It is that time of the year when taxpayers start gathering important tax-related documents to file their income tax return (ITR). While it is always good to file on time, experts suggest it may be prudent not to do so before June 15. The last date to file income tax returns for FY 2025-26 (AY 2026-27) is July 31, 2026. Many salaried taxpayers are already gearing up to submit their returns, hoping to finish early, receive refunds sooner, or avoid the usual rush closer to the deadline. However, before rushing to file, there is one crucial question to consider: just because the return-filing utility is available, does it automatically mean the return should be filed immediately? For a large number of taxpayers, the answer is no.
Why Filing Too Early Can Lead to Issues
Over the years, income tax filing has become increasingly dependent on data reconciliation, notes OP Yadav, former Principal Commissioner of Income Tax. Tax returns are no longer assessed solely on what a taxpayer reports. Information is cross-verified against data submitted by employers, banks, mutual funds, brokers, registrars, financial institutions, and other reporting entities through TDS filings and Statement of Financial Transactions (SFT) reporting. Filing a return too early can lead to unnecessary issues later.
Availability of Utility Does Not Mean Complete Data
A common misconception is that once the ITR utility is released, all related tax information has been fully updated. In many cases, taxpayers overlook caveats relating to the Annual Information Statement (AIS), Form 26AS, and pre-filled return data. At the start of the filing season, several statutory filings for the final quarter of FY 2025-26 are still under process. Key records such as the AIS, Form 26AS, and pre-populated return details may not yet capture the complete set of financial transactions for the year. This is especially important for salaried individuals who earn income from other sources, including interest earnings, rental receipts, capital gains, dividend income, or professional or freelance income. Filing solely because the utility is available could lead to omissions in income reporting, mismatches in tax records, or difficulties in claiming the correct tax credit.
Reporting Process Continues After Utility Release
The release of ITR filing utilities does not mark the completion of the tax reporting cycle. Several important disclosures continue to flow into the tax system weeks after the utilities become available, says OP Yadav.
1. Salary-Related TDS Information May Not Be Fully Updated
For the quarter ending March 2026, employers are required to submit Form 24Q, the quarterly salary TDS statement, by May 31, 2026. Until these filings are uploaded and processed by the tax department, salary information may not appear completely in the AIS, TDS credits may not be reflected in full, Form 26AS could remain partially updated, and pre-filled ITR fields may not capture the final numbers. Since many companies file these returns closer to the deadline, employees who rush to file may do so before the relevant salary and TDS details are fully reflected.
2. TDS Details on Non-Salary Income May Also Be Pending
The same issue arises for income sources other than salary. Banks and other entities deducting tax at source are required to file quarterly TDS returns through Form 26Q for the March 2026 quarter by May 31, 2026. Until those statements are filed and processed, information relating to taxable receipts and corresponding TDS credits may not be completely visible. Taxpayers who file too early may find that the income reported does not align with data that later appears in AIS and Form 26AS once deductors submit their TDS returns.
Form 16 and Form 16A Still Awaited
Key tax documents such as Form 16 and Form 16A are issued only after the TDS reporting cycle is completed. As per Rule 31, employers must provide Form 16 to employees by June 15, 2026. Entities deducting tax on non-salary payments are required to issue Form 16A by mid-June for TDS deducted during the final quarter. These certificates play an important role in verifying and reconciling tax information, including income reported, TDS credits, eligible tax deductions, entries in AIS, and information in Form 26AS. Submitting a return before these documents are available and reconciled increases the chances of discrepancies, which may later require corrections or additional compliance, says OP Yadav.
SFT Disclosures Can Significantly Change AIS Data
TDS information is not the only source feeding into the AIS. The statement is also updated through filings under the Statement of Financial Transactions (SFT) framework prescribed under Section 285BA. Specified reporting entities must submit these statements by May 31, 2026, covering high-value financial transactions, including investments in mutual funds, purchase and sale of securities, property transactions, credit card spending, large cash deposits and fixed deposits, significant banking transactions, interest income, and capital gains-related transactions. Until these filings are submitted and processed, the AIS may not present a complete picture of a taxpayer’s financial activity. This is significant because tax administration increasingly relies on data analytics and automated matching systems to identify inconsistencies between taxpayer disclosures and third-party information.
Filing Too Early Can Create Avoidable Problems
Many taxpayers are keen to submit returns as soon as the filing utilities become available. While early compliance may seem appealing, rushing can create more complications than benefits. An incorrectly filed return can lead to issues such as notices from data mismatches, inability to claim full TDS credit, delays in receiving refunds, additional tax demands, rectification requests, or the need to file a revised return. In practice, taxpayers often spend considerably more time correcting errors in a hastily filed return than they would have spent waiting for the underlying tax information to be fully updated. However, waiting for complete data should not be confused with delaying filing beyond the prescribed deadline. Missing the due date can result in the loss of certain tax benefits, including the flexibility to switch tax regimes where permitted, OP Yadav concludes.
