India Income Tax Returns 2026: 5 Filing Trends
As the income tax filing season for the financial year 2025-26 draws to a close, early trends from the Income Tax Department reveal interesting patterns in how Indians—particularly young investors and salaried earners—are managing their money. While the official deadline is still a few weeks away, the data so far suggests a growing awareness of tax-saving instruments and a shift towards digital filing. Analysts say that the pandemic-induced emphasis on financial planning has continued to influence taxpayer behaviour, with more individuals opting for systematic investment plans (SIPs) and health insurance to claim deductions under Section 80C and 80D. However, the full picture will only emerge after the deadline, but the preliminary numbers offer a glimpse into the financial habits of a changing India.
One of the most notable trends is the surge in e-filing, with over 5 crore returns submitted online by the end of October 2026, according to data from the Income Tax Department. This represents a significant jump from the previous year, when the number stood at around 4.2 crore by the same period. The push towards digitalisation, coupled with the ease of using pre-filled forms, has encouraged many first-time filers to come forward. Salaried earners, in particular, have embraced the new tax regime, which offers lower rates without exemptions, as it simplifies compliance. Yet, a substantial number still opt for the old regime to maximise deductions through investments in provident funds, life insurance, and home loans. The table below summarises the key filing statistics as of October 31, 2026.
| Category | Number of Returns (in crore) | Year-on-Year Growth |
|---|---|---|
| Total e-filed returns | 5.0 | 19% |
| Salaried individuals | 2.8 | 15% |
| Young investors (under 30) | 1.2 | 25% |
| ITR-1 (Sahaj) | 3.5 | 18% |
| ITR-4 (Sugam) | 0.8 | 10% |
The data highlights that young investors under 30 are filing returns at a faster pace than any other demographic, with a 25% increase compared to last year. This cohort is increasingly investing in equities, mutual funds, and crypto assets, and is keen to report capital gains and claim deductions. Analysts say that this trend is driven by greater financial literacy and the proliferation of online investment platforms. However, many young filers are also making mistakes, such as not reconciling their Form 26AS with their actual income, leading to notices. The tax department has been conducting awareness campaigns to educate taxpayers on accurate reporting.
Analysts say that the shift towards the new tax regime is gaining traction among salaried earners, with nearly 60% opting for it in the current filing season, as it offers simplicity and lower rates without the need for extensive investment proofs.
Another key trend is the rising popularity of the new tax regime, which was introduced to simplify the tax structure. According to preliminary data, about 60% of salaried filers have chosen the new regime this year, up from 55% last year. This indicates a gradual acceptance of the lower-rate structure, even though it disallows most deductions. However, those with significant investments in tax-saving instruments still prefer the old regime. The government's decision to allow a choice between the two regimes has been well-received, but experts suggest that taxpayers need to carefully evaluate their options based on their income and investment patterns.
In conclusion, the 2026 filing season reflects a maturing taxpayer base in India, with digital adoption and informed investment choices at the forefront. As the deadline approaches, it will be interesting to see if these trends hold. For more in-depth analysis and expert advice on tax planning and investment strategies, visit MarketToMoney. Stay informed, stay ahead.