Income Tax Return (ITR) Filing in India

Any individual whose gross total income exceeds the basic exemption limit must file, and that test is applied before Chapter VI-A deductions and before the Section 54-series reinvestment exemptions - so a fully reinvested property or share gain still triggers the obligation. Every company and every firm, including an LLP, must file each year regardless of income, loss or dormancy. Filing is also mandatory for a resident and ordinarily resident holding foreign assets or signing authority abroad, and for persons covered by the seventh proviso to Section 139(1) or Rule 12AB. Anyone claiming a refund or carrying forward a loss must also file.

For individuals and entities not subject to tax audit, the due date is 31 July of the assessment year. Audit cases have until 31 October, and cases requiring a transfer pricing report in Form 3CEB until 30 November. Where Section 44AB applies, the audit report itself is due by 30 September - one month before the return - and a delay attracts penalty under Section 271B. CBDT occasionally extends these dates, but do not plan around an extension.

ITR-1 (Sahaj) suits a resident individual with total income up to Rs 50 lakh from salary, one house property and other sources, with agricultural income up to Rs 5,000; from AY2025-26 it also allows long-term capital gains under Section 112A up to Rs 1.25 lakh, provided there is no brought-forward or carried-forward capital loss. ITR-4 (Sugam) applies to a resident individual, HUF or firm other than an LLP with total income up to Rs 50 lakh under Sections 44AD, 44ADA or 44AE, on the same capital gains condition and only where there is not more than one house property. Crucially, a director in any company, or anyone who held unlisted equity shares at any time during the year - including ESOPs or sweat equity in a private limited company - cannot use ITR-1 or ITR-4 at all, and nor can a taxpayer with ESOP tax deferred under Section 191(2). ITR-2 covers capital gains, multiple properties and foreign assets; ITR-3 business or professional income; ITR-5 firms and LLPs; ITR-6 companies; ITR-7 trusts and institutions.

You can file a belated return up to 31 December of the assessment year, with a Section 234F fee of up to Rs 5,000, reduced to Rs 1,000 where total income does not exceed Rs 5 lakh, plus interest under Section 234A on unpaid tax. Business and capital losses cannot then be carried forward. The costliest consequence is often overlooked: the old regime can be chosen only in a return furnished by the Section 139(1) due date, so file even a day late and you are taxed under the default Section 115BAC regime for that year, losing 80C, 80D, HRA and other old-regime deductions no matter what proofs you hold.

Yes, through an updated return under Section 139(8A). The Finance Act 2025 extended the window from 24 months to 48 months from the end of the relevant assessment year, with additional tax of 25% and 50% of aggregate tax and interest in the first and second year, and 60% and 70% in the third and fourth. It cannot be used to claim a refund, report a loss or reduce liability. It is also barred where a search under Section 132, a requisition under Section 132A or a survey under Section 133A has been initiated, where any assessment, reassessment, revision or recomputation proceeding is pending or completed for that year, and where a notice under Section 148A has been issued after 36 months from the end of the relevant assessment year, unless the Section 148A(3) order records that it is not a fit case. Only one updated return may be filed per assessment year, and it must be accompanied by proof of payment of tax, interest, the Section 234F fee and the additional tax.

No. The Section 115BAC regime has been the default since AY2024-25, but you may opt out and be taxed under the old regime, provided you do so in a return filed by the Section 139(1) due date. A salaried or other non-business taxpayer exercises the choice each year inside the return itself, with no separate form. A taxpayer with business or professional income must file Form 10-IEA by the due date to opt out, and may switch back only once.

For AY2026-27, a resident individual under Section 115BAC gets a Section 87A rebate of up to Rs 60,000 where total income does not exceed Rs 12 lakh, with marginal relief just above that threshold, and the basic exemption limit is Rs 4 lakh. For a salaried taxpayer the effective break-even rises to about Rs 12.75 lakh after the Rs 75,000 standard deduction. The rebate is computed only on normal-rate income: special-rate income such as Sections 111A, 112A, 115BB and 115BBH (virtual digital assets at 30%) is excluded. Non-residents get no Section 87A rebate under either regime.

Broadly, when business turnover exceeds Rs 1 crore, raised to Rs 10 crore where both cash receipts and cash payments are 5% or less of the respective totals. For professionals the threshold is gross receipts exceeding Rs 50 lakh. A separate trigger applies to a taxpayer who has opted into presumptive taxation, later declares income below the presumptive rate and has total income above the exemption limit.

Section 44AD is available only to a resident individual, HUF or partnership firm - not to an LLP, company, AOP or non-resident - with turnover up to Rs 2 crore, extended to Rs 3 crore where cash receipts are 5% or less of total receipts. It is unavailable to agency, commission and brokerage businesses, to persons covered by Sections 44AE, 44BB or 44BBB, and to anyone claiming deduction under Section 10AA or Part C of Chapter VI-A in that year. The Section 44AD(4) and (5) lock-in also applies: opt in, then opt out, and you are barred for the next five years and must maintain books and get audited if income exceeds the exemption limit. Section 44ADA covers specified professionals with gross receipts up to Rs 50 lakh, extended to Rs 75 lakh on the same cash condition.

Schedule FA and Schedule FSI reporting, and the fourth-proviso filing obligation attached to foreign assets, apply only to a person who is resident and ordinarily resident. A resident but not ordinarily resident - the status most returning NRIs and inbound founders hold for their first two to three years - and a non-resident are outside that requirement and file only on the strength of their Indian income or other triggers. Once ROR status begins, disclosure is not optional: Section 43 of the Black Money Act carries a penalty of Rs 10 lakh for non-disclosure of a foreign asset.