Form 16 to ITR Filing for Salaried — Step-by-Step Guide for AY 2026-27 (FY 2025-26)

TL;DR: If you are a salaried Indian filing your AY 2026-27 income tax return (covering income earned in FY 2025-26), this is the order of work. Get Form 16 from your employer by 15 June 2026 (Rule 31). Cross-check it against Form 26AS, AIS and TIS on the e-filing portal. Pick ITR-1 (Sahaj) if your total income is up to Rs. 50 lakh and you only have salary, up to two house properties, other sources, and LTCG under Section 112A up to Rs. 1,25,000 (this scope expansion is new this year, per CBDT Notification No. 45/2026 dated 30 March 2026). Decide between the new regime (default; standard deduction Rs. 75,000; Section 87A rebate of Rs. 60,000 up to total income Rs. 12 lakh) and the old regime (standard deduction Rs. 50,000; Section 80C / 80D / 24(b) deductions allowed; Section 87A rebate Rs. 12,500 up to Rs. 5 lakh). Form 10-IEA is not required for pure salaried filers — you toggle the regime directly inside the ITR every year. Submit and e-Verify within 30 days of submission. Last date for non-audit cases: 31 July 2026.

This guide walks the salaried filer through every screen, every reconciliation, every common mistake. It is written for the person who got Form 16 last week and is staring at the e-filing portal for the first time.

1. The Big Picture: What Year, What Form, What Deadline

The 2026 tax filing season is for income earned during FY 2025-26 (1 April 2025 to 31 March 2026), assessed in AY 2026-27. The whole return is filed under the Income-tax Act, 1961 and the rates set by the Finance Act, 2025. The new Income-tax Act, 2025 takes effect from 1 April 2026 and applies only to income earned after that date — that is next year’s problem (Tax Year 2026-27, to be filed in 2027).

For a salaried filer with no audit, the key dates this season are:

Filing in May or early June (before the salary-increment cycle hits and people start hunting for capital gains statements) is the calmest moment. Most issues come from filing in the last week of July when the portal is overloaded and Form 26AS reconciliations cannot be redone in time.

2. Get Form 16 from Your Employer

Form 16 is a TDS certificate issued under Section 203 of the Income-tax Act, 1961 read with Rule 31 of the Income-tax Rules, 1962. The employer is legally bound to issue it by 15 June following the financial year for which TDS was deducted on salary. If you switched jobs, you should receive Form 16 from each employer separately for the period of employment.

Form 16 has two distinct parts. They serve different purposes and you must reconcile both.

2.1 Form 16 Part A — the TRACES summary

Part A is generated and downloaded by the employer from the TRACES portal (TDS Reconciliation Analysis and Correction Enabling System). The employer cannot type this part manually. It is a system-generated TDS certificate showing:

• Employer’s name, address, PAN and TAN (Tax Deduction and Collection Account Number)
• Employee’s name, address and PAN
• Assessment Year (AY 2026-27 for the year we are filing now)
• Period of employment
• Quarter-wise summary of salary paid and TDS deducted
• Quarter-wise summary of TDS deposited with the government, with challan and BSR-code level details
• A unique TDS certificate number (verifiable on TRACES)

This is the part that the income-tax department’s system has on record. Part A must match Form 26AS exactly; if it does not, your TDS credit is at risk.

2.2 Form 16 Part B — the salary computation

Part B is prepared by the employer (now in a CBDT-prescribed format that mirrors Schedule S of the ITR) and shows how taxable salary was computed. The line items are:

• Gross salary (Section 17(1)) — basic, dearness allowance, bonus, commission, etc.
• Allowances exempt under Section 10 — HRA (Section 10(13A)), LTA (Section 10(5)), gratuity, leave encashment, transport allowance for the disabled, daily allowance, perquisite-free LTC under Section 10(5), education allowance, etc.
• Less: standard deduction (Section 16(ia)) — Rs. 75,000 if you are taxed under the new regime, Rs. 50,000 if old
• Less: professional tax (Section 16(iii)) — old regime only
• Income from salary (post deductions)
• Income from other sources reported by you to the employer (interest on housing loan etc., for TDS computation under Section 192(2B))
• Gross total income
• Chapter VI-A deductions claimed — Section 80C, 80D, 80CCD(1B), 80E, 80G etc. (only if the employee declared them and old regime is being followed)
• Total income
• Tax payable, rebate under Section 87A (where applicable), surcharge, health and education cess
• TDS already deducted — should match the quarterly figures in Part A

