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Income Tax Return (ITR) Filing

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Income Tax Return (ITR) Filing under the Income-tax Act, 2025

The Income-tax Act, 2025 marks a historic modernization of India’s direct-tax regime. Coming into effect from 1 April 2026, it replaces the six-decade-old Income-tax Act, 1961 and brings a completely digital, transparent, and simplified system for income declaration, tax computation, and return filing.

In this new legal environment, Income Tax Return (ITR) filing becomes not only a statutory obligation but also a fundamental mechanism for recording income and maintaining financial discipline. Every individual, partnership, LLP, company, trust, or institution earning income in India must disclose their total income, claim eligible deductions, and pay tax according to the new slabs and provisions.

The Government of India, through the Central Board of Direct Taxes (CBDT), has ensured that the new system under the Income-tax Act 2025 is fully integrated with faceless compliance, real-time data verification, and automatic reconciliation through AIS (Annual Information Statement) and TIS (Taxpayer Information Summary).

The objective is clear — to simplify the compliance journey while promoting voluntary disclosure, accuracy, and fairness for every taxpayer.

Understanding ITR Filing under the Income-tax Act 2025

Filing an Income Tax Return means submitting to the government a detailed statement of one’s income, expenditure, deductions, and taxes paid during a financial year. The return acts as both a financial disclosure document and a legal declaration under Section 139 of the new Act.

The Income-tax Act 2025 retains the core principle of self-assessment but strengthens it through technology-driven verification and analytics. Every return filed is automatically cross-checked with third-party data (banks, GSTN, EPFO, registrars, etc.) to ensure accuracy and prevent evasion.

Key Objectives of ITR Filing

  1. Legal Compliance: Every person whose income exceeds the basic exemption limit must file ITR.

  2. Transparency: Returns ensure that income sources are properly disclosed.

  3. Claiming Refunds: Excess TDS or advance tax can only be refunded through ITR.

  4. Carrying Forward Losses: Business and capital losses can be carried forward only when ITR is filed in time.

  5. Proof of Income: ITR serves as an official income proof for loans, visas, and tenders.

  6. Contribution to Nation: Timely filing strengthens fiscal transparency and economic planning.

Evolution of ITR System under the 2025 Act

Under the previous 1961 law, return filing often involved complex forms, manual verification, and long processing cycles.
The Income-tax Act 2025 introduces a more compact framework with:

  • Unified digital portal for all compliance.

  • AI-based pre-filled data from banks, employers, mutual funds, and GST records.

  • Automatic calculation of tax liability and interest.

  • Faceless processing and refund issuance within defined timelines.

  • Reduced number of schedules in ITR forms for simplicity.

The Act empowers taxpayers through automation while ensuring stronger detection of mismatched or undisclosed income.

Who Must File Income Tax Return

Under the Income-tax Act 2025, the following entities are obligated to file returns annually:

  1. Individuals & Hindu Undivided Families (HUFs) whose total income exceeds ₹ 12 lakh (basic exemption limit).

  2. Companies, LLPs, and Firms, irrespective of income or loss.

  3. Charitable Trusts, Societies, and NGOs registered under relevant sections.

  4. Persons holding foreign assets or signing authority abroad.

  5. Residents with income from abroad or through digital assets.

  6. Taxpayers claiming refund, or carrying forward any loss.

The return must be filed electronically through the official e-filing portal using digital signature (DSC) or electronic verification code (EVC).

Classification of ITR Forms under the Income-tax Act 2025

The government has retained seven categories of ITR forms, aligning with different taxpayer types and income sources. Each form corresponds to a specific section of the Act and must be filed accordingly.

Let’s understand all ITR-1 to ITR-7 in detail.

ITR-1 – Sahaj (For Salaried Individuals and Pensioners)

Eligibility:

  • Resident individuals with total income up to ₹ 50 lakh.

  • Income from salary/pension, one house property, and other sources (interest, dividends).

Not Eligible:

  • Income from business/profession, capital gains, multiple properties, or foreign assets.

Key Features:

  • Pre-filled salary and TDS details from Form 16.

  • Auto-calculation of deductions under Chapter VI-A.

  • Simplified refund claim mechanism.

Purpose under 2025 Act:
To provide a single-page, digitally verified return for small taxpayers.

ITR-2 – For Individuals and HUFs (No Business Income)

Eligibility:

  • Individuals and HUFs having income from salary, multiple house properties, capital gains, or foreign sources.

Not Eligible:

  • Business or professional income.

Special Provisions under 2025 Act:

  • Declaration of digital-asset income (cryptocurrency).

  • Automatic indexing of capital-gain computation.

  • Disclosure of overseas assets and foreign tax credits.

