Income Tax Return Filing — documents, process and timeline

An income tax return reports a year's income to the department and settles what is owed against what has already been paid through TDS and advance tax. For most people the mechanical part is straightforward; the parts that decide whether the return is right are the form selected, the regime chosen and the reconciliation against what the department already knows.

Form selection matters more than it looks. There are seven ITR forms and each fits a particular combination of income sources. Filing ITR-1 when your facts required ITR-2 or ITR-3 makes the return defective under section 139(9), and a defective return not corrected within fifteen days is treated as never filed — which means late-filing consequences apply to a return you filed on time.

The regime choice is now an annual decision with real money in it. The new regime has lower slab rates and almost no deductions; the old regime has higher rates and allows 80C, 80D, HRA, LTA and home loan interest. Which is cheaper depends entirely on your deductions, and it can flip year to year as your circumstances change. We compute both and file whichever costs less rather than defaulting to whichever you used last year.

The third piece is reconciliation. Form 26AS carries the TDS credited against your PAN; the Annual Information Statement carries far more — interest, dividends, mutual fund and securities transactions, property deals and large cash deposits reported by banks, registrars and companies. Anything in the AIS that is not in your return generates an automated notice. Reconciling before filing is what prevents that.

Filing is not the last step. A return is not valid until it is e-verified, and an unverified return lapses after thirty days and is treated as never filed. We verify as part of the engagement, because the commonest way a refund fails to arrive is a return nobody verified.

The regime decision deserves a closer look than it usually gets, because the default changed. The new regime under section 115BAC is now the default: if you do nothing, that is what applies. Choosing the old regime is an active election, and for someone with business income it can be exercised only once — switch back to the new regime and you cannot return to the old one for as long as you have business income. A salaried taxpayer, by contrast, may choose afresh every year. That asymmetry means the decision carries very different weight depending on who is making it.

A word on what the department already knows before you file. The Annual Information Statement now aggregates reporting from banks, mutual funds, registrars, depositories, employers and credit card companies, and the Taxpayer Information Summary condenses it. Interest of a few thousand rupees from a fixed deposit you forgot, a mutual fund redemption, a property registration — each arrives in the department's hands independently of your return. Filing without reconciling against it is not a risk worth taking, because the mismatch notice is automatic and arrives without a human having formed any view about you.

Finally, if a return has already been filed and something was missed, act rather than wait. A revised return under section 139(5) until 31 December costs nothing beyond the tax actually owed. An updated return in ITR-U after that costs an additional 25% of tax and interest in the first year, rising to 70% by the fourth. Voluntary correction is always cheaper than an assessment, and the gap widens the longer it is left.

Who needs it

Income above the exemption limitCompulsory where gross total income before deductions exceeds ₹2.5 lakh under the old regime or ₹3 lakh under the new — before any 80C or other deduction is applied.
Every company, LLP and firmCompulsory regardless of income or activity. A company with no transactions at all still files, and a nil return is still a return.
Anyone claiming a refundExcess TDS is only refunded through a return. A salaried person below the threshold with TDS deducted has to file to get it back.
Holders of foreign assetsAny resident holding an asset or a signing authority outside India must file, whatever their income, and disclose it in Schedule FA. The penalty for not doing so runs to ₹10 lakh.
High-value transactorsCompulsory if you deposited over ₹1 crore in a current account, spent over ₹2 lakh on foreign travel, or paid over ₹1 lakh in electricity bills in the year — irrespective of income.

Which one applies to you

ITR-1 (Sahaj)Resident individuals with salary, one house property and other income up to ₹50 lakh.
ITR-2Individuals and HUFs with capital gains, more than one house property, or foreign income and assets.
ITR-3Individuals and HUFs with income from a business or profession, including partners in a firm.
ITR-4 (Sugam)Presumptive income under 44AD, 44ADA or 44AE, up to ₹50 lakh total income.
ITR-5 and ITR-6Firms, LLPs and AOPs file ITR-5; companies other than those claiming section 11 exemption file ITR-6.

Why it is worth doing

Losses can be carried forwardBusiness and capital losses carry forward for eight years and set against future profit — but only if the return was filed by the due date. A late return forfeits this, which is usually the largest cost of filing late.
It is the document lenders ask forHome and business loan underwriting runs on filed returns. Two or three years of them is the standard evidence of income for a self-employed applicant.
Visa applications need itMost consulates ask for filed returns as proof of financial standing. It is not something that can be produced retrospectively in the week before an appointment.
Refunds are only paid on a returnExcess TDS sits with the department until claimed, and the claim is the return. There is no other route to it.

What is included

Correct ITR form selected for your sources of income
Computation with old versus new regime comparison
Form 26AS and AIS reconciled against your records
Filing, e-verification and the acknowledgement

What we need from you

PAN and Aadhaar
Form 16 or the books of account
Form 26AS and the Annual Information Statement
Investment and deduction proofs, and bank interest certificates

How it works

Documents and accessForm 16, the books where there is business income, bank statements for every account, and capital gains statements from your broker or fund house.
26AS and AIS reconciliationYour records are matched against what the department has already been told by banks, employers, registrars and brokers. Differences are resolved before anything is filed.
ComputationIncome by head, losses set off and carried forward, and every deduction you are actually entitled to rather than a standard list.
Regime comparisonOld and new computed side by side, with the difference shown in rupees so the choice is yours rather than an assumption.
Review before filingThe computation goes to you with anything unusual flagged. Nothing is filed on your PAN that you have not seen.
File and verifyFiled on the correct form and e-verified within the same engagement, with the acknowledgement delivered.

