ITR Filing for Beginners in India: Which Form and Regime

Arjun, a 23-year-old from Jaipur, got his first salary in April. In July his office accounts team asked him for a PAN, a bank statement and "the ITR acknowledgement". He nodded, then spent that evening searching on his phone, and found five different forms, two tax regimes and a deadline that seemed to move every year. If that sounds familiar, this guide is for you. ITR filing for beginners need not be frightening, and in this article we explain it the way we do in our NIFM accounting and taxation classes: plain words, rupee examples and named sources.

What is an income tax return, and why does it matter?

An income tax return, or ITR, is a form in which you tell the Income Tax Department how much you earned in a financial year, what deductions you claim, how much tax you have already paid, and what is left to pay or get back. The financial year runs from 1 April to 31 March, and the year after it, in which you file, is called the assessment year. Income earned in FY 2025-26 (April 2025 to March 2026), for example, is reported in assessment year 2026-27 (Source: Income-tax Act, 1961, section 2).

Many beginners think the return is only for people who owe tax. It is not. The return is also your financial identity document. Banks ask for the last two or three years of returns when you apply for a home or education loan. Visa offices ask for them. A refund of excess TDS can only be claimed through a return. And if you ever trade in shares, a return is how you carry forward a loss to set off against future gains, which is allowed only if the return is filed on time (Source: Income-tax Act, 1961, sections 80 and 139).

Who is required to file?

The basic rule is simple. If your total income before claiming deductions such as section 80C crosses the basic exemption limit, you must file. For FY 2025-26, that limit is Rs 4 lakh under the new tax regime. Under the old regime it is Rs 2.5 lakh for individuals below 60 years, Rs 3 lakh for senior citizens and Rs 5 lakh for super senior citizens (Source: Finance Act, 2025; Income-tax Act, 1961, First Schedule).

There are also situations where you must file even if your income is below that limit. Section 139(1) lists some of them, such as depositing more than Rs 1 crore in current accounts, spending more than Rs 2 lakh on foreign travel, or paying an electricity bill of more than Rs 1 lakh in a year, and holding assets outside India (Source: Income-tax Act, 1961, section 139(1), provisos). These are not common for a fresher, but it is useful to know that the rule is wider than "do I owe tax".

Which ITR form should a beginner use?

This is the question that confuses most first-time filers, and the answer depends on the nature of your income, not on your designation. The Income Tax Department notifies separate forms, and choosing the wrong one can lead to a defective return notice under section 139(9). Here is how the four forms used by individuals work in broad terms.

• ITR-1 (Sahaj) is for a resident individual whose total income is up to Rs 50 lakh and comes from salary or pension, one house property and other sources such as bank interest. Agricultural income must not exceed Rs 5,000. From assessment year 2025-26, long-term capital gains under section 112A up to Rs 1.25 lakh are also allowed in ITR-1, subject to conditions (Source: CBDT ITR notification, 2025).
• ITR-2 is for individuals and HUFs with no business or professional income, but with capital gains beyond the ITR-1 limits, more than one house property, foreign assets, or income above Rs 50 lakh.
• ITR-3 is for individuals and HUFs with income from a business or profession who do not opt for the presumptive scheme, for example a trader whose share-market income is treated as business income, or a consultant who maintains full books.
• ITR-4 (Sugam) is for residents, HUFs and firms (other than LLPs) with total income up to Rs 50 lakh who opt for presumptive taxation under sections 44AD, 44ADA or 44AE (Source: Income-tax Act, 1961; CBDT ITR notification, 2025).

A word on presumptive taxation

Presumptive taxation exists so that small businesses and professionals need not maintain detailed books. Under section 44AD, an eligible business can declare 8% of turnover as income, or 6% for digital receipts, if turnover is up to Rs 3 crore and cash receipts do not exceed 5% of the total. Under section 44ADA, specified professionals such as doctors, lawyers, architects and accountants can declare 50% of gross receipts as income, with a limit of Rs 75 lakh if cash receipts are within 5% (Source: Income-tax Act, 1961, sections 44AD and 44ADA, as amended by Finance Act, 2023). It is simple, but it is a choice with consequences, so a freelancer should discuss it with a Chartered Accountant before opting in.

New tax regime or old tax regime: how to think about it

Since assessment year 2024-25, the new tax regime under section 115BAC is the default. If you do nothing, you are taxed under it. If you want the old regime, with deductions such as section 80C, section 80D and home loan interest, you have to opt for it, and a salaried individual can switch every year while a person with business income has limited chances to switch back (Source: Income-tax Act, 1961, section 115BAC, as amended by Finance Act, 2023).

