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How to File Your Income Tax Returns (ITR) in 2025: A Step-by-Step Guide

Filing your income tax return is an important responsibility that ensures you stay compliant with Indian tax laws. The Income Tax Department has made the process easier with online filing portals and e-filing systems, making it more convenient for taxpayers to file their returns.

In this post, we'll provide a step-by-step guide on how to file your ITR for FY 2025-26 while covering the recent changes and new provisions.

Step 1: Gather Your Documents

Before you start filing, make sure you have all the necessary documents in place:

  • Form 16: Issued by your employer, detailing your salary and taxes deducted.
  • Bank Statements: For details on interest income or other earnings.
  • Form 26AS: A summary of taxes already paid or deducted.
  • Investment Details: For claiming deductions under Section 80C, 80D, etc.
  • TDS Certificates: If you are receiving income from sources like rent, freelance work, or professional services.
  • Capital Gains Details: If you’ve sold property, shares, or mutual funds.

Tip: Make sure to gather Form 16 from your employer as it is essential for salaried individuals when filing ITR.

Step 2: Choose the Correct ITR Form

The Income Tax Department provides different forms for different categories of taxpayers. Here’s a breakdown of the forms based on your income type:

  • ITR-1 (Sahaj): For salaried employees, pensioners, and individuals with income up to ₹50 lakh.
  • ITR-2: For individuals and Hindu Undivided Families (HUFs) who have income from more than one source, like salary, business, or capital gains.
  • ITR-3: For self-employed individuals or professionals with income from business or profession.
  • ITR-4 (Sugam): For taxpayers opting for the Presumptive Taxation Scheme under Section 44AD, 44ADA, or 44AE.

Tip: Most salaried employees can opt for ITR-1, but if you have multiple sources of income or other complexities, use the appropriate form.

Step 3: Fill in the Income Details

Start by entering your personal information (name, address, PAN number) in the ITR form. Then, proceed with the income details:

  • Income from Salary: This can be found in Form 16 issued by your employer. Ensure you enter the exact details from this form.
  • Income from Other Sources: Include interest from savings accounts, fixed deposits, or dividends.
  • Capital Gains: If you’ve sold property, stocks, or mutual funds, ensure you enter the correct capital gains amount.

Tip: Double-check your Form 16 for accuracy before filling out the salary details to avoid errors.

Step 4: Claim Deductions (If Applicable)

While the new tax regime doesn’t allow most exemptions, if you’re filing under the old tax regime, you can claim various deductions to reduce your taxable income:

  • Section 80C: Deduction up to ₹1.5 lakh for investments in PPF, EPF, LIC, NSC, etc.
  • Section 80D: Deduction for health insurance premiums paid for yourself, your family, or parents.
  • Section 80E: Deduction for education loans.
  • Section 24(b): Deduction of up to ₹2 lakh on home loan interest.

Tip: If you’re opting for the new tax regime, you won’t be able to claim deductions, but you’ll benefit from lower tax rates.

Step 5: Verify Tax Paid and TDS

Ensure that the tax deducted at source (TDS) from your salary, interest, and other income has been properly reflected in your Form 26AS. If there are discrepancies, you may need to contact your employer or the concerned financial institution.

Tip: You can check your Form 26AS online on the Income Tax Department website. Cross-check the TDS entries before filing your return.

Step 6: Calculate Tax Liability and Pay Additional Tax (If Required)

Once all the income and deductions are filled, the online system will calculate your tax liability. If your tax liability is higher than the TDS already paid, you will need to pay the remaining tax.

You can pay your taxes through the online payment portal of the Income Tax Department using Net Banking or e-wallets.

Tip: Pay any pending taxes before filing your return to avoid penalties or interest.

Step 7: Submit the ITR Form

Once you’ve filled out all the necessary details, reviewed the form, and made the required payments, you can submit the ITR online. You will be asked to electronically sign the return with your Aadhaar OTP or Net Banking credentials.

Tip: After submission, download the ITR acknowledgment and keep it for your records.

Step 8: E-Verify Your ITR

E-verification of your ITR is a crucial step in the filing process. There are several ways to verify your return:

  • Aadhaar OTP
  • Net Banking
  • Through your bank account
  • Physical verification (sending the signed ITR-V to CPC Bangalore)

Tip: Ensure to complete the e-verification process within 120 days of filing your ITR to avoid delays.

Conclusion

Filing your Income Tax Return is a critical part of financial planning. By following this step-by-step guide, you can easily file your ITR for FY 2025-26 without hassle. Whether you opt for the old tax regime or the new tax regime, always stay informed of the latest changes and provisions under the Income Tax Act.

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