If this is your first Income Tax Return, the process can seem daunting - forms, schedules, regime choices, TDS, deductions. This guide is written specifically for first-time filers and explains everything in plain language, step by step.
Do You Even Need to File an ITR?
You must file an ITR in India for FY 2025-26 if any of the following apply:
- Your total income exceeds Rs 3 lakh (new tax regime basic exemption limit)
- TDS was deducted on your income - file to claim refund
- You have capital gains from stocks, mutual funds, or property
- You hold foreign assets or have foreign income
- You deposited more than Rs 1 crore in bank accounts during the year
- You spent more than Rs 2 lakh on foreign travel
Even below the taxable limit, filing voluntarily builds your financial record for loans and visa applications, and lets you claim refunds on TDS deducted.
Key Terms Explained
| Term | What It Means |
|---|---|
| FY (Financial Year) | The year you earned the income - 1 April 2025 to 31 March 2026 |
| AY (Assessment Year) | The year you file - AY 2026-27 (reporting FY 2025-26 income) |
| TDS | Tax Deducted at Source - tax already deducted by employer/bank/clients |
| PAN | Permanent Account Number - your tax identity |
| ITR Form | The specific form you use depending on your income type |
| e-Filing | Filing your ITR online at incometax.gov.in |
| e-Verification | Confirming your filed return using Aadhaar OTP or net banking |
| Form 16 | TDS certificate from your employer - the starting document for salaried filers |
| Form 26AS / AIS | Tax passbook - shows all TDS deducted and income reported in your PAN |
Step 1: Link PAN and Aadhaar
If your PAN and Aadhaar are not linked, do this first. An unlinked PAN becomes inoperative and you cannot file an ITR. Link at incometax.gov.in > Quick Links > Link Aadhaar. A Rs 1,000 fee may apply for late linking.
Step 2: Collect Your Documents
- Form 16 from your employer - available by 15 June 2026
- Bank statements for FY 2025-26 - to report interest income
- Form 26AS and AIS from the tax portal - to verify TDS credits
- Investment proofs - LIC, PPF, ELSS, health insurance
Step 3: Choose Your ITR Form
As a first-time filer with salary income and basic investments, you will most likely need ITR-1 (Sahaj). If you have capital gains or multiple income sources, you may need ITR-2. The tax portal suggests the correct form after you answer a few questions.
Step 4: New Tax Regime or Old Tax Regime?
For FY 2025-26, the New Tax Regime is the default. It offers lower rates but removes most deductions. The Old Regime allows 80C, 80D, HRA, and home loan interest deductions, but at higher rates. The portal computes tax under both - compare before choosing.
Step 5: File Online - Step by Step
- Go to incometax.gov.in and register with your PAN
- Log in and go to e-File > Income Tax Returns > File Income Tax Return
- Select AY 2026-27 and ITR-1 (or as applicable)
- Review pre-filled data from Form 26AS - check salary, TDS, interest
- Add investments and deductions under Chapter VI-A
- Choose your tax regime and review tax computation
- Pay any balance tax using Challan 280
- Submit and e-Verify within 30 days using Aadhaar OTP
Filing Deadline for First-Time Filers (Salaried)
Your deadline is 31 July 2026. Filing after this date attracts a late fee of Rs 1,000 (income up to Rs 5 lakh) or Rs 5,000 (income above Rs 5 lakh) under Section 234F. You can still file a belated return up to 31 December 2026.
Top 5 Mistakes First-Time Filers Make
- Not e-verifying after filing - the return is not valid until e-verified
- Using the wrong ITR form for their income type
- Not reporting interest income from savings/FDs - AIS captures this automatically
- Forgetting to claim eligible deductions - leaving refund money on the table
- Mismatching Form 16 figures with self-entered data
About the author
Deepak
Senior Advisor at Regikart. Want to discuss this in the context of your business?
