Understanding Income Tax Return Filing: Who Needs to File and Is It Mandatory for Salaried Taxpayers?
Filing income tax returns (ITR) is a statutory requirement for many taxpayers in India, and the deadline for salaried individuals for the assessment year 2026-27 is July 31, 2026. Even if a taxpayer’s income falls below the mandatory filing threshold, they may still need to file an ITR due to various factors. Understanding these requirements is crucial for compliance and financial record-keeping.
Who Should File ITR & Is It Mandatory for Salaried Employees?
ITR filing is essential for individuals whose total income exceeds the basic exemption limit. Parizad Sirwalla, Partner and Head – Global Mobility Services, Tax, KPMG in India, notes that for the financial year 2025-26, the basic exemption limit is set at Rs 2.5 lakh for individuals under 60 years of age under the old tax regime, and Rs 4 lakh under the new regime. However, even if income is below these limits, filing may still be necessary in certain situations, such as high-value transactions or claiming refunds for excess tax deducted at source (TDS).
Many salaried employees mistakenly believe that TDS deduction by their employer eliminates the need to file an ITR. Sirwalla clarifies that TDS is merely a tax collection mechanism and does not replace the obligation to file a return when required. Filing an ITR allows taxpayers to reconcile income from various sources, claim eligible deductions, and ensure accurate reporting of taxes paid throughout the year.
Filing ITR Online
The online filing process has been streamlined through the government’s e-filing portal (incometax.gov.in/iec/foportal/). Taxpayers can log in using their Permanent Account Number (PAN), select the appropriate ITR form, and review pre-filled information from employers, banks, and other entities. Sirwalla emphasizes the importance of verifying and updating details, including additional income, deductions, and investments in foreign assets, as necessary.
Once the return is completed, taxpayers can submit it electronically and verify it using Aadhaar OTP, net banking, or other prescribed methods. Successful verification is essential for the filing process to be considered complete. Timely ITR filing not only helps avoid penalties but also establishes a credible financial record, which can be beneficial for loan applications and visa processing.
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