ITR Filing Checklist for Salaried Employees FY 2025-26 (AY 2026-27)

Filing your income tax return as a salaried employee should be straightforward - but every year, thousands of returns are processed with errors because taxpayers miss a document, select the wrong form, or forget to verify their data. With AY 2026-27 bringing new ITR form changes, including two house properties now allowed in ITR-1 and LTCG reporting up to Rs 1.25 lakh, having a structured checklist before you start filing is more important than ever.

This guide provides a complete, phased checklist - documents to collect before filing, steps during filing, and actions after filing - specifically for salaried employees filing for FY 2025-26.

What Is the ITR Filing Checklist and Why Do Salaried Employees Need One?

An ITR filing checklist is a structured document listing every item - forms, certificates, statements, and decisions - that a salaried employee must gather and verify before, during, and after filing their income tax return. For FY 2025-26 (AY 2026-27), this checklist is essential because the Income Tax Act, 1961 governs this filing (not the new 2025 Act), and the ITR forms have been updated with new disclosure requirements.

For employees managing their own income tax return filing, a checklist prevents the three most common errors: missing income sources visible in AIS, incorrect TDS credit claims, and wrong ITR form selection.

Key Terms You Should Know

• ITR-1 (Sahaj): For resident individuals with total income up to Rs 50 lakh from salary, one or two house properties (new for AY 2026-27), other sources, and LTCG under Section 112A up to Rs 1.25 lakh. The simplest form for most salaried employees.
• ITR-2: For individuals with income above Rs 50 lakh, capital gains exceeding Rs 1.25 lakh, foreign assets, more than two house properties, or NRI status. More detailed than ITR-1.
• Form 16: TDS certificate issued by employer by 15 June 2026 for FY 2025-26. Contains Part A (employer/TDS details) and Part B (salary computation, deductions). This is the last year Form 16 is issued - from Tax Year 2026-27, it becomes Form 130.
• Form 26AS: Annual tax credit statement showing all TDS, advance tax, and refunds. Download from TRACES. For FY 2025-26, this remains Form 26AS (from Tax Year 2026-27, it becomes Form 168).
• AIS (Annual Information Statement): Comprehensive financial transaction statement - salary, interest, dividends, mutual funds, property, foreign remittances. Cross-verify with Form 26AS before filing.
• Section 87A Rebate: New regime: Rs 60,000 rebate for income up to Rs 12 lakh (zero tax). Old regime: Rs 12,500 for income up to Rs 5 lakh.

Who Should Use This Checklist?

• Salaried employees with income from one employer - filing ITR-1
• Salaried employees who changed jobs during FY 2025-26 - need Form 16 from each employer, may need ITR-2 if combined income exceeds Rs 50 lakh
• Employees with rental income from one or two properties - can now use ITR-1 for AY 2026-27 (expanded from one property)
• Salaried individuals with small stock market gains - LTCG under Section 112A up to Rs 1.25 lakh can be reported in ITR-1 (new for AY 2026-27)
• Pensioners receiving pension and interest income - Form 16 issued by pension disbursing authority
• Employees who are company directors - must file ITR-2 or ITR-3 regardless of income level

Individuals filing ITR filing for salary should start collecting documents from June 2026, immediately after receiving Form 16.

Legal Framework: ITR-1 vs ITR-2 - Which Form for Salaried Employees?

Note: For AY 2026-27, ITR-1 has been expanded to allow two house properties and LTCG up to Rs 1.25 lakh. If you previously filed ITR-2 only because of a second property or small LTCG, you may now be eligible for the simpler ITR-1.

Complete ITR Filing Checklist: Step-by-Step Process

Phase 1: Pre-Filing (June 2026 - Collect and Verify)