If you switched regimes mid-year by submitting a fresh declaration to your employer, your Part B will reflect the regime your employer applied for TDS purposes — but you can still switch back when filing your ITR. The employer’s regime choice is for TDS computation only; the regime that finally counts is the one you select on your return.

3. Reconcile Form 16 with Form 26AS, AIS and TIS

Three separate department records exist for every taxpayer. The mismatch between them is the single largest reason for refunds being held up or for a Section 143(1) intimation showing extra demand.

Practical reconciliation steps before you start the return:

1. Log in to incometax.gov.in → e-File → Income Tax Returns → View Form 26AS. Cross-check the TDS figures with Form 16 Part A. The amount, the deductor TAN, and the assessment year must match.
2. Go to Services → AIS. Open both AIS and TIS. Look at every income head: salary (should match Form 16 gross), interest from savings, FD interest, dividends, mutual fund SIP/redemptions, sale of securities, sale of immovable property, foreign remittances under LRS, etc.
3. If you spot an entry in AIS that does not belong to you (a common scenario: a joint bank account where the entire interest is reported against your PAN even though the income is your spouse’s, or a duplicate dividend entry from the same broker reported by both the company and the registrar), submit AIS feedback with the correct status. Save the screenshot.
4. If FD interest from a dormant or forgotten account shows up, declare it. Banks deduct TDS only above Rs. 40,000 (Rs. 50,000 for senior citizens) per branch; below that, no TDS, but the income is still taxable and visible in AIS.
5. Match any other-source income disclosed to your employer (Section 192(2B)) so that your final return numbers and Form 16 Part B reconcile.

For AY 2026-27, Form 26AS continues to be the authoritative TDS-credit document. (Form 26AS becomes Form 168 only from Tax Year 2026-27 under the new Income-tax Rules, 2026 — it does not affect this filing season.)

4. Pick the Right ITR Form

For AY 2026-27, the seven ITR forms were notified by CBDT Notification No. 45/2026 dated 30 March 2026, with a corrigendum dated 10 April 2026. The two forms that most salaried filers will use are:

4.1 ITR-1 (Sahaj) — expanded scope this year

You can use ITR-1 (Sahaj) if all of these are true:

• You are a resident individual (not a non-resident, not RNOR — resident but not ordinarily resident)
• Total income is up to Rs. 50 lakh for the year
• Income comes only from: salary or pension, up to two house properties (the AY 2026-27 expansion — earlier ITR-1 allowed only one), and other sources (interest, dividends, family pension)
• Agricultural income is up to Rs. 5,000
• Long-term capital gains under Section 112A from listed equity shares or equity mutual funds are up to Rs. 1,25,000 — this too is a new AY 2026-27 inclusion (earlier any LTCG forced you to ITR-2)

You cannot use ITR-1 if any of these apply:

• You are a director in a company (any company, listed or not)
• You held unlisted equity shares any time during the year
• You have short-term capital gains under Section 111A or any other STCG
• You have LTCG under Section 112A above Rs. 1,25,000, or LTCG under any other section (debt MFs, gold, property, foreign assets)
• You have any foreign assets, foreign income, or are signing authority on any foreign account
• You have losses to carry forward to future years (a current-year house-property loss can still be reported as a negative number directly in ITR-1, but if you want to carry forward any loss to subsequent years you must move to ITR-2)
• You have business or professional income
• You have agricultural income above Rs. 5,000

4.2 ITR-2 — the next-most-common form for salaried

If even one ITR-1 condition fails, you fall back to ITR-2. Most commonly that happens because:

