Gaurav Kenkre
For The Goan
For FY 2025-26, i.e. AY 2026-27, the return continues to be governed by the Income-tax Act, 1961, even though the new Income Tax Act, 2025 framework has commenced for later years. This position is clarified by the Income Tax Department FAQs on the interplay and transition from the Income-tax Act, 1961 to the Income Tax Act, 2025.
Filing an Income Tax Return is mandatory where total income exceeds the basic exemption limit under Section 139(1) of the Income-tax Act, 1961. For individuals below 60 years, the old regime exemption limit remains Rs 2,50,000, while under the new regime for AY 2026-27, income up to Rs 4,00,000 falls within the nil tax slab under Section 115BAC of the Income-tax Act, 1961.
Importantly, filing may be compulsory even where income is below the exemption limit. Filing is triggered by high-value indicators such as:
• Current account deposits exceeding Rs 1 crore
• Foreign travel expenditure exceeding Rs 2 lakh
• Electricity expenditure exceeding Rs 1 lakh
• Business turnover exceeding Rs 60 lakh
• Professional receipts exceeding Rs 10 lakh
• TDS/TCS of Rs 25,000 or more
• Savings account deposits of Rs 50 lakh or more
Timely ITR filing also has practical value. Banks and financial institutions commonly ask for two to three years of ITRs for loans, overdrafts and credit approvals. The return is also the formal route to claim refunds of excess TDS, TCS or advance tax, and it improves financial credibility for visa applications, government schemes and institutional verification.
The most important technical benefit is the preservation of losses. Business/profession losses and capital losses must generally be reported within the due date under Section 139(1) of the Income-tax Act, 1961, to be carried forward.
For AY 2026-27, the ordinary due dates are 31 July 2026 for other non-audit cases, 31 August 2026 for non-audit business/profession cases, 31 October 2026 for audit cases, and 30 November 2026 for transfer pricing cases under Section 139(1) of the Income-tax Act, 1961.
Late filing attracts consequences: a fee under Section 234F of the Income-tax Act, 1961 of up to Rs 5,000, restricted to Rs 1,000 where total income does not exceed Rs 5 lakh; interest under Sections 234A, 234B and 234C of the Income-tax Act, 1961; loss of certain carry-forward benefits; and possible departmental notices.
In short, ITR filing should not be seen merely as an annual compliance burden. It is a taxpayer’s financial record, legal safeguard, refund mechanism and credibility document rolled into one. A timely and correctly filed return protects the right to claim refunds, preserves eligible losses, reduces exposure to penalties and interest, and creates a clean financial trail for loans, visas, tenders, government benefits and future scrutiny.
For FY 2025-26, therefore, every taxpayer should review not only their taxable income but also the special mandatory filing triggers, and ensure that the return is filed accurately and within the prescribed due date.
(The writer, a Fellow Chartered Accountant (FCA), specialising in Goods, Services tax, Transfer Pricing and Income tax, is the co-author of the book ‘Comedium of Industrial Policy for MSMEs in Goa’ released by ICAI)
