Complete Guide: ITR Forms, Documentation & New Tax Regime (FY 2025-26)
Filing your Income Tax Return (ITR) is a responsibility every taxpayer in India must fulfill. This comprehensive guide covers which form fits you, how to avoid audit notices with proper documentation, and a detailed comparison of the Old vs. New Tax Regime for the upcoming assessment year.
1. Which ITR Form Fits You?
Choosing the wrong form can lead to rejection of your return or notices. Here is a quick breakdown:
Best for: Salaried employees & Pensioners.
- Income up to ₹50 Lakh.
- Sources: Salary, 1 House Property, Interest.
- ❌ Not for: Business income or Directors.
Best for: Investors & Capital Gains.
- Individuals/HUFs without business income.
- Includes Capital Gains, Foreign Assets, >1 House Property.
- ❌ Not for: Business/Prof. income.
Best for: Business Owners.
- Proprietors, Professionals (Doctors, CAs).
- Partners in firms.
- Covers all heads of income.
Best for: Presumptive Taxation.
- Small biz/freelancers under Sec 44AD/ADA.
- Income up to ₹50 Lakh.
- ❌ Not for: Foreign assets or LLPs.
2. Avoiding Fake Claims & Audits
Every year, thousands of taxpayers claim deductions without proof. While genuine claims reduce tax, fake claims trigger penalties.
🚫 Risks of Unsupported Claims
- Tax notices and re-assessment by the Income Tax Department.
- Penalty ranging from 50% to 200% of tax evaded.
- Possible prosecution and loss of credibility.
Required Documentation for Deductions
3. Old vs New Regime: AY 2026-27
For FY 2025-26, the New Regime is the default. It offers lower rates but removes most exemptions. The Old Regime retains high tax rates but allows deductions.
| Feature | Old Regime | New Regime (FY 25-26) |
|---|---|---|
| Exemption Limit | ₹2.5L / ₹3L (Senior) | ₹4,00,000 |
| Deductions (80C, HRA) | Allowed (High Planning) | Not Allowed (Simple) |
| Zero Tax Rebate | Income ≤ ₹5 Lakh | Income ≤ ₹12 Lakh |
| Standard Deduction | ₹50,000 | ₹75,000 |
Example Scenarios
Result: In most cases, the New Regime is better due to the rebate limit (up to ₹12L) and lower slabs, unless you have massive HRA/Home Loan claims.
Result: If you have Home Loan Interest + 80C + Health Insurance + HRA totaling over ₹4.5 Lakhs, the Old Regime might save you more tax.
Conclusion
Selecting the right ITR form and Tax Regime is the first step in error-free filing. When in doubt, always consult a professional rather than guessing.
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