• You sold equity / mutual funds during the year and your LTCG exceeds Rs. 1.25 lakh, or there is any STCG — ITR-2 has Schedule CG
• You are an NRI or RNOR — ITR-2 has Schedule FA, FSI and TR for foreign-asset disclosure
• You have more than two house properties
• You hold ESOPs / RSUs / sweat equity in a foreign parent — foreign-asset disclosure mandatory
• You want to carry forward any loss (capital, house-property loss exceeding the in-year set-off limit, etc.) to subsequent years

ITR-3 is for those with business or professional income, ITR-4 (Sugam) is for the presumptive 44AD / 44ADA / 44AE bracket. If you only earn salary and the modest extras above, you do not need either.

This article focuses on ITR-1 mechanics. The decision tree across all four individual forms (ITR-1, 2, 3, 4) with worked examples is in our companion piece on choosing the right ITR for AY 2026-27.

5. Choose Your Tax Regime

The new tax regime under Section 115BAC is the default for individuals from AY 2024-25 onwards. The Finance Act, 2025 restructured the slabs once more for FY 2025-26 (AY 2026-27).

5.1 Slabs and standard deduction at a glance

Old-regime senior-citizen (60-79) basic exemption is Rs. 3 lakh; super-senior (80+) is Rs. 5 lakh. Cess of 4 % applies on the tax-after-rebate-and-surcharge in both regimes.

5.2 Section 87A rebate — the most misunderstood number

Under the new regime, resident individuals with total income up to Rs. 12,00,000 pay zero income tax because the Section 87A rebate of up to Rs. 60,000 wipes out the slab tax. Add the Rs. 75,000 standard deduction and the effective tax-free salary is Rs. 12,75,000 for AY 2026-27.

Two non-obvious points where filers go wrong:

• Special-rate income does not benefit from the Section 87A rebate. If your total income is Rs. 11 lakh of which Rs. 9 lakh is salary and Rs. 2 lakh is LTCG on equity (taxed at 12.5 % above the Rs. 1.25 lakh exemption), the LTCG portion is taxed at the special rate without rebate. You pay 12.5 % on (Rs. 2L − Rs. 1.25L) = Rs. 9,375 plus cess, even though your total income is below Rs. 12 lakh.
• Marginal relief at the Rs. 12 lakh threshold. If your total income is, say, Rs. 12,10,000, the slab tax works out to ~Rs. 61,500. The Section 87A proviso ensures your tax after rebate does not exceed the income excess over Rs. 12 lakh (Rs. 10,000 in this case). Without marginal relief, crossing Rs. 12 lakh by even Rs. 1 would create a Rs. 60,000 cliff — the proviso prevents that.

5.3 Old regime — when it still wins

The old regime still beats the new regime for salaried filers who can claim large deductions. Practitioner heuristic: at the Rs. 15-20 lakh income band, you typically need around Rs. 3.5 to Rs. 4 lakh of deductions — Section 80C (Rs. 1.5L), 80D (Rs. 25K-50K depending on parents), 80CCD(1B) (Rs. 50K), HRA exempt under Section 10(13A), home loan interest under Section 24(b) (Rs. 2L) — for the old regime to come out ahead. Use the official income-tax calculator on the e-filing portal (the “Tax Calculator” under the “e-Pay Tax” tile) to compare your exact numbers.

5.4 Switching the regime — salaried filers do NOT need Form 10-IEA

This is the most common confusion. Form 10-IEA is the form for opting out of the new regime. Per the CBDT FAQ, it is required only when the taxpayer has income from business or profession. For pure salaried filers (those filing ITR-1 or ITR-2 with no business income):

• You can switch between new and old regime every assessment year directly inside the ITR — just toggle the regime selector when starting the return
• No Form 10-IEA filing is needed at all
• The regime your employer used for TDS computation in Form 16 Part B does not bind you — you can override it on your return

If you have any business or professional income (even a small consultancy invoice on the side), Form 10-IEA is needed to opt out, and the option to come back to the old regime is available only once in a lifetime once you have re-entered the new regime. That trap does not apply to you if your only income is from salary, capital gains, and other sources.