ITR-3 – For Individuals and HUFs with Business or Professional Income

Applicable To:

  • Proprietors, freelancers, consultants, and professionals (lawyers, doctors, architects, CAs, etc.).

Features:

  • Comprehensive reporting of business turnover, gross receipts, and expenses.

  • Digital balance sheet, profit & loss account, and depreciation schedule.

  • Integration with GST data for reconciliation.

Under 2025 Act:
The format has been rationalized; separate schedules for presumptive and non-presumptive income are unified for clarity.

ITR-4 – Sugam (Presumptive Income Scheme)

Eligibility:

  • Small businesses and professionals under Sections 44AD, 44ADA, 44AE (updated under the 2025 Act).

  • Individuals, HUFs, and firms with turnover up to the prescribed threshold.

Key Features:

  • Income declared at presumptive percentage (6 % for digital, 8 % for cash).

  • Minimal record-keeping and single-page declaration.

  • Quick filing for small taxpayers.

ITR-5 – For Partnership Firms, LLPs, AOPs, BOIs

Applicable To:

  • Partnership firms and LLPs not filing under ITR-7.

  • Associations of Persons (AOPs) and Bodies of Individuals (BOIs).

Highlights:

  • Mandatory digital signature for submission.

  • Statement of partners’ capital, remuneration, and interest.

  • Disclosure of audit details and depreciation schedule.

New Additions:
Automatic linkage of partner’s income with firm’s return for seamless verification.

ITR-6 – For Companies (Other than Section 8 Companies)

Applicable To:

  • Private Limited and Public Limited companies liable under corporate tax.

Features:

  • Alignment with MCA financial statements.

  • Reporting of dividend income, MAT/AMT, and CSR expenditure.

  • Real-time validation with TDS & TCS databases.

Under the 2025 Act:
Faceless filing, standardized depreciation rates, and mandatory audit upload.

ITR-7 – For Trusts, Charitable Institutions, and Political Parties

Applicable To:

  • Persons claiming exemption under Sections 10, 11, 12, 13A, 13B, etc.

  • Charitable Trusts, NGOs, Universities, Funds, and Political Entities.

Features:

  • Digital filing with audit report in Form 10B/10BB.

  • Disclosure of corpus donations, grants, and utilization.

  • Pre-validation of bank accounts for refund and grants.

Due Dates for Filing Income Tax Returns (Under Income-tax Act 2025)

The Income-tax Act 2025 clearly defines timelines to ensure disciplined compliance.
Filing within the prescribed date helps avoid late fees, interest, and disqualification for loss carry-forward.

Category of Taxpayer Due Date (AY 2026-27 onwards) Remarks
Individual / HUF (non-audit) 31 July following the end of FY Standard due date
Businesses / Firms / LLPs requiring audit 31 October Includes tax audit under Section 44AB
Companies 31 October Along with statutory audit report
Assessees covered under TP (Transfer Pricing) 30 November With Form 3CEB submission
Belated / Revised ITR 31 March next AY Last chance to file or revise
Updated ITR (ITR-U) Within 24 months of relevant AY With 25 % / 50 % additional tax

Process of Filing an ITR under the Income-tax Act 2025

The new Act emphasizes a digital-first, faceless, and data-verified filing mechanism.
Every return passes through four seamless digital layers: preparation, filing, verification, and processing.

  1. Preparation Stage

    • Collect Form 16, 26AS, AIS, TIS, bank statements, and investment proofs.

    • Reconcile all income sources and TDS entries.

    • Choose correct ITR form (1 to 7).

    • Compute total income, deductions, and net tax liability.

  2. Filing Stage

    • Log in to the official e-filing portal using PAN / Aadhaar.

    • Upload return in XML/JSON format generated by online utility.

    • Confirm bank details for refund credit.

    • Submit using Digital Signature Certificate (DSC) or E-Verification Code (EVC).

  3. Verification Stage
    Verification is mandatory within 30 days of submission:

    • Digital Signature: For firms and companies.

    • OTP via Aadhaar: For individuals.

    • Net Banking / EVC: For general taxpayers.
      Non-verification renders the return invalid.

  4. Processing Stage
    The CPC system automatically:

    • Cross-verifies data with AIS, TIS, and TDS databases.

    • Calculates any refund or demand.

    • Sends Intimation u/s 143(1) to the taxpayer electronically.

Revised and Updated Returns

Even under the new Act, human or clerical errors can occur.
Hence, the law retains the facility to file Revised ITR (u/s 139(5)) and Updated ITR (u/s 139(8A)).

Revised Return:

  • Can be filed anytime before the end of the relevant assessment year.

  • Allows correction of income, deduction, or personal details.

