Introduction
Army personnel need to be careful while filing their income tax return for AY 2026-27. Salary income, pension income, capital gains, special allowances, tax regime selection and correct ITR form must be checked properly before filing.
If the return is filed incorrectly, the taxpayer may receive an income tax notice, face penalty, or experience delay in refund processing. Therefore, army personnel should file their ITR only after checking Form 16, AIS, TIS and applicable exemptions.
Main Discussion
For army personnel having salary income, pension income or capital gains, the income tax return must be filed within the due date. As discussed, if there is no business income and no tax audit requirement, the last date to file ITR for FY 2025-26 / AY 2026-27 is 31 July 2026.
If the return is not filed by this date, a belated return can still be filed up to 31 December 2026. However, late fee will apply. As discussed, if income is more than ₹5 lakh, late fee will be ₹5,000. If income is below the specified limit, late fee will be ₹1,000.
If any mistake is made in the return, a revised return can be filed up to 31 March 2027. If the return is not filed even after the normal period, an updated return may be filed up to 31 March 2031, which is 48 months from the end of the assessment year. However, in such cases, higher tax may apply, ranging from 25% to 70%. Therefore, army personnel should try to file their return by 31 July 2026 itself.
Army personnel may also get certain special benefits under income tax, but these benefits are available only if they opt for the old tax regime. For example, highly active field area allowance is exempt up to ₹4,200 per month. Counter insurgency allowance is exempt up to ₹3,900 per month. Island duty allowance is exempt up to ₹3,250 per month if the posting is in Andaman, Nicobar or Lakshadweep Islands.
Other exemptions discussed include high altitude allowance. If the posting is between 9,000 feet and 15,000 feet, exemption is available up to ₹1,060 per month. If the posting is above 15,000 feet, exemption is available up to ₹1,600 per month. Siachen allowance is exempt up to ₹7,000 per month for eligible personnel posted in Jammu and Kashmir. Gallantry award pension, such as pension related to Param Vir Chakra or Maha Vir Chakra, is also exempt.
However, these exemptions should be claimed only up to the prescribed limits and only when the taxpayer has proper proof. Army personnel should check their salary slip and Form 16 before claiming these allowances. If the allowance is not mentioned in Form 16 or salary records, the exemption should not be claimed casually.
The expert discussion also highlights that many taxpayers claimed such allowances incorrectly in the previous year and received income tax notices. Wrong claim of allowance may be treated as misreporting, and penalty of 200% may be levied for filing an incorrect return.
Army personnel must also choose between the old tax regime and new tax regime after proper analysis. Even if the employer has deducted tax under one regime, the taxpayer may choose another regime while filing the return. In the old regime, exemptions and deductions may be available if proof is maintained. In the new regime, deductions are not available, but tax rates are lower and standard deduction of ₹75,000 is available. As discussed, in the new regime, income up to ₹12 lakh may not attract tax because rebate of ₹60,000 is available. In the old regime, rebate is available only up to ₹5 lakh income.
Practical Impact
The correct ITR form is also important.
Most army personnel file ITR-1 if total income is up to ₹50 lakh, the person is resident in India, and income is from salary, pension, up to two house properties, other sources such as bank interest, dividend income, or long-term capital gain up to ₹1,25,000.
If income exceeds ₹50 lakh, or there are capital gains, more than two house properties, foreign assets, or other eligible incomes without business income, ITR-2 may be required.
Retired army personnel who start consultancy or business after retirement may have to file ITR-3 or ITR-4. ITR-4 applies where income is declared under the presumptive scheme and books are not required to be maintained, with income shown at 6% or 8%. ITR-3 is generally used by businessmen.
Before filing ITR, army personnel should collect Form 16 from the employer. If arrears are received, Form 10E should be filed on the income tax portal before claiming relief in ITR. AIS and TIS should also be checked before filing the return. As discussed, it is generally better to file after 15 June, when details are usually updated on the income tax portal.
Conclusion
Army personnel should not file ITR in a hurry. They should first check the correct tax regime, eligible allowances, proper ITR form, Form 16, AIS, TIS and any arrear relief requirement.
Incorrect exemption claims may lead to notice and penalty. Timely and accurate filing can help avoid compliance issues and ensure faster refund processing.
key takeaways
- Last date for ITR filing for AY 2026-27 is 31 July 2026.
- Belated return can be filed up to 31 December 2026 with late fee.
- Revised return can be filed up to 31 March 2027.
- Updated return may be filed up to 31 March 2031, but higher tax may apply.
- Army allowances are available only under the old tax regime.
- Exemptions should be claimed only if supported by salary slip or Form 16.
- Wrong allowance claim may be treated as misreporting and may attract 200% penalty.
- New regime gives standard deduction of ₹75,000.
- Correct ITR form should be selected based on income type and total income.
- Form 10E should be filed before claiming relief on arrears.
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