6. File the Return on the e-Filing Portal

The portal pre-fills most of the data from Form 16, Form 26AS, AIS and TIS. The job of the filer is to verify what is auto-populated and correct what is missing or wrong. Step-wise:

1. Login at incometax.gov.in using your PAN. Make sure your PAN and Aadhaar are linked — the portal will not allow filing otherwise.
2. Go to e-File → Income Tax Returns → File Income Tax Return.
3. Select AY 2026-27, mode Online, status Individual.
4. Choose your ITR form — ITR-1 for the salaried baseline, ITR-2 if any disqualifier in section 4 applies. The portal also offers a guided “Help me decide which ITR” flow.
5. Choose your filing reason: typically “Total income exceeds basic exemption” for most filers.
6. Select tax regime: old or new. Default is new. Toggle as you decide.
7. Personal information — verify name, PAN, Aadhaar, address, email, mobile, bank account details for refund. Bank account must be pre-validated on the portal — refunds to non-validated accounts are not paid.
8. Income details — the salary section is pre-filled from Form 16. Cross-check Section 17(1) gross, Section 10 exemptions, Section 16 deductions. House property pre-fill comes from interest certificates (if you uploaded any to your employer); else fill rent received, municipal taxes, interest under Section 24(b).
9. Other sources — bank interest, FD interest, dividends, family pension. Pre-fill comes from AIS. Add anything missed.
10. Deductions — only if old regime. Section 80C / 80D / 80CCD(1B) / 24(b) etc. The portal blocks these fields automatically if you selected new regime.
11. Tax paid — TDS pre-filled from Form 26AS, advance tax / self-assessment tax pre-filled from challan records. Verify, do not edit.
12. Total tax liability — the portal computes tax, applies Section 87A rebate where due, adds 4 % cess, applies surcharge if income above Rs. 50 lakh, subtracts TDS / TCS / advance tax. The result is either refund due or self-assessment tax payable under Section 140A.
13. If self-assessment tax is payable, pay it through the e-Pay Tax tile before submitting. The challan reflects on the portal in 1-2 working days.
14. Preview and submit. Read the entire preview — once submitted, you cannot edit until you e-Verify and then file a revised return.

7. e-Verify Within 30 Days

This is the single most ignored step. Per CBDT Notification No. 5/2022 dated 29 July 2022, the e-Verification window was reduced from 120 days to 30 days. If you do not e-Verify within 30 days of submitting the ITR, the return is treated as having been filed on the date of verification, not the date of submission — which can convert an on-time return into a belated one and trigger Section 234F late fees.

The six e-Verification methods:

1. Aadhaar OTP — OTP sent to the mobile number registered with UIDAI. The fastest method if Aadhaar is linked.
2. Net banking — log in to your bank’s net banking and click the “e-File ITR” / “Verify Income Tax Return” option to redirect.
3. Bank-account-based EVC — Electronic Verification Code generated against a pre-validated bank account.
4. Demat-account-based EVC — same as above, but against a pre-validated demat account.
5. Bank ATM — supported by SBI, ICICI, HDFC and a few others; generate EVC at the ATM and enter it on the portal.
6. Physical ITR-V — print, sign in blue ink and post to Centralised Processing Centre, Income Tax Department, Bengaluru – 560500, Karnataka by speed post only (per CBDT Notification No. 5/2022 dated 29 July 2022). The date of dispatch by speed post is the date that counts towards the 30-day window, not the date of receipt at CPC. Courier services are not accepted.

Aadhaar OTP is the default recommendation. Net banking is the fallback if your Aadhaar mobile is out of date.