1. Collect Form 16 from your employer. Your employer must issue Form 16 by 15 June 2026. If you changed jobs during FY 2025-26, collect Form 16 from each employer. Verify that salary, TDS, and PAN details are correct.
2. Download Form 26AS from TRACES. Access via TRACES portal or e-filing portal → Services → View Form 26AS. Match every TDS entry with your Form 16 and Form 16A certificates. Professional TDS return filing verification can identify missing credits before they cause refund delays.
3. Download AIS and TIS from the e-filing portal. Navigate to Services → AIS on incometax.gov.in. Verify all income sources - salary, bank interest, dividends, mutual fund transactions, property deals. Submit feedback for incorrect entries.
4. Gather investment proofs for deductions (old regime). Section 80C: PPF passbook, ELSS statements, LIC receipts, EPF contribution slip (Rs 1.5 lakh max). Section 80D: Health insurance receipts for self/family and parents. Section 80CCD(1B): NPS contribution statement (Rs 50,000 additional).
5. Collect rent receipts and landlord PAN (if claiming HRA). Rent receipts for all 12 months, landlord PAN if annual rent exceeds Rs 1 lakh, rental agreement copy. New for AY 2026-27: ITR forms require landlord relationship disclosure.
6. Gather home loan interest certificate. Section 24(b) certificate from bank/NBFC showing principal and interest breakup. Maximum Rs 2 lakh for self-occupied property under old regime.
7. Compile bank statements and interest certificates. All savings accounts, FD, and RD interest certificates. Cross-verify with AIS - even dormant accounts with small interest are captured.
8. Collect capital gains statements (if applicable). Broker/depository statements for equity shares, mutual fund CAS from CAMS/KFintech. If LTCG under Section 112A is below Rs 1.25 lakh with no carry-forward losses, you can file ITR-1.

Phase 2: During Filing (July 2026 - File and Submit)

1. Choose your tax regime. New regime is default under Section 115BAC. Compare tax liability under both regimes using the portal calculator. If old regime saves more (deductions above Rs 3.75-4.25 lakh), select old regime in the ITR form. Professional tax planning services can model both regimes for your specific income profile.
2. Select the correct ITR form. ITR-1 if total income up to Rs 50 lakh, up to 2 house properties, LTCG up to Rs 1.25 lakh. ITR-2 if above Rs 50 lakh, capital gains exceeding Rs 1.25 lakh, foreign assets, or NRI status. Company directors must file ITR-2 or ITR-3.
3. Log in to the e-filing portal and start filing. Navigate to e-File → Income Tax Returns → File Income Tax Return → Select AY 2026-27 → Choose Online mode. Verify pre-filled data from TIS against your documents.
4. Enter salary details from Form 16. Gross salary, allowances, perquisites, profits in lieu of salary. Verify the pre-filled figures match your Form 16 Part B exactly.
5. Enter house property income. For rented property: annual value minus municipal taxes minus 30% standard deduction minus home loan interest. For self-occupied: nil value minus home loan interest (max Rs 2 lakh).
6. Enter other income sources. Bank interest (savings + FD + RD), dividends, any other income. Cross-check with AIS - missing interest income is the most common mismatch trigger.
7. Enter capital gains (if applicable). LTCG under Section 112A up to Rs 1.25 lakh can be reported in ITR-1. STCG, LTCG above Rs 1.25 lakh, or property capital gains require ITR-2. For investors filing ITR for capital gains, ensure broker statements match AIS data.
8. Claim deductions under Chapter VIA (old regime only). Section 80C (Rs 1.5 lakh max), 80D (Rs 25,000-50,000), 80CCD(1B) (Rs 50,000 NPS), 80E (education loan interest), 80G (donations). New for AY 2026-27: deductions must be selected from detailed drop-down menus with specific clause references.
9. Pay self-assessment tax if applicable. If tax payable exceeds TDS already deducted, pay the balance via challan 280 on the e-filing portal before submitting the ITR.
10. Review the return summary and submit. Cross-check total income, total deductions, tax payable, TDS credit, and refund/demand. Submit only after full verification.

Phase 3: Post-Filing (After Submission)

1. E-verify within 30 days using Aadhaar OTP, net banking, or bank EVC. An unverified return is treated as not filed.
2. Download and save the ITR acknowledgment (ITR-V) for your records.
3. Track processing status on the e-filing portal → Services → View Filed Returns.
4. If a refund is due, verify bank account details linked to your PAN for NEFT credit. Track refund on the portal.
5. If Section 143(1) intimation shows demand - verify the mismatch, pay if correct, or file rectification under Section 154.
6. Preserve all documents (Form 16, investment proofs, bank statements) for at least 6 years in case of future scrutiny.

Documents Checklist: Complete Reference for Salaried Employees

Note: You do not need to upload these documents while filing. However, you must retain them for at least 6 years - they may be required if your return is selected for scrutiny or if a notice is issued.