Old regime or new regime?

	Old regime	New regime
Rates	Higher slabs	Lower slabs
80C, 80D, HRA, LTA	Available	Not available
Standard deduction	₹50,000	₹75,000
Home loan interest (self-occupied)	Up to ₹2 lakh	Not available
Suits	Anyone with substantial deductions	Anyone with few or none
Default	Must be opted into	Applies unless you opt out

What affects the timeline

Completeness of what you sendThe clock starts when the last document arrives, not when the engagement does. A missing capital gains statement holds the whole computation.
Whether the AIS reconcilesWhere the Annual Information Statement shows a transaction you do not recognise, it has to be traced before filing rather than explained to an officer afterwards.
Capital gains complexityA single equity statement is quick. Property, unlisted shares, ESOPs across jurisdictions, or a year of derivative trading each add days.
Whether an audit appliesWhere turnover crosses the 44AB threshold the audit report comes first and the return follows, moving the deadline from 31 July to 31 October.
Portal load near the deadlineThe income tax portal slows materially in the last week of July. Filing in June is the same work at a fraction of the friction.

What happens afterwards

E-verification within thirty daysThe return is not valid until verified. An unverified return lapses and is treated as never filed — the commonest reason a refund never arrives.
Processing intimation under 143(1)A computerised comparison arrives within weeks. If it agrees with your return, nothing is needed; if it raises a demand or adjustment, it needs a response.
Refund credited to a validated accountRefunds only go to a pre-validated bank account linked to your PAN. An unvalidated account is the second commonest reason a refund stalls.
Records kept for the assessment windowKeep supporting documents for at least six years — the period within which an assessment can normally be reopened, longer where foreign assets are involved.
Advance tax for the following yearIf this year's liability exceeded ₹10,000, next year's advance tax instalments start on 15 June.

What usually goes wrong

Filing the wrong formA return on a form that does not fit your income is defective under section 139(9). Uncorrected within fifteen days, the original filing is treated as never made.
Ignoring the AISThe Annual Information Statement carries interest, dividends, securities transactions and property deals reported by third parties. Anything omitted from your return that appears there generates a notice automatically.
Not e-verifyingFiling is not the last step. An unverified return lapses after thirty days, and people discover this when a refund never arrives.
Missing 31 July to save nothingA belated return costs up to ₹5,000 under section 234F and forfeits the right to carry forward business and capital losses — usually worth far more than the fee.

Questions

What is the due date for filing an income tax return?

31 July for non-audit cases and 31 October where the accounts are subject to audit. A belated return can be filed until 31 December with a fee under section 234F, but you lose the right to carry forward most losses.

Old regime or new regime — which is better?

It depends entirely on your deductions. The new regime has lower rates and almost no deductions; the old is better once 80C, 80D, HRA and home loan interest add up. As a rough guide the old regime wins above roughly ₹3.75 lakh of deductions, but we compute both rather than rely on a rule of thumb.

What happens if I miss 31 July?

You can file a belated return until 31 December with a fee of ₹1,000 below ₹5 lakh income and ₹5,000 above it, plus 1% a month interest on unpaid tax. The real cost is that business and capital losses can no longer be carried forward.

Do I have to file if my employer already deducted TDS?

Usually yes. TDS is a payment on account, not a substitute for the return. And if you have other income, or deductions your employer did not account for, the return is the only way to settle the difference or claim a refund.

What is the AIS and why does it matter?

The Annual Information Statement is everything third parties have reported about you — interest, dividends, securities and mutual fund transactions, property deals, large deposits. The department matches your return against it automatically, so anything omitted generates a notice without a human involved.

Can I correct a return after filing?

Yes. A revised return under section 139(5) can be filed until 31 December of the assessment year with no extra tax beyond what was actually owed. After that the route is an updated return in ITR-U, available for four years from the end of the assessment year but carrying additional tax of 25% to 70% — and it cannot be used to claim a refund or increase a loss.

How long should I keep my tax records?

At least six years from the end of the relevant assessment year, which is the normal reopening window under section 148. Where foreign assets or income are involved the window extends to sixteen years, so those records should be kept considerably longer.

What is Form 26AS and how is it different from the AIS?

Form 26AS is the tax credit statement — TDS and TCS deducted against your PAN, and advance tax you paid. The Annual Information Statement is much wider: interest, dividends, securities and mutual fund transactions, property deals and large deposits reported by third parties. The AIS is what generates automated notices, so it is the one to reconcile carefully.

Do I need to file if my income is below the exemption limit?

Not compulsorily on income grounds, but you must file regardless if you hold any foreign asset or signing authority, deposited over ₹1 crore in a current account, spent over ₹2 lakh on foreign travel, or paid over ₹1 lakh in electricity bills. And you should file anyway if TDS was deducted, because a return is the only way to reclaim it.