ITR Filing AY 2026-27: Mandatory for Salaried Employees Even Below Exemption Limit?

ITR filing AY 2026-27: Filing your income tax return (ITR) is an important financial record which should not be missed even if your income falls below the mandatory filing threshold. For salaried taxpayers the last date to file ITR is July 31, 2026. Many individuals wonder if they are required to file ITR or not. The answer is not just dependent on your income level, but a host of other factors. Let’s take a look:

Who should file ITR & is it mandatory for salaried employees?

The important thing to understand is that ITR filing is a statutory requirement and an important financial record-keeping. “Individuals whose total income exceeds the prescribed basic exemption limit are generally required to file an ITR,” says Parizad Sirwalla, Partner and Head - Global Mobility Services, Tax, KPMG in India. For the financial year 2025-26, the basic exemption limit for individuals below 60 years of age is Rs 2.5 lakh under the old income tax regime and Rs 4 lakh under the new income tax regime. But your income falling under the basic exemption limit does not mean that ITR filing is not required, In some cases, filing may also be required in specified situations even where income is below these limits, such as undertaking high-value transactions, claiming a refund of excess tax deducted at source (TDS), or carrying forward eligible losses etc. Parizad Sirwalla explains that salaried employees often have a misconception that deduction of TDS by the employer eliminates the need to file an ITR. “TDS is only a mechanism for tax collection and does not replace the obligation to file a return where the prescribed conditions are met. Further, filing an ITR helps reconcile and report income from multiple sources, claim eligible deductions, and ensure that taxes paid during the year are accurately reflected,” she tells TOI.

Filing ITR online

The online filing process has become significantly and relatively simpler with the government’s e-filing portal (incometax.gov.in/iec/foportal/). Taxpayers can log in using their Permanent Account Number (PAN), select the applicable ITR form, and review the pre-filled information available from employer filings, banks, and other reporting entities. The KPMG tax expert says that the details should be carefully verified, completed and/ or updated wherever required, including disclosures relating to additional income, deductions, exemptions, tax credits, investment in unlisted shares, foreign assets and global assets (wherever applicable) etc. Yet another point to remember is: Once the return is completed, the taxpayer can submit it electronically and verify it through Aadhaar OTP, net banking, a demat account, or other prescribed modes. The return filing process is considered complete only after successful verification. “Timely filing of an ITR also creates a credible financial record helping with loan applications, visa processing etc. Taxpayers should therefore complete the same well before the due date to avoid any interest, penalties and other compliance-related challenges,” she says.