ITR-1 & ITR-4 Are Live: Why Filing Your Income Tax Return Right Now Is a Major Mistake

The Income Tax Department has officially opened the e-filing portal for ITR-1 (for salaried individuals) and ITR-4 (for presumptive businesses) for Assessment Year (AY) 2026-27. While early filing sounds like a smart move to get a fast refund, tax professionals are strongly advising taxpayers to hold their horses.

Filing your tax return right now can trigger a Tax Credit Mismatch Notice under Section 143(1). Here is why you must wait.

The Root of the Problem: The TDS and Form 16/130 Timeline

The automated processing system of the Income Tax Department relies entirely on matching what you declare in your ITR with the data uploaded by third parties (employers, banks, and clients).

The legal deadlines for these entities to submit final data for the Financial Year (FY) 2025-26 are still pending:

1. TDS Return Filing Deadline: Deductors (employers, deductors of professional fees, banks) have until May 31, 2026, to file their Q4 TDS returns.

2. Form 16 / Form 130 Issuance: Employers have until June 15, 2026, to issue the standard tax certificate (including the newly introduced Form 130 under the updated rules).

Why Early Filing Triggers Notices:

• Incomplete Form 26AS & AIS: Because final TDS returns have not been fully processed by the government, your Form 26AS and Annual Information Statement (AIS) do not yet reflect all the tax that was deducted from your income over the past year.

• The Refund Trap: If you file your return using your internal calculations or salary slips before these statements auto-update, the portal's system will see a mismatch between the tax credit you claim and the tax credit available in the system.

• The Consequences: The portal will automatically flag your return as "Defective" or process it by disallowing your unverified TDS claims, resulting in a Tax Demand Notice instead of a refund.

What Should Taxpayers Do?

Exercise patience. The golden window to begin filing your returns starts after June 15, 2026, once Form 26AS and your AIS are completely locked, synchronized, and reconciled.

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