Why ITR Should Be Filed for FY 2025-26

Filing an Income Tax Return is not only a statutory requirement in many cases, but also an important financial record for individuals, businesses, NRIs, pensioners, firms and companies. For income earned during FY 2025-26, the return will be filed for AY 2026-27 under the Income-tax Act, 1961.

Who Should File ITR?

As per Section 139(1) of the Income-tax Act, 1961, ITR filing is required where income exceeds the prescribed basic exemption limit, or where the person falls under mandatory filing categories.

1. Individuals and Salaried Taxpayers

For AY 2026-27, the new tax regime under Section 115BAC is the default regime for individuals, HUFs, AOPs, BOIs and Artificial Juridical Persons. Under the new regime, income up to ₹4,00,000 is taxed at Nil, and resident individuals may be eligible for rebate under Section 87A where taxable income does not exceed ₹12,00,000.

However, ITR filing is still advisable even where tax payable is Nil, especially for:

• Claiming refund of TDS/TCS

• Maintaining income proof for loans, visas and financial records

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• Reporting capital gains, foreign assets or high-value transactions

• Carrying forward eligible losses, where permitted

1. Firms and LLPs

Partnership firms and LLPs are separate taxable persons. LLPs and firms are generally required to file ITR-5. Eligible resident firms, other than LLPs, declaring presumptive income under Sections 44AD, 44ADA or 44AE may use ITR-4, subject to conditions.

1. Companies

Companies are required to file ITR even if there is no business activity, no profit or a loss. As per the Income Tax Department guidance, ITR-6 applies to companies other than those claiming exemption under Section 11.

1. NRIs

NRIs should file ITR in India if they have taxable income in India, such as salary received in India, rental income, capital gains, interest income or business income. Filing also helps claim refund of excess TDS and maintain Indian tax compliance records.

1. Pensioners and Senior Citizens

Pension is generally taxable as salary income. Pensioners should file ITR where income exceeds the applicable threshold or where TDS refund, bank records, capital gains, interest income or other disclosures are involved. Under the new regime, salaried taxpayers and pensioners are eligible for standard deduction up to ₹75,000.

Key Compliance Points for FY 2025-26

• New tax regime is the default regime under Section 115BAC.

• Business taxpayers opting out of the new regime must file Form 10-IEA within the due date under Section 139(1).

• Belated return for AY 2026-27 may be filed under Section 139(4) up to 31 December 2026, subject to applicable late fee under Section 234F.

• Late filing fee under Section 234F can be ₹1,000 where total income does not exceed ₹5,00,000 and ₹5,000 in other cases.

Conclusion

ITR filing creates a reliable financial record, supports refund claims, ensures statutory compliance and avoids future tax notices. Taxpayers should review Form 26AS, AIS, TIS, bank statements and investment records before filing.

For expert guidance on this topic, contact your tax professional today.