Updated Return (ITR-U):

  • May be filed within 24 months of the end of the AY.

  • Enables voluntary disclosure of previously missed income.

  • Attracts 25 % additional tax if filed within 12 months and 50 % if filed within 24 months.

Verification, Rectification & Refunds

After successful processing:

  • If taxes paid > tax payable → Refund issued to pre-validated bank account.

  • If taxes paid < tax payable → Intimation of Demand u/s 143(1) generated.

  • Errors can be rectified through online rectification u/s 154.

Refunds under the 2025 Act are automated through the central refund module and are expected to be credited within 7–15 working days after processing.

Faceless Assessment and Appeals

To strengthen transparency, the Income-tax Act 2025 institutionalizes a faceless compliance ecosystem.
All communications, assessments, and appeals are electronic—no personal hearings, no departmental visits.

Key benefits:

  • Uniform assessment quality nationwide.

  • Minimal discretion and harassment.

  • Timely issue resolution through AI-driven allocation.

  • Secure documentation and communication trail.

Interest, Late Fees & Penalties

Default Relevant Section Penalty / Consequence
Late filing of ITR 234F ₹ 1,000 (if income ≤ ₹ 5 L) or ₹ 5,000 (others)
Late payment of tax 234A / 234B / 234C 1 % interest per month
Failure to file ITR 276CC Prosecution + fine up to ₹ 10 L
Under-reporting of income 270A 50 % of tax under-reported
Mis-reporting of income 270A(8) 200 % of tax misreported

Types of Tax Assessment

The Income-tax Act 2025 preserves the classical framework with modernization:

  1. Summary Assessment (143 (1)) – automatic system-based check.

  2. Scrutiny Assessment (143 (3)) – detailed examination by department.

  3. Best-Judgment Assessment (144) – when return not filed or non-cooperation.

  4. Re-Assessment (147) – income escaped assessment.

  5. Faceless Appeal – digital hearing with CIT(A) and NFAC.

Rectification and Appeal Process

  • Rectification u/s 154: Correcting mistakes apparent on record.

  • Appeal to CIT(A): Filed within 30 days of order.

  • Further Appeal to ITAT / HC / SC: If aggrieved by departmental decision.
    All filings are to be done through the e-Proceedings module.

Refund Process Under the 2025 Act

  • Refunds are auto-generated post 143(1) processing.

  • Credited directly to the pre-validated bank account.

  • Status can be tracked on the refund dashboard.

  • Interest @ 0.5 % per month is payable if refund is delayed beyond 90 days.

Importance of Timely ITR Filing

  1. Avoid Penalties & Interest: Delay invites 234F & 234A.

  2. Ensure Refund Eligibility: Refund processed only on timely ITR.

  3. Carry Forward Losses: Losses allowed only if ITR filed before due date.

  4. Loan & Visa Documents: ITR serves as income proof.

  5. Reputation & Creditworthiness: Regular filers are viewed as compliant citizens.

ITR Filing for Special Entities

For Companies & LLPs

  • Mandatory digital submission using DSC.

  • Audit report u/s 44AB to be filed before 31 Oct.

  • CSR, dividend, and MAT details disclosed in ITR-6.

For Trusts & NGOs

  • File ITR-7 with audit report Form 10B/10BB.

  • Declare utilization of donations & corpus funds.

For Partnership Firms

  • ITR-5 mandatory even if no income.

  • Partners’ share auto-reflected in individual returns.

For Professionals & Freelancers

  • ITR-3 or ITR-4 depending on presumptive scheme.

  • Maintain digital books & invoices for verification.

Integration with Other Laws

The Income-tax Act 2025 is digitally linked with other systems:

  • GSTN: Sales and purchase data cross-verified for business returns.

  • MCA: Company financials auto-imported for audit comparison.

  • PAN–Aadhaar: Compulsory linkage for identity authentication.

  • Bank and Investment Data: AIS auto-fetches dividends, interest, mutual funds.

Future-Ready Features

  • Real-Time AIS Reconciliation before filing.

  • Auto-refund system integrated with RBI.

  • AI-driven error detection for mismatch prevention.

  • Simplified verification via facial and biometric authentication (coming phase 2).

  • Integration with GST and customs for exporters.

Rajasthan Filings – Your Trusted Tax Compliance Partner

At Rajasthan Filings, our expert Chartered Accountants and Tax Advisors provide:

  • Precise analysis of your income and deduction eligibility.

  • End-to-end ITR filing for Individuals, Firms, Companies, Trusts, and NGOs.

  • Assistance for Revised / Updated Returns under Sections 139(5) & 139(8A).

  • Audit support for 44AB and faceless assessments.

