Income Tax Return (ITR) Filing Guide for F.Y. 2025-26 (A.Y. 2026-27): Slab Rates, ITR Forms, Old vs New Tax Regime & Return Filing Process

Introduction

Income Tax Return (ITR) filing is an important compliance requirement for taxpayers in India. Filing an accurate return helps taxpayers claim refunds, carry forward losses, maintain financial records, and comply with the provisions of the Income Tax Act, 1961. This guide explains the income tax slab rates applicable for Financial Year (F.Y.) 2025-26 (Assessment Year 2026-27), available ITR forms, the filing process, and a comparison between the Old and New Tax Regime. What is an Income Tax Return (ITR)? An Income Tax Return (ITR) is a form through which taxpayers report their income, deductions, taxes paid, and tax liability to the Income Tax Department. ITR filing is mandatory for individuals and entities whose income exceeds the prescribed exemption limits or who satisfy specific filing conditions under the Income Tax Act. Income Tax Slab Rates for F.Y. 2025-26 (A.Y. 2026-27) New Tax Regime (Default Regime) Annual Income| Tax Rate Up to ₹4,00,000| Nil ₹4,00,001 – ₹8,00,000| 5% ₹8,00,001 – ₹12,00,000| 10% ₹12,00,001 – ₹16,00,000| 15% ₹16,00,001 – ₹20,00,000| 20% ₹20,00,001 – ₹24,00,000| 25% Above ₹24,00,000| 30% Rebate under Section 87A Individuals opting for the New Tax Regime can avail rebate up to ₹60,000 if their taxable income does not exceed ₹12 lakh (subject to applicable conditions). Old Tax Regime Annual Income| Tax Rate Up to ₹2,50,000| Nil ₹2,50,001 – ₹5,00,000| 5% ₹5,00,001 – ₹10,00,000| 20% Above ₹10,00,000| 30% Rebate under Section 87A Resident individuals with taxable income up to ₹5 lakh can claim rebate up to ₹12,500. Old Regime vs New Regime Old Tax Regime Advantages - Claim deductions under Section 80C up to ₹1.5 lakh. - Deduction for Medical Insurance under Section 80D. - Home Loan Interest Benefit. - HRA Exemption. - Leave Travel Allowance (LTA). - Various exemptions and deductions available. Suitable For Taxpayers having substantial investments, insurance premiums, home loans, HRA benefits, and other eligible deductions. New Tax Regime Advantages - Lower tax rates. - Simplified tax structure. - Less documentation. - Faster tax calculation. - Beneficial for salaried employees with limited deductions. Suitable For Individuals who do not claim significant deductions and exemptions. Example of Tax Calculation Case 1: Income ₹12,00,000 Under New Regime Tax liability may become Nil after applicable rebate under Section 87A (subject to conditions). Under Old Regime Taxpayer can reduce tax liability only after claiming eligible deductions such as: - Section 80C - Section 80D - Home Loan Interest - HRA Exemption Without sufficient deductions, tax liability may be higher compared to the New Regime. Which Tax Regime is Better? There is no universal answer. Choose Old Regime if: - You invest under Section 80C. - You claim HRA exemption. - You pay housing loan interest. - You claim multiple deductions. Choose New Regime if: - You do not have major deductions. - You want a simplified tax structure. - Your income is primarily salary income without tax-saving investments. Taxpayers should compare tax liability under both regimes before filing the return. Types of ITR Forms ITR-1 (Sahaj) Applicable for Resident Individuals having: - Salary Income - One House Property - Other Sources Income - Total Income up to ₹50 lakh ITR-2 Applicable for Individuals and HUFs having: - Capital Gains - More than One House Property - Foreign Assets - Income above ₹50 lakh ITR-3 Applicable for: - Proprietorship Business - Professionals - Business Income - Partnership Income ITR-4 (Sugam) Applicable for: - Presumptive Taxation Scheme - Small Businesses - Freelancers - Professionals under Sections 44AD, 44ADA, and 44AE ITR-5 Applicable for: - LLPs - Partnership Firms - AOPs - BOIs ITR-6 Applicable for Companies other than those claiming exemption under Section 11. ITR-7 Applicable for: - Trusts - Charitable Institutions - NGOs - Political Parties - Educational Institutions claiming exemptions Documents Required for ITR Filing Salaried Individuals - PAN Card - Aadhaar Card - Form 16 - Salary Slips - Bank Statements - Investment Proofs - Interest Certificates Business Owners - PAN & Aadhaar - Books of Accounts - GST Returns - Profit & Loss Account - Balance Sheet - Bank Statements How to File Income Tax Return? Step 1 Collect all income-related documents. Step 2 Determine the correct ITR form. Step 3 Calculate total income from all sources. Step 4 Claim eligible deductions and exemptions. Step 5 Compare tax liability under Old and New Regime. Step 6 File the return online through the Income Tax Portal. Step 7 Verify the return using: - Aadhaar OTP - Net Banking - Demat Account - Bank Account EVC Benefits of Filing ITR - Claim income tax refunds. - Easier loan approvals. - Visa application support. - Proof of income. - Carry forward business and capital losses. - Compliance with legal requirements. Conclusion Choosing the correct tax regime and filing the appropriate ITR form is essential for tax compliance and tax savings. Taxpayers should evaluate their income, investments, deductions, and financial goals before selecting between the Old and New Tax Regime. Timely filing of Income Tax Returns helps avoid penalties and ensures smooth financial planning. For professional assistance with Income Tax Return filing, tax planning, business taxation, and compliance services, contact Simplex Filing.