ITR Filing India: Which Form + AIS / 26AS Reconciliation

Every year, the Income Tax Department sends lakhs of “defective return” notices under Section 139(9) because taxpayers pick the wrong ITR form. This post covers the decision: which form fits which income mix, and how to reconcile TDS credits in AIS + Form 26AS before hitting submit — the single biggest pre-submit check that saves rework.

The short answer

• ITR-1 (Sahaj): salary + one-house property + interest. Limits: total income ≤ ₹50L, no capital gains, no crypto, no foreign asset, not a director / unlisted-share-holder.
• ITR-2: salary + house property + capital gains + crypto + foreign assets + director / unlisted shares. No business income.
• ITR-3: everything in ITR-2 + business / profession income (PGBP head).
• ITR-4 (Sugam): presumptive business / profession under 44AD / 44ADA / 44AE. Use only if your business qualifies for presumptive taxation.

Decision tree — which ITR form?

1. Any business / profession income (not presumptive)? Yes → ITR-3.
2. Business under presumptive scheme (44AD / ADA / AE)? Yes → ITR-4 (Sugam).
3. Any capital gains / crypto / foreign asset / director or unlisted-share-holder status? Yes → ITR-2.
4. More than one house property? Yes → ITR-2.
5. Total income above ₹50 L? Yes → ITR-2 (even without capital gains).
6. Salary + 1 house + interest income only, under ₹50L? ITR-1 (Sahaj).

The “one crypto trade forces ITR-2” rule

Even a single VDA transaction during the year mandates ITR-2 or ITR-3. ITR-1 has no Schedule VDA. Filing ITR-1 with crypto is a defective return under Section 139(9); you’ll get 15 days to revise before the return is treated as non-existent. See our crypto tax post for the full VDA filing flow.

Same trap for any year where you sold property, mutual fund units realised as STCG/LTCG, or held foreign assets during the year (even if you didn’t sell).

AIS vs Form 26AS — two TDS-credit views

The IT Department offers two statements that overlap but aren’t identical:

Form 26AS

Classic tax-credit statement. Shows:

• TDS deducted against your PAN by various deductors
• Advance tax / self-assessment tax you’ve paid
• Refunds received
• Specified Financial Transactions (SFT) — high-value reporting

Source: TIN-NSDL; populated from quarterly TDS/TCS returns filed by deductors.

AIS (Annual Information Statement) + TIS

Introduced 2021. Richer than 26AS; includes:

• All 26AS data
• Interest from banks (even under TDS threshold)
• Mutual fund / equity transactions from stock exchanges
• Rent received (from tenants’ Form 26QC filings)
• Foreign remittances (LRS via Section 206C(1G))
• Property transactions (Section 194-IA, 194-IB)
• Demat activity (equity buy/sell reports from depositories)

Source: multiple data aggregators under Rule 114E. Accessed via e-filing portal → Services → AIS.

TIS (Taxpayer Information Summary) is the simplified rollup. Start with TIS for high-level confirmation, drill into AIS for line-item detail.

Reconciliation checklist — do this before hitting Submit

1. Download 26AS from e-filing portal. Filter to relevant AY.
2. Download AIS from the same portal. Separate tab.
3. Cross-check every TDS credit. Salary TDS should match Form 16 Part A. Bank FD TDS should match the bank’s interest certificate. Any mismatch → flag in AIS feedback with the correct value.
4. Check for mystery income in AIS. AIS often shows income you forgot — a dormant savings account’s interest, a small dividend, a mutual fund redemption. Include all in the ITR.
5. Verify SFT entries. Cash deposits > ₹10L in savings accounts, credit card payments > ₹10L, MF purchases > ₹10L — flagged to the department. Make sure your ITR income can support these.
6. Foreign asset disclosure via Schedule FA — any offshore bank account, foreign equity (RSUs, ESOPs of non- Indian parent), crypto on foreign exchanges. Missing Schedule FA triggers Black Money Act penalties regardless of whether there’s tax to pay.
7. Form 26QB / 26QC reconciliation — if you bought property > ₹50L, you’ve deducted 1% TDS and filed 26QB. Confirm the seller got the credit.
8. Tax paid section — line up TDS + TCS + advance tax + SAT paid entries in ITR against the 26AS summary.

