ITR Filing for Salaried Employees: AY 2026-27 Guide

Salaried filing used to be simple because the employer did the thinking. It still is simple — but the thinking has moved from the payroll desk to your return. Your employer picks a regime for TDS during the year; you pick the regime for the actual tax at filing time. Those can differ, and only yours counts. This guide walks the salaried return for AY 2026-27 (FY 2025-26): what Form 16 tells you, the new-regime slabs and the ₹75,000 standard deduction, what happened to HRA and 80C, when the old regime still wins, and the mistakes that quietly cost salaried taxpayers their refunds.

Form 16, in two parts — and why you still check it

Your employer must issue Form 16 by 15 June after each financial year. Part A is the TDS summary — employer and employee details, quarterly tax deducted and deposited. Part B is the salary annexure: gross salary, the exemptions allowed (HRA, LTA), the deductions allowed (80C investments you declared, standard deduction) and the net taxable salary. Source: Income Tax Department, official communication that Form 16 be issued by 15 June under rule 31(1)(a), as on 2 Nov 2026.

Form 16 is your employer's word, not the government's record. Before filing, pull Form 26AS and the AIS from the portal and check three lines: total TDS in Form 16 against Part A of 26AS, salary in Form 16 against the AIS salary figure, and any interest or dividend the AIS shows that Form 16 never will. If TDS was deducted but never deposited by the employer, it will not appear in 26AS — and you cannot claim credit for it in your return. Chasing the employer (or filing only after the deposit shows up) is the safer path. Our Form 26AS and refund guide works through these mismatches line by line.

The new-regime slabs for FY 2025-26

The new regime is the default, and Budget 2025 rebuilt it around a zero-tax zone for the middle of the salary range:

Source: PIB press release on Union Budget 2025-26, February 1, 2025.

Two attachments make the lower half of that table mostly theoretical. The standard deduction for salaried and pensioners is ₹75,000, and the section 87A rebate is ₹60,000 — enough to clear the entire tax on taxable income up to ₹12 lakh. With the standard deduction, a salaried person's tax-free ceiling is ₹12.75 lakh. Source: PIB Budget 2025-26 release; Income Tax Department FAQ on the section 87A rebate for FY 2025-26 (rebate limited to ₹60,000 for taxable income up to ₹12 lakh, with marginal relief just above), incometaxindia.gov.in, as on 2 Nov 2026.

One honest caveat the headlines skip: the rebate wipes tax on your normal incomes — salary, interest, rent. Tax on capital gains charged at special rates (equity LTCG at 12.5%, STCG at 20%) sits outside it. The finance ministry's own Budget statement framed the ₹12 lakh no-tax promise as excluding special-rate income such as capital gains. Source: PIB Budget 2025-26 release, February 1, 2025. A ₹11.9 lakh salary with zero gains is clean; ₹11.9 lakh with a large equity redemption is not automatically.

The old regime, for comparison, keeps its familiar slabs — nil to ₹2.5 lakh (₹3 lakh for senior citizens, ₹5 lakh for super seniors), 5% to ₹5 lakh, 20% to ₹10 lakh, 30% beyond — with a ₹12,500 rebate that zeroes tax only up to ₹5 lakh of taxable income, and a ₹50,000 standard deduction. Source: Income Tax Department tax-rates page and 87A FAQ, incometaxindia.gov.in, as on 2 Nov 2026.

What the new regime removed — and what it kept

In the new regime, Chapter VI-A deductions are simply not available, with narrow exceptions. Gone: 80C, 80D, HRA, LTA, home-loan interest under 24(b), the extra ₹50,000 NPS self-contribution under 80CCD(1B). Kept: the standard deduction and the employer's NPS contribution under section 80CCD(2). Source: Income Tax Department, New Tax vs Old Tax Regime FAQs, incometax.gov.in, as on 2 Nov 2026.

The 80CCD(2) carve-out deserves attention because it is the one salary-linked deduction that survived. Your employer's NPS contribution is deductible up to 14% of salary (basic plus DA) when you opt for the new regime — the same 14% that government employees get — against 10% of salary under the old regime for private-sector employees. Source: Income Tax Department deductions page, incometaxindia.gov.in, as on 2 Nov 2026. If your company contributes to NPS on your behalf, that contribution shaves taxable income in both regimes; if it does not, ask payroll — it costs the employer nothing extra if structured as a salary component, but that is a payroll design question, not a filing one.