8. The Twelve Most Common Salaried Filing Mistakes

1. Filing using only Form 16 and ignoring AIS. Form 16 is just the salary slice. AIS captures interest, dividends, capital gains, foreign remittances. Any income visible in AIS but not declared in the return triggers a Section 143(1)(a) intimation proposing an adjustment.
2. Forgetting savings-bank interest. Below Rs. 10,000 it is exempt under Section 80TTA (old regime) / Section 80TTB (Rs. 50,000, senior citizens, old regime). Under the new regime, it is fully taxable. Either way, declare it. Even Rs. 800 of interest goes in.
3. Treating the new regime as “the regime where rebate up to Rs. 12 lakh applies even on capital gains”. The Section 87A rebate does not cover special-rate income. LTCG above Rs. 1.25 lakh, STCG, lottery winnings — all are taxed at the special rate without rebate.
4. Claiming HRA on a self-occupied home loan property. If you live in your own home, no rent is being paid; HRA cannot be claimed. The opposite case — living in rented accommodation while owning a self-occupied home in another city — is allowed if the office is far enough; substantiate with the rent agreement and rent receipts.
5. Claiming Section 80C / 80D / 24(b) deductions while filing under the new regime. The portal blocks the field, but a manual JSON utility filing can still embed the wrong number; CPC adjusts it under Section 143(1)(a).
6. Skipping FD interest from a dormant joint account. AIS picks it up against your PAN even if your spouse operates the account. Either declare it on your return, or submit AIS feedback marking it as “information relates to other PAN” with documentation.
7. Claiming HRA without rent receipts above Rs. 1 lakh per year. The landlord’s PAN is mandatory above Rs. 1 lakh; no PAN, no claim — and it is now common for the department to verify the rent at the landlord’s end.
8. Using ITR-1 when you have any LTCG above Rs. 1.25 lakh. This is a fresh trap because ITR-1 now does allow LTCG up to Rs. 1.25 lakh; it is easy to assume any equity LTCG goes there. It does not.
9. Reporting employer-deducted professional tax under both Section 16(iii) and as a separate deduction. It is already part of the Form 16 Part B salary computation; do not double-claim.
10. Not pre-validating the bank account for refund. The refund will sit at CPC until validation is done.
11. Filing without confirming the regime selector. The portal defaults to new; if old is more advantageous for you, toggle it explicitly.
12. Not e-Verifying. A submitted but unverified return is treated as not filed until verification is completed.

9. Refund Timeline and Tracking

For a clean return with valid bank pre-validation, refunds typically credit within 15-45 days of e-Verification. Track via e-File → Income Tax Returns → View Filed Returns; the status moves through Submitted → e-Verified → Processed → Refund issued. If there is a defect, you will receive a Section 139(9) defective-return notice (15 days to respond) or a Section 143(1)(a) prima-facie adjustment intimation (30 days to respond). Reply through the portal — do not ignore.

If your refund is delayed beyond 45 days post-verification with status stuck at Processed, raise a refund-reissue request from the portal once your bank account is correctly validated; the most common cause is bank-account mismatch.

10. Quick FAQ

Q. I have not received Form 16 from my employer. Can I still file?
Yes. Use Form 26AS to pull TDS figures, your salary slips for gross salary, and bank statements for net credit. File a complaint with the assessing officer if Form 16 is denied — the employer is in violation of Section 203.

Q. I switched jobs in November. I have two Form 16s. How do I add them?
In the salary section of the ITR, click “Add another employer”. Enter both employers separately. Total exemptions and deductions are aggregated, but Section 16(ia) standard deduction is allowed only once across all employers (the portal handles this automatically).

Q. My HRA in Form 16 looks too low.
Your second employer would not have known the HRA your first employer paid; each employer computes HRA exemption based on its own salary structure. When you file your ITR, the calculation rolls up your full annual rent against the full annual basic salary, which usually increases the exempt portion. Re-compute Section 10(13A) yourself; the difference becomes a refund.

Q. Can I file the old regime even though my Form 16 was prepared under the new regime?
Yes. The Form 16 reflects the regime you declared to your employer for TDS purposes, not your final regime. Pure salaried filers can switch every year directly in the ITR with no Form 10-IEA needed.

