ITR filing 2026: Confused by the 'reason for filing ITR' question? Here's what taxpayers need to know

With the July 31 deadline for filing Income Tax Returns (ITRs) fast approaching, a new question on the Income Tax Department's e-filing portal, "Reason for filing Income Tax Return", has emerged as an unexpected source of confusion for taxpayers.

The field has become one of the most searched tax-related queries this filing season, with many fearing that selecting the wrong option could invite scrutiny or delay refunds, according to a report by Upstox.

Reason for filing Income Tax Return

• Claiming a tax refund: If you want to get back excess TDS or tax paid.
• Carrying forward losses: If you want to carry forward losses from shares, mutual funds, business, etc.
• Mandatory filing: If the Income Tax Act requires you to file even if your income is below the exemption limit.
• Others: If none of the above apply but you still want to file your ITR.

READ THIS: July 31 ITR deadline: Can the return filing end date be extended if e-filing portal glitches continue?

Tax experts, however, say the confusion has less to do with tax calculations and more with the wording of the question.

CA Siddharth Maurya, Managing Director of Vibhavangal Anukulkara Pvt Ltd, told Upstox that the uncertainty arises because taxpayers often struggle to connect their practical reason for filing with the legal language used in the Income Tax Act.

"The very common confusion about the 'Reason for Filing ITR' comes from a mismatch between what a taxpayer basically means to do, like doing a civic duty, and the heavy, intimidating language inside the Income Tax Act," Maurya said.

He added that taxpayers often hesitate because they are unsure whether their reason for filing aligns with the options presented on the portal.

Echoing similar concerns, Shourya Garg, Tax Partner at SW India, explained that different taxpayers fall under different filing categories, and choosing the first seemingly relevant option may not always be appropriate.

"A person filing simply because their income crossed the basic exemption limit is in a completely different bucket from someone filing only because of one of the mandatory conditions, like high foreign travel spend or large deposits, even if their actual taxable income is below the limit. Taxpayers often pick the first option that seems to loosely apply, without realising the wrong selection can flag the return for the wrong kind of scrutiny later. It genuinely needs a slower read before answering," Garg told Upstox.

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Meanwhile, Rakesh Goel, Lead Consultant at AQUILAW, clarified that taxpayers should not panic if more than one reason appears to apply.

"The most common confusion being observed is around the newly introduced 'reason for filing ITR' field. Many taxpayers assume that selecting an incorrect reason could affect their tax liability or invite scrutiny. In reality, the field is largely intended to identify the statutory basis that makes filing of the return necessary," Goel said.

Offering practical guidance, CA Abhishek Soni, CEO and Co-founder of Tax2win, advised taxpayers to select the option that best reflects their situation whether it is income above the exemption limit, claiming a refund, carrying forward losses, mandatory filing requirements, or voluntary filing. Experts also recommend reviewing Form 26AS, the Annual Information Statement (AIS), and Form 16 before submitting returns to ensure consistency and avoid mismatches, especially as the filing deadline nears.