  • Refund tracking and rectification of notices.

  • Year-round compliance monitoring and advisory.

We ensure every return filed through Rajasthan Filings is accurate, compliant, and legally sound under the Income-tax Act 2025.

Conclusion

The Income-tax Act 2025 introduces a new era of trust-based, technology-driven taxation.
ITR filing is no longer a paper process but a real-time digital compliance statement of your financial honesty.

By filing on time and accurately, taxpayers strengthen India’s economic transparency and secure their own financial credibility.

With Rajasthan Filings, you can file your Income Tax Return under the new law confidently — accurately, on time, and fully compliant with every requirement of the Income-tax Act 2025.

FAQs on Income Tax Return (ITR) Filing

Income Tax Return

An Income Tax Return (ITR) is a formal declaration of a taxpayer’s total income, deductions, and taxes paid during a financial year. It is submitted to the Income Tax Department as a legal statement of income under the Income-tax Act, 2025.

Every individual, firm, LLP, company, or trust whose total income exceeds the prescribed exemption limit  must file an ITR. Companies and firms must file irrespective of profit or loss.

The Income-tax Act 2025 prescribes seven return forms:

  • ITR-1: For salaried individuals and pensioners.

  • ITR-2: For individuals and HUFs having capital gains or multiple properties.

  • ITR-3: For individuals and HUFs with business or professional income.

  • ITR-4: For presumptive income taxpayers under sections 44AD, 44ADA, or 44AE.

  • ITR-5: For firms, LLPs, AOPs, and BOIs.

  • ITR-6: For companies (except Section 8 companies).

  • ITR-7: For trusts, political parties, and other institutions claiming exemption.

  • 31 July – Individuals and HUFs not requiring audit.

  • 31 October – Businesses, firms, and companies requiring audit.

  • 30 November – Entities involved in transfer pricing.

  • 31 March (next AY) – Belated or revised returns.

  • Within 24 months – Updated ITR (ITR-U) with additional tax.

Under Section 234F of the Act:

  • ₹1,000 penalty if income ≤ ₹5 lakh.

  • ₹5,000 penalty if income > ₹5 lakh.
    Additionally, 1% interest per month applies on unpaid tax under Sections 234A, 234B, and 234C.

Failure to file may result in:

  • Loss of refund and carry-forward benefits.

  • Penalty of 50% to 200% of tax due under Section 270A.

  • Prosecution under Section 276CC for willful default

  • Revised ITR (Section 139(5)): For correcting errors in the original return before 31 March of the relevant assessment year.

  • Updated ITR (Section 139(8A)): For voluntary income disclosure within 24 months, with an additional 25% or 50% tax.

An ITR must be verified within 30 days of filing. Verification options include:

  • Digital Signature Certificate (DSC)

  • Aadhaar-based OTP

  • Electronic Verification Code (EVC) via Net Banking

Refunds can be tracked through the e-filing portal under the “Refund Status” tab. Refunds are credited directly to the pre-validated bank account within 7–15 working days of return processing.

Yes. All returns filed electronically must be verified through DSC, Aadhaar OTP, or EVC for them to be considered valid under the Income-tax Act, 2025.

  • Form 16 or 16A (TDS certificate)

  • Form 26AS, AIS, and TIS

  • Bank statements

  • Investment proofs (80C, 80D, 80G, etc.)

  • Capital gains and property documents

  • Business books of account (if applicable)

AIS (Annual Information Statement) and TIS (Taxpayer Information Summary) display all transactions reported to the tax department by third parties—such as banks, employers, and registrars. Your ITR must reconcile with AIS/TIS to avoid notices or mismatches.

Yes, but only if the ITR is filed before the due date. Delayed filing results in forfeiture of this right under the provisions of the Act.

A faceless assessment is a digital scrutiny system where all communications, hearings, and orders occur online. It ensures transparency, removes personal interaction, and reduces the scope for discretion or bias.

  • Under-reporting: 50% of the tax due.

  • Misreporting (intentional concealment): 200% of the tax due.
    These may attract prosecution for severe violations.

  • Intimation (Section 143(1)): Auto-processed summary showing refund or demand.

  • Assessment (Section 143(3)): Detailed scrutiny by the department based on selected cases.

Yes. You may file a Revised Return under Section 139(5) before 31 March of the relevant AY. If the time limit has expired, you can still disclose income by filing an Updated ITR within 24 months with additional tax.

Rajasthan Filings offers:

  • Complete filing support for ITR-1 to ITR-7.

  • Accurate AIS / TIS reconciliation.

  • Guidance on Revised and Updated ITRs under the 2025 law.

  • Audit and faceless-assessment assistance.

  • Transparent process and nationwide service.

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