The slabs under the new regime for FY 2025-26, as set by the Finance Act, 2025, are shown below.

Two more features matter for a beginner. First, a standard deduction of Rs 75,000 is available to salaried individuals and pensioners under the new regime. Second, the section 87A rebate under the new regime is up to Rs 60,000 for resident individuals whose total income does not exceed Rs 12 lakh, which means no tax on income up to that level. The rebate is not available against tax on special-rate income such as short-term capital gains under section 111A (Source: Finance Act, 2025, sections 87A and 115BAC).

A hypothetical example, for illustration only

Let us take a fictional person, Neha, a salaried employee in Pune with a gross salary of Rs 9,50,000 in FY 2025-26 and no other income. This example is only to show the mechanics and is not a recommendation to choose any regime.

• Gross salary: Rs 9,50,000.
• Less standard deduction: Rs 75,000, so total income is Rs 8,75,000.
• Tax by slab: nil up to Rs 4 lakh; 5% on Rs 4 lakh (Rs 4 to 8 lakh) is Rs 20,000; 10% on Rs 75,000 (Rs 8 to 8.75 lakh) is Rs 7,500. Total is Rs 27,500.
• Section 87A rebate: since total income is below Rs 12 lakh, the rebate wipes out the Rs 27,500 tax, so tax payable is nil.

Look at what is interesting here. Neha owes no tax, yet her total income is above Rs 4 lakh, so she is still required to file a return. If her employer has deducted TDS during the year, filing is also the only way to get that money back. That is why we tell students that "zero tax" and "no return" are two different things (Source: Income-tax Act, 1961, sections 87A, 115BAC and 139).

What documents do you need before filing?

Good filing is mostly good preparation. Sit down with the following before you open the portal.

• PAN and Aadhaar. They must be linked, and your PAN is your user ID on the e-filing portal (Source: Income Tax Department, e-filing portal guidance).
• Form 16. Your employer issues it, usually by 15 June, showing salary paid and TDS deducted (Source: Income-tax Rules, 1962, rule 31).
• Form 26AS and the Annual Information Statement (AIS). Form 26AS shows tax deducted and deposited against your PAN. The AIS goes further and lists interest, dividends, securities and mutual fund transactions reported to the department by banks, brokers and others. The Taxpayer Information Summary (TIS) condenses it (Source: Income Tax Department, AIS and TIS user guide).
• Bank interest certificates. Savings account and fixed deposit interest is taxable even if no TDS was cut.
• Proofs of deductions if you choose the old regime, such as premium receipts, home loan interest certificate and donation receipts.
• Capital gains statements from your broker or fund house if you sold shares or mutual fund units.

A common beginner habit is to file from Form 16 alone. The trouble is that Form 16 does not show your savings account interest, a small dividend or a share sale you made from a demat account. All of these appear in the AIS, and a mismatch between your return and the AIS can trigger a notice. So match your draft against the AIS before you submit (Source: Income Tax Department, AIS user guide).

ITR filing for beginners: how do you file step by step?

The online process is the same for most individuals. Our students usually practise it on a sample dataset in class before they attempt a real return.

1. Log in to the e-filing portal with your PAN and password, and select the relevant assessment year and the mode of filing, which is online for most individuals.
2. Select your status and the ITR form. The portal asks you a few questions and then suggests a form, but it is wise to confirm the choice yourself.
3. Review the pre-filled data. Salary, TDS, interest and some other items come pre-filled. Pre-filled does not mean correct. Compare it with Form 16 and the AIS.
4. Enter the missing income and deductions. Add other income, claim eligible deductions if you are in the old regime, and select the regime.
5. Check the tax computation. The portal shows tax payable or refund. If tax is payable, pay it as self-assessment tax before submitting.
6. Submit and e-verify. Since 1 August 2022, the verification period is 30 days from the date of filing. If you verify after that, the department may treat the return as not filed on the original date, with late fee consequences (Source: CBDT Notification No. 5 of 2022).
7. Keep the acknowledgement. Save the ITR-V and the filed JSON or PDF. You will need it for loans and for any later notice.

What are the ITR due dates and what if you miss them?

Under section 139(1), the normal due date for individuals not requiring an audit is 31 July after the end of the financial year. For taxpayers whose accounts need an audit under section 44AB, it is 31 October. The CBDT has extended these dates in some years, so always check the latest notification before you plan (Source: Income-tax Act, 1961, section 139(1); CBDT notifications).

