Returns and Forms for Salaried Individuals for AY 2026-27

Which ITR form may apply to a salaried individual

A salaried taxpayer does not automatically use the same return form every year. The correct form depends on the type of income, capital gains, foreign assets, business income, and whether the taxpayer falls inside the simplified conditions of ITR-1 or ITR-4.

For AY 2026-27, the department guidance broadly places salaried taxpayers into ITR-1, ITR-2, ITR-3, or ITR-4 depending on the mix of income and whether business or presumptive income is involved.

• ITR-1 (Sahaj): resident individual, not RNOR, total income up to Rs. 50 lakh, with salary or pension, up to two house properties, other sources, agricultural income up to Rs. 5,000, and limited LTCG under section 112A up to Rs. 1.25 lakh, subject to all applicable conditions
• ITR-2: individual or HUF not eligible for ITR-1 and not having income from business or profession
• ITR-3: individual or HUF having income from business or profession, along with other heads as applicable
• ITR-4 (Sugam): resident individual, resident HUF, or resident firm other than LLP using presumptive taxation under sections 44AD, 44ADA, or 44AE, along with permitted salary, up to two house properties, other sources, agricultural income up to Rs. 5,000, and limited LTCG under section 112A up to Rs. 1.25 lakh, subject to all applicable conditions

When ITR-1 or ITR-4 cannot be used

Many salaried filers start with ITR-1, but the form becomes unavailable once the case moves beyond the simplified conditions. Similar restrictions apply to ITR-4.

The department guidance lists a number of disqualifying points that commonly push a taxpayer into another return form.

• Director in a company
• Short-term capital gains
• Long-term capital gains under section 112A exceeding Rs. 1.25 lakh
• Unlisted equity shares held during the year
• Any asset or financial interest outside India
• Signing authority in an account outside India
• Income from a source outside India
• Tax deducted under section 194N in the specified cases
• Deferred tax on ESOP in the specified cases
• Brought-forward loss or loss to be carried forward under any head
• Total income above Rs. 50 lakh, subject to the department's stated exception for limited LTCG under section 112A

Common forms and statements salaried taxpayers should review

Before filing, salaried taxpayers should not rely on salary slips alone. The department guidance lists several forms and statements that affect TDS credit, exemption claims, foreign tax credit, or reconciliation.

• Form 12BB: employee declaration to employer for HRA, LTC, housing-loan interest, and other eligible claims used for salary TDS working
• Form 16: salary TDS certificate from employer showing income, deductions, exemptions, and tax deducted
• Form 16A: certificate for TDS on non-salary income
• Form 26AS: tax deducted or collected at source
• AIS: broader annual information statement showing TDS, TCS, taxes paid, SFT information, refund or demand items, and other reported information
• Form 67: filed where foreign tax credit is claimed for income from outside India
• Form 15G: declaration by eligible resident non-senior taxpayer or HUF for non-deduction of TDS in specified cases
• Form 15H: declaration by eligible resident individual aged 60 or above for non-deduction of TDS in specified cases
• Form 10E: used where relief under section 89(1) is claimed for arrears, advance salary, gratuity, termination compensation, or commuted pension

How old and new regime choice works

The new regime under section 115BAC remains the default regime for eligible individual taxpayers. A salaried taxpayer without business or professional income can normally choose the preferred regime directly in the return, provided the return is filed within the due-date framework referred to by the department.

Where the taxpayer has business or professional income and wants to opt out of the default new regime, Form 10-IEA becomes important. The department FAQ also explains that moving back into the default new regime after opting out is subject to the one-time re-entry rule for eligible business or profession cases.

• Non-business case: regime choice can be exercised in the ITR for that year
• Business or profession case: Form 10-IEA is required to opt out of the default new regime
• Re-entry into the default new regime after opting out is restricted in business or profession cases

Tax slab highlights for salaried taxpayers for AY 2026-27

Under the new regime, the slab structure starts with nil tax up to Rs. 4 lakh and then moves through 5 percent, 10 percent, 15 percent, 20 percent, 25 percent, and 30 percent bands. Under the old regime, the basic exemption is Rs. 2.5 lakh for individuals below 60, Rs. 3 lakh for resident senior citizens, and Rs. 5 lakh for resident super senior citizens.