Common defective-return triggers (Section 139(9))

1. Wrong ITR form (ITR-1 with crypto / capital gains / foreign assets / >₹50L income).
2. Mismatch in tax credit — claimed TDS of ₹X, 26AS shows ₹Y.
3. Zero income declared but return filed — auto- flagged.
4. Missing Schedule FA with foreign asset reported elsewhere (e.g., NRE account interest in 26AS).
5. Business income without mandatory audit disclosure (turnover > ₹1 Cr in business).

When a 139(9) notice arrives: login to e-filing portal, respond within 15 days. Typically upload a revised return with corrected form / schedules. Missing the 15-day window → return treated as never filed.

Deadlines FY 2025-26 / AY 2026-27

• 31 July 2026 — individual / HUF non-audit cases.
• 31 October 2026 — audit cases (business turnover > ₹1 Cr, profession > ₹75L).
• 30 November 2026 — transfer-pricing cases (international related-party transactions).
• 31 December 2026 — belated return (₹5K late fee if income > ₹5L, ₹1K otherwise). Can’t claim new-regime switch on belated.
• 31 December 2026 — revised return for any AY 2026-27 return filed earlier.

Regime choice on the return

From FY 2023-24 onwards, new regime is default. To stay on the old regime:

• Salaried: indicate on the ITR form itself. Can switch every year.
• Non-salaried with business income: file Form 10-IEA before the ITR due date. Once switched out of old regime, limited ability to switch back.

See our regime comparison for the decision logic. If you’re borderline, run both in the Income Tax Calculator before committing.

Documents to gather before you start

• PAN, Aadhaar, bank account details (for refund direct credit)
• Form 16 (salary TDS) from every employer you worked with
• Form 16A (TDS on non-salary income, from banks / tenants)
• Form 26AS + AIS downloads
• Interest certificates from every bank where you have a savings account or FD
• Rent receipts + landlord PAN (for HRA exemption)
• 80C / 80D / 80CCD investment proofs
• Demat / CAS (Consolidated Account Statement) for equity + MF transactions
• Crypto exchange statements + ₹ TDS summary u/s 194S
• Property sale deeds (if sold), improvement cost bills, Section 54 / 54EC investment proofs

When to use a CA vs file yourself

• Salary-only + 80C: file yourself. The portal’s pre-fill covers 90% of the work.
• Salary + 1 house + some MF: file yourself if comfortable with schedules; otherwise a ₹1,500-₹3,000 CA fee is cheap insurance.
• Property sale + Section 54 claim: use a CA. The exemption rules are unforgiving; a mis-claim costs lakhs.
• Business income / freelancer: use a CA, at least for the first year. Consolidated GSTR-9 + ITR-3 + books of accounts gets gnarly.
• Crypto + foreign assets: use a CA who handles these specifically. Most CAs haven’t caught up on VDA rules.

Refund timeline

Post-e-verification, refunds typically land in 15-45 days for ITR-1 / ITR-4. ITR-2 / ITR-3 can take 2-6 months because of manual scrutiny on capital gains and business schedules. Track via e-filing portal → View Returns / Processing Status.

Penalties for missing filing

• Late fee (Section 234F): ₹5,000 if total income > ₹5L; ₹1,000 otherwise. Auto-applied in belated returns.
• Interest u/s 234A: 1% per month on unpaid tax from due date to filing date.
• Interest u/s 234B / 234C: 1% per month for short payment / deferred payment of advance tax.
• Prosecution (rare but real): willful evasion > ₹25L can attract 6 months to 7 years imprisonment. Consult a tax professional immediately if there’s exposure.

Run your numbers pre-filing

Before you start the portal flow, run your whole-year numbers through the Income Tax Calculator to estimate total liability, the Capital Gains Calculator for each realised equity / MF / property transaction, the Crypto Tax Calculator for VDA gains, and the Salary Calculator for HRA exemption math. Any material mismatch with what the employer computed in Form 16 = investigate before filing.

Sources

• Income Tax Act Sections 139, 139(9), 234A/B/C/F, 44AD/ADA/AE.
• CBDT ITR form notifications (Notification 19/2024 for AY 2024-25, subsequent annual notifications).
• Rule 114E CBDT — SFT reporting thresholds.
• Income Tax Department (incometaxindia.gov.in) — e-filing portal, AIS, TIS, 26AS.
• CBDT Circular 4/2022 — employer TDS guidance.