Missing the date is not the end of the world, but it costs money. A belated return can be filed under section 139(4), generally until 31 December of the assessment year. A late fee under section 234F of Rs 5,000 applies, reduced to Rs 1,000 if total income is not more than Rs 5 lakh. Interest under section 234A at 1% a month can apply on tax that was due. And some losses, such as capital losses, cannot be carried forward if you file late (Source: Income-tax Act, 1961, sections 139(4), 234A, 234F and 80).

Revised and updated returns

If you notice a mistake after filing, do not panic. A revised return under section 139(5) can replace the original one, and an updated return under section 139(8A) is available later, within the window the law allows, on payment of additional tax that grows the later you file. A revised return needs the same care as the first. Do not file two or three revisions in a hurry, because every version is visible to the department (Source: Income-tax Act, 1961, sections 139(5) and 139(8A)).

What are the most common mistakes beginners make?

Over years of teaching, the same slips come up again and again. Here is the list we give our students.

• Ignoring interest income. Savings bank and fixed deposit interest is part of "income from other sources". Not reporting it is among the most frequent reasons for AIS mismatch notices.
• Choosing the wrong form. A person who sold shares and filed ITR-1 beyond the permitted limit risks a defective return notice.
• Not e-verifying. Filing without verification leaves the return incomplete.
• Using an old email or mobile number. Intimations and refund messages go to the contact details on the portal.
• Not checking the refund bank account. A refund is credited only to a pre-validated account.
• Claiming deductions without proof. Under the old regime, keep every receipt, because the department may ask for them.
• Forgetting to report capital gains. If you sold even a few mutual fund units, the AIS will show it. Our article on mutual fund basics for beginners explains how such units work, which helps when you read your capital gains statement.

What about trading and crypto income?

If you trade shares in futures and options, the income is generally treated as non-speculative business income and reported in ITR-3, with possible tax audit depending on turnover. Income from virtual digital assets is taxed at a flat 30% under section 115BBH, with no deduction other than cost of acquisition, and 1% TDS applies under section 194S. We explain this in our article on crypto trading in India: rules, tax and risks (Source: Income-tax Act, 1961, sections 43(5), 44AB, 115BBH and 194S). These situations are not for a first-time filer to handle alone, so a Chartered Accountant is the right person to speak to.

What changes with the Income-tax Act, 2025?

Parliament has passed the Income-tax Act, 2025, which replaces the Income-tax Act, 1961 from 1 April 2026. It uses simpler language, drops the terms "previous year" and "assessment year" in favour of a single "tax year", and renumbers the sections. Returns for income up to FY 2025-26 are still dealt with under the 1961 Act, which is why this article uses the older section numbers (Source: Income-tax Act, 2025, as notified). Section numbers you read in older books or videos may not match the new Act, so treat any reference as a pointer, and check the current text with a professional.

Can learning income tax lead to a career?

Yes. Every business and every salaried person touches income tax, and that creates steady demand for people who understand returns, TDS and compliance. Typical roles include tax assistant in a Chartered Accountant firm, accounts executive in a company, TDS and payroll executive, and tax return preparer working independently within the rules. Many learners combine income tax with GST and accounting software, because small businesses need all three. Our accounting and taxation courses are organised around this combination, and the Diploma in Taxation is the one most beginners start with. No course guarantees a job, but a structured understanding of tax gives you something employers can test in an interview.

Where NIFM fits in

NIFM is an education platform. We teach how income tax, TDS, GST and accounting work, and we do not file returns for the public or advise on tax planning. If you are unsure which course matches your background, the NIFM contact page lets you talk to a counsellor, and you can explore the rest of our learning from the NIFM home page.

Sources: Income-tax Act, 1961 (sections 2, 43(5), 44AB, 44AD, 44ADA, 80, 87A, 111A, 112A, 115BAC, 115BBH, 139, 194S, 234A and 234F); Income-tax Act, 2025; Finance Act, 2023; Finance Act, 2025 and Union Budget 2025-26 documents; Income-tax Rules, 1962 (rules 12 and 31); CBDT ITR notification, 2025; CBDT Notification No. 5 of 2022; Income Tax Department ITR-1 to ITR-4 instructions, e-filing portal guidance and AIS user guide. Author note: written by NIFM accounting and taxation faculty for learners; last updated 16 October 2026.