New Changes in ITR Forms for AY 2026-27 That Salaried Employees Must Know

Common Mistakes Salaried Employees Make During ITR Filing

Mistake 1: Selecting the wrong ITR form. Filing ITR-1 when you should file ITR-2 (capital gains above Rs 1.25 lakh, foreign assets, income above Rs 50 lakh) results in a defective return notice. Conversely, filing ITR-2 when ITR-1 suffices means unnecessary complexity. Use the form selection guide above. For investors with ITR for capital gains, the Rs 1.25 lakh LTCG threshold is the key decision point.

Mistake 2: Not reconciling Form 16 with Form 26AS and AIS before filing. If TDS in your Form 16 does not match Form 26AS, your TDS credit will be reduced during processing - resulting in additional demand. If income in AIS is not declared in your ITR, Section 143(1) intimation with demand is almost certain. Always reconcile all three documents before filing.

Mistake 3: Forgetting to declare bank interest income. AIS captures interest from every bank account linked to your PAN - including accounts you rarely use. The most common mismatch is unreported FD interest from a dormant account. Check AIS for all interest entries and declare them under "Income from Other Sources."

Mistake 4: Not choosing the optimal tax regime. The new regime is default but not always optimal. If your deductions (80C + 80D + HRA + home loan) exceed Rs 3.75-4.25 lakh, the old regime may save significantly more tax. Run both calculations before selecting.

Mistake 5: Filing without e-verification. Submitting the ITR is not the end - you must e-verify within 30 days using Aadhaar OTP, net banking, or bank EVC. An unverified return is treated as not filed, which means you are technically non-compliant even though you submitted the form.

Penalties for Late Filing or Errors

Missing the 31 July 2026 deadline for ITR-1/2 triggers Section 234F late fee of Rs 5,000 (Rs 1,000 if income below Rs 5 lakh). Interest under Section 234A at 1% per month applies on unpaid tax from 1 August 2026 until filing date.

Filing a defective return (wrong form, missing schedule, incorrect data) triggers a notice under Section 139(9) with 15 days to rectify. If not rectified, the return is treated as invalid.

Non-disclosure of income visible in AIS can trigger Section 143(1) intimation with additional demand plus interest. In severe cases, penalty of up to 200% of tax on concealed income under Section 270A may be levied.

Belated return can be filed until 31 December 2026 with late fee. Revised return deadline extended to 31 March 2027 (with Section 234I fee after 31 December).

How ITR Filing Connects With the New Income Tax Act 2025

Your FY 2025-26 ITR filing in July 2026 is governed entirely by the Income Tax Act, 1961. However, this is the last filing season under the old Act. From Tax Year 2026-27, the Income Tax Act, 2025 takes over - bringing new section numbers, new form names (Form 130 replaces Form 16, Form 168 replaces Form 26AS), and the Tax Year concept replacing FY/AY.

For professional TDS return filing and payroll teams, this means the Form 16 issued in June 2026 is the last ever Form 16. From June 2027, employees will receive Form 130. Building good reconciliation habits now will make the transition to the new framework significantly smoother.

The e-filing portal at incometax.gov.in supports both Acts simultaneously. When filing for AY 2026-27 (FY 2025-26), select forms under "Income-tax Act, 1961" on the portal. The new Act forms will be available separately for Tax Year 2026-27 filing from April 2027.

ITR Filing Timeline for Salaried Employees: Key Dates

Key Takeaways

Salaried employees filing for FY 2025-26 (AY 2026-27) must file ITR-1 or ITR-2 by 31 July 2026 under the Income Tax Act, 1961. This is the last filing season under the old Act.

The essential documents are: Form 16 (by 15 June 2026), Form 26AS, AIS/TIS, bank interest certificates, 80C/80D proofs, rent receipts with landlord PAN, and home loan interest certificate.

New for AY 2026-27: ITR-1 now allows two house properties and LTCG up to Rs 1.25 lakh under Section 112A. Deductions require detailed drop-down selection, and HRA claims need landlord relationship disclosure.

Always reconcile Form 16 with Form 26AS (for TDS credits) and AIS (for income completeness) before filing. Missing income visible in AIS triggers automated Section 143(1) demand notices.

E-verify within 30 days of filing. An unverified return is treated as not filed - negating all the effort of collecting documents and completing the form.

Need Help with Income Tax Return Filing?

A structured checklist is the foundation of error-free ITR filing. From collecting Form 16 to reconciling AIS, choosing the right regime, and e-verifying after submission - each step matters. Professional assistance ensures complete compliance, maximum deductions, and smooth processing.

Explore our income tax return filing services for end-to-end support.

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