ITR for salaried employees 2026: ITR-1, regime, deductions, refund

In short

Most employees file ITR-1: a resident with total income up to ₹50 lakh from salary or pension, up to two house properties, interest and long-term gains on listed shares up to ₹1.25 lakh. Otherwise ITR-2.
Under the new regime (the default), the ₹75,000 standard deduction and the rebate mean no tax up to ₹12.75 lakh of salary when salary is the only income.
The old regime keeps HRA, 80C (₹1.5 lakh), 80D and home-loan interest. You choose it in the return itself, whatever you told your employer, but only in a return filed by the due date.
For FY 2025-26 the due date was 31 July 2026. A belated return can still be filed until 31 December 2026, with a late fee, and it is taxed under the new regime.
E-verify within 30 days of filing. Refunds go to a validated bank account linked with your PAN, with interest of 0.5% a month.

ITR-1 or ITR-2

ITR-1 (Sahaj) is for a resident individual with total income up to ₹50 lakh from salary or pension, up to two house properties (new for AY 2026-27), other sources such as interest, long-term gains on listed shares and equity funds (section 112A) up to ₹1.25 lakh, and agricultural income up to ₹5,000.

Use ITR-2 instead if you are a company director, held unlisted shares, have deferred tax on ESOPs, have any short-term capital gains or section 112A gains above ₹1.25 lakh, own more than two house properties, have assets or income outside India, have losses to carry forward, have income above ₹50 lakh, or are a non-resident.
With business or professional income (consulting, freelancing on the side), the form is ITR-3 or ITR-4. See our guide to the income tax return for small businesses and professionals.

The e-filing portal's help page for salaried people still says "one house property"; the ITR-1 notified for AY 2026-27 (Notification 45/2026) allows two.

New regime or old regime

Tax slabs for FY 2025-26 under the new regime (the default)
Total income	Rate
Up to ₹4 lakh	Nil
₹4 lakh to ₹8 lakh	5%
₹8 lakh to ₹12 lakh	10%
₹12 lakh to ₹16 lakh	15%
₹16 lakh to ₹20 lakh	20%
₹20 lakh to ₹24 lakh	25%
Above ₹24 lakh	30%

	New regime	Old regime
Standard deduction on salary	₹75,000	₹50,000
Rebate	Up to ₹60,000: no tax on total income up to ₹12 lakh	Up to ₹12,500: no tax on total income up to ₹5 lakh
Salary with no tax (salary the only income)	Up to ₹12.75 lakh	Depends on deductions
HRA, LTA, 80C, 80D, home-loan interest on your own home	Not allowed	Allowed
Employer's NPS contribution (80CCD(2))	Up to 14% of salary, any employer	Up to 10% (14% for government employers)
Family pension deduction	One-third or ₹25,000, whichever is lower	One-third or ₹15,000, whichever is lower

With no business income you choose every year in the return. What you told your employer for TDS does not bind you.
The old regime can be chosen only in a return filed by the due date. A belated return is taxed under the new regime.
Special-rate income such as capital gains does not get the rebate.

HRA and the old-regime deductions

HRA: the exempt part is the least of (a) the HRA received, (b) rent paid minus 10% of salary (basic plus DA), and (c) 40% of salary (50% in Delhi, Mumbai, Kolkata and Chennai; Bengaluru is 40%).
80C, 80CCC and 80CCD(1) together: up to ₹1.5 lakh (PF, PPF, ELSS, life insurance premium, tuition fees, home-loan principal and others).
80CCD(1B): up to ₹50,000 more for your own NPS contribution.
80D (health insurance): up to ₹25,000 for yourself and family (₹50,000 if a senior citizen), and up to ₹25,000 more for parents (₹50,000 if they are senior citizens).
Home-loan interest on the house you live in: up to ₹2 lakh (section 24(b)).
Savings bank interest: up to ₹10,000 (80TTA); resident senior citizens up to ₹50,000 on deposit interest (80TTB).

