use the feedback mechanism if something is wrong. You can mark an entry as incorrect, duplicated, or belonging to someone else, and the reporting entity is asked to confirm. Unexplained entries left uncorrected are what trigger notices.

Also gather: bank interest certificates, capital gains statements from your broker or mutual fund, home loan interest and principal certificates, rent receipts if claiming HRA, and proof of any deductions you intend to claim.

Filing the wrong form makes the return defective, and the department issues a notice under section 139(9) requiring you to correct it within a set period. It is not fatal but it is avoidable.

The most frequent mistake is a salaried person with a small capital gain — a few shares sold, or a mutual fund redeemed — filing ITR-1 out of habit. Any capital gain moves you to ITR-2.

Freelancers and consultants generally use ITR-3, or ITR-4 if opting for presumptive taxation, which allows declaring a prescribed percentage of receipts as income without maintaining full books.

The portal's own guidance asks a short series of questions and recommends a form, which is worth using if you are unsure.

Log in at incometax.gov.in with your PAN as the user ID. If you have never registered, do that first — it needs your PAN, a mobile number and an email.

Pre-validate your bank account under Profile, and enable it for refund. A refund cannot be issued to an account that is not pre-validated and linked to your PAN, and this is a frequent cause of refunds that never arrive.

Go to e-File, Income Tax Returns, File Income Tax Return. Choose the assessment year — remember it is one year ahead of the financial year you are reporting — and the filing type.

Choose your tax regime. The new regime is the default; you can opt for the old regime if it is better for you, and salaried taxpayers can generally switch each year while those with business income are more restricted.

Review the pre-filled data against Form 26AS and AIS line by line. Add anything missing — bank interest is the item most often omitted, and it is fully visible to the department through AIS, so omitting it is both wrong and detectable.

Claim your deductions. Under the old regime these include the standard deduction, section 80C investments, 80D health insurance, 80CCD(1B) NPS, 80TTA or 80TTB savings interest, HRA and home loan interest. Under the new regime most of these are unavailable, which is precisely the trade-off between the two.

Check the computed tax, pay any balance as self-assessment tax through the portal, and submit.

A submitted return is not a filed return until it is verified. You have 30 days from submission, and an unverified return is treated as though it was never filed at all — with all the consequences of non-filing, including late fees and loss of the right to carry forward losses.

The fastest method is Aadhaar OTP, which requires your mobile to be linked to Aadhaar. Net banking, a pre-validated bank account EVC, a demat account EVC and a digital signature certificate all also work.

The physical alternative — signing ITR-V and posting it to CPC Bengaluru — still exists but is slow and unnecessary for almost everyone.

After verification, the return goes for processing. Most are processed under section 143(1), producing an intimation that either agrees with your computation, adjusts it, or raises a demand. Read it: an intimation raising a demand has a response deadline.

Refunds are credited directly to your pre-validated bank account. Track the status on the portal; the commonest causes of delay are an unvalidated account, a name mismatch between PAN and bank records, and an inoperative PAN.

If you realise you made a mistake, file a revised return under section 139(5) — it is free and available until the deadline for the assessment year. If that window has closed, ITR-U allows an updated return with additional tax, but cannot be used to claim a refund or reduce your liability.

Missing the due date does not mean you cannot file. A belated return under section 139(4) is allowed with a late fee under section 234F, plus interest on any unpaid tax. The real cost is that you lose the right to carry forward most losses.

Even with no tax payable, filing is worth doing. It is required if your income exceeds the basic exemption limit before deductions, and separately if you meet certain conditions such as high electricity spending, foreign travel spending, large deposits, or holding foreign assets. It is also the document banks, visa authorities and lenders ask for.

If TDS has been deducted from you but you have no tax liability, filing is the only way to get it back. Very large numbers of small refunds go unclaimed every year for this reason.

Notices are not automatically alarming. Section 143(1) intimations are routine processing outcomes. Section 139(9) means a defective return needing correction. Section 143(2) is a scrutiny notice and is more serious. All appear in the portal under Pending Actions, and all have deadlines — respond through the portal rather than ignoring them.

You do not need to pay anyone to file. The portal is free, offline utilities are free, and for straightforward cases there is nothing an intermediary does that you cannot. A chartered accountant is genuinely worth it for business income, capital gains complexity, foreign assets or a scrutiny notice.

Keep your documents for the statutory period — the department can reopen assessments within prescribed time limits, and the burden of showing what you claimed sits with you.