Q. I missed the 31 July 2026 deadline.
File a belated return under Section 139(4) by 31 December 2026 with the Section 234F late fee (Rs. 5,000; Rs. 1,000 if total income is below Rs. 5 lakh). You lose the option to carry forward most losses (capital losses, business losses) and the right to switch to the old regime if you had business income.

Q. My total income is exactly Rs. 12,00,500. Will I pay full slab tax on Rs. 12,00,500 or only on the excess?
Marginal relief under the proviso to Section 87A ensures that you pay only the excess over Rs. 12 lakh (Rs. 500 here, plus 4 % cess), not the full slab tax. The portal applies this automatically.

Q. Do I need to file if my employer already deducted full TDS?
Section 139(1)(b) requires you to file if your total income (computed before applying the Chapter VIII-A rebate under Section 87A and before deductions under Chapter VI-A in respect of which Section 80AC etc. apply) exceeds the maximum amount which is not chargeable to income-tax (Rs. 4 lakh under the new regime; Rs. 2.5 lakh / Rs. 3 lakh / Rs. 5 lakh under the old regime depending on age). The seventh proviso to Section 139(1) also makes filing mandatory in additional cases (deposits exceeding Rs. 1 crore in current accounts, foreign travel spend above Rs. 2 lakh, electricity bill above Rs. 1 lakh, etc.). Filing is mandatory under any of these triggers even if your final tax payable after rebate is zero.

11. Statutory References for Your Records

• Section 203, Income-tax Act, 1961 — obligation to issue certificate of TDS on salary, basis of Form 16.
• Rule 31, Income-tax Rules, 1962 — Form 16 prescribed format and 15 June due date.
• CBDT Notification No. 45/2026 dated 30 March 2026 (with corrigendum 10 April 2026) — ITR forms for AY 2026-27; ITR-1 expanded to two house properties and LTCG u/s 112A up to Rs. 1.25 lakh.
• Section 139(1), Income-tax Act, 1961 — due date for filing return; 31 July 2026 for non-audit individuals.
• Section 139(4), Income-tax Act, 1961 — belated return; 31 December 2026 outer limit.
• Section 234F, Income-tax Act, 1961 — late filing fee (Rs. 5,000 / Rs. 1,000).
• Section 115BAC, Income-tax Act, 1961 — new tax regime, default from AY 2024-25.
• Section 87A, Income-tax Act, 1961 (Finance Act, 2025) — rebate up to Rs. 60,000 (new regime) and Rs. 12,500 (old regime), with marginal relief proviso.
• Section 16(ia), Income-tax Act, 1961 — standard deduction for salaried (Rs. 75,000 new regime / Rs. 50,000 old regime).
• Section 10(13A), Income-tax Act, 1961 — HRA exemption (old regime only).
• Section 24(b), Income-tax Act, 1961 — home loan interest (Rs. 2 lakh self-occupied, old regime only).
• Section 80C / 80D / 80CCD(1B) / 80E / 80G, Income-tax Act, 1961 — Chapter VI-A deductions, old regime only.
• Section 285BB read with Rule 114-I, Income-tax Act / Rules — basis for Form 26AS / AIS / TIS.
• CBDT Notification No. 5/2022 dated 29 July 2022 — e-Verification window of 30 days.
• Section 140A, Income-tax Act, 1961 — self-assessment tax payable before filing.
• Section 143(1) and 143(1)(a), Income-tax Act, 1961 — intimation post-processing; prima-facie adjustments.
• Section 139(9), Income-tax Act, 1961 — defective return notice; 15-day window to rectify.

This guide is a practitioner-oriented walk-through as on 6 May 2026. Slabs, rebate amounts and ITR schemas can change with subsequent CBDT notifications, circulars and Finance Act amendments — verify the current ITR-1 / ITR-2 schema and the latest CBDT FAQ before filing. For complex situations — multiple employers across the year, foreign income, ESOP / RSU vesting from a foreign parent, large capital gains, NRI residency — consult a practising chartered accountant. Nothing on this page is a substitute for professional advice.