What to keep ready

Form 16 from each employer for FY 2025-26 (due from employers by 15 June 2026). From tax year 2026-27 the certificate is called Form 130.
The AIS and TIS from the e-filing portal and Form 26AS: they show TDS, interest, dividends and high-value transactions reported about you.
Interest certificates from banks and post office, and capital-gains statements from your broker or fund house.
For the old regime: rent receipts, investment and insurance proofs, and the home-loan interest certificate.
Your bank account details, pre-validated on the portal and linked with your PAN.

Filing, step by step

Sign in to the e-filing portal with your PAN and choose the assessment year 2026-27 and ITR-1 (or ITR-2).
Check the pre-filled salary, TDS, interest and other figures against Form 16 and the AIS, and add anything missing.
Choose the tax regime (the old one only if you file by the due date) and enter your deductions.
If tax is still due, pay it by challan (self-assessment tax) before you submit.
Submit and e-verify within 30 days: Aadhaar OTP, net banking, a pre-validated bank or demat account, a DSC, or the signed ITR-V sent by speed post to CPC Bengaluru.

A return e-verified after 30 days counts as filed on the day it is verified, so the late fee and interest can apply; one never verified is treated as not filed.

Dates and late filing for FY 2025-26

	Last date
Return (ITR-1 or ITR-2)	31 July 2026
Belated return	31 December 2026, under the new regime
Revised return	31 March 2027
Updated return (ITR-U)	Within 48 months from the end of the assessment year, with additional tax

The late fee under section 234F is ₹5,000, or ₹1,000 when total income is up to ₹5 lakh, and interest runs on any tax still unpaid.

Getting the refund

Refunds are paid into a validated bank account linked with your PAN; pre-validate it on the portal before you file.
A refund is held if your PAN is not linked with Aadhaar.
Interest is added at 0.5% a month (section 244A), unless the refund is less than 10% of the tax.

From tax year 2026-27 (returns filed in 2027) the Income-tax Act, 2025 applies, with the same new-regime slabs (section 202), the same standard deduction (section 19) and the same rebate (section 156). Form 16 becomes Form 130 and Form 26AS becomes Form 168; the new return forms have not yet been notified.

Questions people ask

Which ITR form should a salaried person file?

ITR-1 if you are a resident with total income up to ₹50 lakh from salary or pension, up to two house properties, interest and section 112A gains up to ₹1.25 lakh, and none of the excluded items. Otherwise ITR-2, or ITR-3 / ITR-4 with business income.

Is there tax on a salary of ₹12 lakh?

Not under the new regime when salary is your only income: after the ₹75,000 standard deduction and the section 87A rebate, salary up to ₹12.75 lakh is tax-free. Above that, normal slab rates apply, with marginal relief just above the limit.

Can I claim HRA and 80C in the new regime?

No. HRA, LTA, 80C, 80D and home-loan interest on your own home are allowed only in the old regime. The new regime allows the ₹75,000 standard deduction and your employer's NPS contribution up to 14% of salary.

I told my employer old regime. Can I choose the new one in my return?

Yes. With no business income you choose the regime in the return each year, and what you told your employer for TDS does not bind you. The old regime can be chosen only in a return filed by the due date.

I missed 31 July. What now?

File a belated return by 31 December 2026. The late fee is ₹5,000 (₹1,000 if total income is up to ₹5 lakh), interest runs on unpaid tax, and a belated return is taxed under the new regime.

Why has my refund not come?

The usual reasons: the return is not e-verified, the bank account is not pre-validated or not linked with your PAN, or your PAN is not linked with Aadhaar. Check the refund status and the bank account on the e-filing portal.

Sources

Written from these official pages and notifications, checked on 5 Nov 2026. Rules change by notification: before you act, check the latest position or ask us.

General information, not legal or tax advice for your case. Parishrama Consulting Services is a private firm, not a government office.

Income tax return for salaried employees: ITR-1 or ITR-2, the two regimes and refunds