This information is important if you're employed, a pensioner, or earning profits from investments like a home, land, shares, or mutual funds. Taxpayers whose income comes solely from salary and capital gains are required to file their Income Tax Return (ITR) by July 31, 2026.

If you haven't filed your ITR yet, you're not alone. More than 30 million taxpayers in the country haven't filed their returns yet. The Income Tax Department's e-filing portal has over 140 million taxpayers. As of July 21, 31.5 million ITRs have been filed. Of these, verification of 29.6 million returns has been completed, and processing of 18.7 million returns has been completed.

What happens if ITR is not filed by July 31?

If for some reason you couldn't file your ITR by July 31st, there's still a chance to file it. This is called a billed return. This return can be filed until December 31st, 2026.

However, this facility is not free. If the return is filed late, if there is any tax due, interest of 1% is charged every month.

Delayed filing penalties range from ₹1,000 to ₹5,000.
Late filing fees, along with interest, will be charged. If your annual income exceeds ₹5 lakh, you'll be charged a penalty of ₹5,000. For taxpayers with incomes up to ₹5 lakh, the penalty is ₹1,000.

Additionally, there's another significant disadvantage: You may lose the opportunity to offset losses from the sale of shares, mutual funds, property, or business income against next year's income. Therefore, filing your ITR before July 31st is beneficial.

Even if the new Income Tax Act comes into force, why file ITR this year as per the old law?

Even though the new Income Tax Act 2025 has come into effect in the country, ITRs filed this year will still need to be filed according to the rules of the Income Tax Act 1961. This is because the ITRs currently filed are for the assessment year 2026-27. These returns are being filed based on income earned in the financial year 2025-26.

This financial year ended on March 31, 2026, and the old Income Tax Act was in effect at that time. Therefore, the rules of the 1961 Act will continue to apply to income for that year for tax calculation, tax deductions, and ITR filing.

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