ITR Filing 2026: With the end of the financial year, discussions regarding Income Tax Returns (ITR) intensify among employees and small businessmen. Often a large section of people believe that if their total income is below the tax slab or their tax liability becomes zero after investment, then there is no need to file returns. If you also think like this, then it can prove to be a big mistake for your financial health. In fact, filing ITR is not just a process of paying taxes to the government, but it is a strong document of your financial discipline and future planning.
It is often seen that even if your total income does not come under the ambit of tax, your TDS is deducted through different means. Be it the interest on fixed deposits (FD) kept in the bank, your salary or small income from freelancing, as per the rules, banks or companies deduct tax after a certain limit.
For example, if the annual interest on the FD of a senior citizen is more than Rs 50,000, then the bank deducts 10 percent TDS. If you have not given your PAN to the bank, then this deduction can be up to 20 percent. Now if your total annual income is less than the tax exemption limit, you will get this deducted money back only when you file ITR. You cannot claim this refund without filing the return.
It is wrong to look at ITR only from tax point of view. This is the most authentic evidence of your financial creditworthiness. Whenever you go to take a loan from the bank for home or car in future, the bank will first ask you for ITR of the last three years. This is the government proof of your income on which banks trust the most.
Not only this, if you are planning to travel abroad, the embassies of many countries ask for copies of ITR from you at the time of visa application. This is proof that you are a responsible citizen of your country and your financial condition is stable. Therefore, filing returns even if there is zero tax opens new doors of possibilities for you.
Ups and downs are common in the world of investing. Many times there is loss when investing in stock market or mutual funds. Under income tax rules, if you file ITR on time, you can carry forward the capital loss incurred this year to the next several years. The advantage of this is that when you make profits on the same investments in the future, the old losses will be 'set-off' from those profits, thereby reducing your tax liability. But this facility is available only to those who file their returns within the time limit.
If we look at the tax rules of the year 2026, the new tax regime has been made quite attractive. Now there is no tax on income up to Rs 4 lakh, whereas the rate is fixed at 5 percent on income of Rs 4 to 8 lakh and 10 percent on income of Rs 8 to 12 lakh. However, due to the rebate available under Section 87A, people with net income up to Rs 12 lakh do not have to pay any tax. After adding the standard deduction of Rs 75,000 for the salaried class, this effective limit goes up to Rs 12.75 lakh.
At the same time, exemptions like 80C, 80D and HRA are still intact in the old tax regime. Even if your tax liability is coming to zero, do not forget to match Form 26AS and AIS to maintain records and organize your income in the government database.