HRA: the least-of-three rule, and where it still applies

House Rent Allowance exemption survives only in the old regime. The exempt slice is the least of three numbers:

• Actual HRA received from the employer
• Rent paid minus 10% of salary (basic plus DA)
• 50% of salary if you live in a metro (Delhi, Mumbai, Kolkata or Chennai), 40% elsewhere

Source: Income Tax Department, taxability of HRA FAQ (section 10(13A) and rule 2A), incometaxindia.gov.in, as on 2 Nov 2026.

Worked example: salary ₹60,000 a month, HRA ₹20,000, rent ₹18,000 in Pune (non-metro). The three numbers: ₹20,000; ₹18,000 − ₹6,000 = ₹12,000; 40% of ₹60,000 = ₹24,000. Least of the three: ₹12,000 a month — ₹1.44 lakh exempt for the year. The rest of the HRA is taxed as salary. Two housekeeping points: rent receipts and the landlord's PAN (if annual rent crosses ₹1 lakh) are the paperwork, and claiming both HRA and home-loan interest on the same property needs a justification — you cannot pay rent and interest to yourself for one house without an explanation.

When a salaried person should still pick the old regime

At filing time the choice is arithmetic, not loyalty. The old regime only wins when your deductions are large enough to outweigh its costlier slabs — historically, somewhere around ₹4-5 lakh of genuine deductions at middle salaries. The honest checklist before you tick it: real rent paid (HRA exemption as above), home-loan interest, 80C already invested (EPF alone rarely fills ₹1.5 lakh), health insurance under 80D, the NPS 80CCD(1B) top-up if you actually contribute. Our new vs old tax regime complete guide runs the full scenarios at every salary level; the filing-level version is this — below roughly ₹12.75 lakh of gross salary, the new regime with its rebate wins outright; above it, add up your defensible old-regime deductions and compute both ways once. Salaried taxpayers switch the choice inside the ITR itself; no separate form is needed unless you have business income, in which case Form 10-IEA applies.

The mistakes that cost salaried taxpayers real money

• Not reporting FD and RD interest. Banks deduct 10% TDS once your interest from that bank crosses ₹50,000 a year (₹1,00,000 for senior citizens), but the interest is fully taxable at your slab rate from the first rupee — the threshold only decides whether TDS is cut. The AIS sees the gross figure; a return that shows only the TDS amount is the classic mismatch that holds up refunds. Savings-account interest is taxable too — the old regime's 80TTA shields ₹10,000 of it, the new regime shields nothing. Source: TDS Rates 2025-2026, TRACES (tdscpc.gov.in), section 194A thresholds, as on 2 Nov 2026.
• Claiming TDS that is not in 26AS. The credit schedule must match the department's records; unmatched rows invite the wrong kind of correspondence.
• Trusting the employer's regime choice. Payroll may have deducted TDS on the old regime all year because you declared 80C in April. At filing, if the new regime is cheaper, choose it — you settle the tax, and a refund follows if you overpaid.
• Ignoring capital gains. One equity redemption above ₹1.25 lakh of LTCG, or any F&O activity, and ITR-1 no longer fits. Filing the wrong form is a defective return.
• Filing late and losing the interest clock. File by the due date and section 244A pays 6% a year on your refund from 1 April of the assessment year; file late and the clock restarts at your filing date. Source: section 244A, incometaxindia.gov.in, as on 2 Nov 2026.
• Skipping the 30-day e-verification. An unverified return is an invalid return, however perfect its arithmetic.

The dates, for a salaried return this season

Form 16 by 15 June 2026. The ITR-1/ITR-2 due date was 31 July 2026. Belated and revised returns close on 31 December 2026, with a ₹5,000 late fee (₹1,000 if total income is up to ₹5 lakh) under section 234F. E-verification within 30 days of filing. Processing under 143(1) within nine months of the end of FY 2026-27. Source: Income Tax Department e-filing portal and section 234F summaries, as on 2 Nov 2026. Senior citizens aged 75 and above whose income is only pension and interest in the same notified bank are exempt from filing entirely under section 194P — the bank handles the tax.

Where to go next

The ITR filing guide for AY 2026-27 is the cluster's hub — forms, deadlines, ITR-U, notices. The Form 26AS and refund guide fixes TDS mismatches and tracks refunds. For the full regime mathematics, our new vs old tax regime complete guide remains the deep dive, and if your salary is mostly consumed by NPS and 80C choices, the NPS tax benefits guide separates the old-regime and new-regime benefits cleanly.

This is educational content, not tax advice. For your specific salary structure — multiple employers, rent plus home loan, ESOPs — a chartered accountant sees angles this guide cannot.