The department guidance also shows rebate under section 87A up to Rs. 60,000 in the new regime where total income after eligible deductions does not exceed Rs. 12 lakh, and up to Rs. 12,500 in the old regime where total income after eligible deductions does not exceed Rs. 5 lakh. Health and education cess at 4 percent applies in both regimes. Surcharge and marginal relief apply where income crosses the relevant thresholds.

• New regime basic exemption: up to Rs. 4,00,000
• Old regime basic exemption for individual below 60: up to Rs. 2,50,000
• Old regime resident senior citizen: up to Rs. 3,00,000
• Old regime resident super senior citizen: up to Rs. 5,00,000
• Section 87A rebate in new regime: up to Rs. 60,000 if total income after eligible deductions does not exceed Rs. 12,00,000
• Section 87A rebate in old regime: up to Rs. 12,500 if total income after eligible deductions does not exceed Rs. 5,00,000

Which deductions matter in the new regime and the old regime

The old regime continues to be the broader deduction regime for salaried taxpayers. The new regime allows only a narrower set of deductions and reliefs under the department's current guidance.

For salary cases, this difference is one of the main reasons taxpayers still compare both regimes before filing.

• New regime: employer contribution deduction under section 80CCD(2) and the permitted government contribution under section 80CCH(2) remain relevant as per the department guidance; the employee contribution under section 80CCH(1) is not generally available in the new regime
• New regime: house-property interest deduction under section 24(b) is still relevant in the let-out property context, but set-off and carry-forward restrictions apply as stated by the portal
• Old regime: standard deduction, HRA where eligible, section 24(b), section 80C, section 80CCD(1B), section 80D, section 80E, section 80G, section 80TTA, section 80TTB, section 80U and other eligible deductions continue to matter
• Old regime: self-occupied house-property interest under section 24(b) can go up to Rs. 2 lakh in the qualifying cases stated by the portal
• Old regime: the combined section 80C, 80CCC and 80CCD(1) cap remains Rs. 1.5 lakh, while section 80CCD(1B) is separate up to Rs. 50,000

A practical filing checklist for salaried taxpayers

A clean return usually comes from reconciliation first and return preparation second. In practice, salaried taxpayers should match salary records with TDS records, portal statements, and deduction proofs before choosing the form and regime.

• Check Form 16 against salary income in the return
• Review AIS and Form 26AS before final submission
• Confirm whether any capital gains, foreign assets, or foreign income make ITR-1 unavailable
• Compare old and new regime after considering deductions actually available to you
• Keep proof details ready for deductions, house-property interest, insurance, NPS, and education-loan claims where relevant
• Use Form 10E, Form 67, Form 15G, or Form 15H only where the legal conditions are actually satisfied

The law in simple words: salary return basics

The Act treats the assessment year as a twelve-month period beginning on 1 April. AY 2026-27 therefore relates to income of the previous year that ended on 31 March 2026.

Section 139(1) is the basic return-filing rule. In simple terms, a person who crosses the applicable income threshold, and every company or firm, must file a return in the prescribed form by the applicable due date. The correct ITR form depends on the complete income profile, not only on the fact that the taxpayer receives salary.

Section 192 deals with tax deducted from salary by the employer. This is why Form 16 and the salary schedule should agree with the salary and TDS information reported in the return. A TDS credit should not be claimed without matching salary income and supporting records.

• Check the previous year and assessment year before applying any rate or due date.
• Match salary income in the return with Form 16 and the salary schedule.
• Match salary TDS with the relevant TDS schedule and Form 26AS/AIS.
• Move beyond ITR-1 when capital gains, foreign assets, business income, losses, or another disqualifying fact applies.