Taxpayers filing their income tax returns for Financial Year (FY) 2025-26 (Assessment Year 2026-27) will encounter several changes across the Income Tax Return (ITR) forms this year. From more detailed disclosures on capital gains and trading activities to mandatory reporting of bank balances and additional information for tax deduction claims, the revised forms are designed to align more closely with the tax department's data-driven scrutiny framework.
Tax experts say the changes reflect the government's increasing reliance on data analytics and cross-verification using information available through the Annual Information Statement (AIS), TDS records, brokerage reports and other third-party data sources. As a result, taxpayers may need to exercise greater caution while filing returns, as discrepancies between the return and information already available with the department could trigger notices or scrutiny.This year's income tax return forms reflect the government's increasing focus on data matching and transparency. Taxpayers should avoid treating return filing as a routine compliance exercise. With more disclosures being sought, accuracy and consistency between the return and information available with the tax department have become more important than ever,” said Shreya Gupta Goyal, Chartered Accountant.What are the key changes?The revised ITR forms seek to capture more detailed information from taxpayers, particularly in areas such as capital gains, trading income, bank accounts and tax deduction claims. Here's a look at the key changes across different ITR forms.
ITR-1 (Sahaj)
Income from up to two house properties : One of the key changes in ITR-1 is that taxpayers can now report income from up to two house properties and still use the form. Earlier, taxpayers with income from more than one house property had to move to ITR-2.LTCG under Section 112A up to Rs 1.25 lakh : Taxpayers earning long-term capital gains from listed equity shares or equity-oriented mutual funds covered under Section 112A can now report such gains in ITR-1, provided the gains do not exceed Rs 1.25 lakh during the financial year.New fields for secondary address, mobile number and email ID: The form now contains additional fields where taxpayers are needed to provide a secondary address, phone number and email ID.Overseas pension account: Taxpayers receiving pension income from overseas sources are no longer required to furnish details of their foreign pension accounts in ITR-1.ITR-2More detailed capital gains reporting introduced: Taxpayers filing ITR-2 will now be required to provide more detailed information relating to capital gains transactions. Depending on the nature of the asset, details such as date of acquisition, date of transfer, sale consideration, cost of acquisition and applicable tax treatment may need to be disclosed separately.Separate disclosure for buyback losses added: The form now includes a separate reporting field for losses arising from share buyback transactions.Earlier, any amount received by shareholders on account of a share buyback was treated as deemed dividend income and taxed according to the individual's applicable income tax slab rate.However, from April 1, 2026, proceeds received from the buyback of shares will be taxed under the capital gains provisions instead of being treated as deemed dividends.Foreign asset and foreign income reporting continues: Resident taxpayers holding foreign assets, foreign bank accounts, foreign shares, financial interests outside India or earning foreign income will continue to be required to disclose these details in the return.Secondary contact details introduced: Similar to ITR-1, taxpayers filing ITR-2 can now provide additional address, mobile number and email details.ITR-3
Separate disclosure for F&O, intraday, commodity and currency trading: Taxpayers engaged in trading activities will now have to disclose futures and options (F&O), intraday equity trading, commodity trading and currency trading separately.Simplified auditor disclosure requirements: Certain auditor-related reporting fields have been rationalised in the latest version of ITR-3. The change is expected to reduce the compliance burden for taxpayers whose accounts are subject to tax audit while retaining the essential information required by the department.Secondary address and contact details added: Taxpayers can now furnish an alternate address, mobile number and email ID in ITR-3.Enhanced reporting for business and high-value transactions: ITR-3 now seeks more detailed information relating to business operations and certain high-value financial transactions.ITR-4 (Sugam)Income from up to two house properties now permitted: Taxpayers opting for the presumptive taxation scheme under Sections 44AD, 44ADA or 44AE can now report income from up to two house properties while continuing to use ITR-4.LTCG under Section 112A up to Rs 1.25 lakh can be reported: Taxpayers filing ITR-4 can now report long-term capital gains from listed shares and equity-oriented mutual funds up to Rs 1.25 lakh under Section 112A.Bank balance disclosure as on March 31, 2026 made mandatory: A significant new requirement in ITR-4 is the mandatory disclosure of the balance available in bank accounts as on March 31, 2026.Overseas pension account details no longer required: Taxpayers filing ITR-4 will no longer be required to provide details of overseas pension accounts. The relaxation reduces reporting requirements and simplifies the filing process for eligible taxpayers receiving pension income from abroad.“Recently, many taxpayers received notices regarding donations made to political parties for which they claimed a 100 percent deduction, but the political party's registration was subsequently cancelled. To check more details about such donations, a new column is added in the ITR to provide the PAN of that political party,” said Mihir Tanna, Associate Director, S.K. Patodia LLP.Due date for filing ITRDue dates for filing Income Tax Returns (ITRs) vary by taxpayer category and income type. Salaried individuals will continue to have the earliest filing deadline, while businesses and audit cases will get additional time.From this year, the deadline for non-audit business cases or trusts is extended till 31st August. For example, individuals earning income from Futures and Options (F&O) trading have time till August 31 to file their ITR, unlike most salaried taxpayers whose deadline is July 31. The extension is mainly because income from F&O trading is treated as business income under the Income Tax Act.The date for revised return has also been revised "The window for filing revised returns has been extended, with revised ITR filing between January 2027 to March 2027 on payment of a late fee, ranging from Rs 1,000 for income below Rs 5 lakh to Rs 5,000 above that threshold," said Pranav Sai S, Tax Expert at ClearTax.Experts say one of the biggest mistakes taxpayers make is assuming that if an income item is not manually entered in the return, it will go undetected. Today, the tax department receives information from banks, mutual funds, brokers, employers and various other reporting entities. A careful review of the return before submission can help prevent unnecessary scrutiny and notices later.
Income from up to two house properties : One of the key changes in ITR-1 is that taxpayers can now report income from up to two house properties and still use the form. Earlier, taxpayers with income from more than one house property had to move to ITR-2.LTCG under Section 112A up to Rs 1.25 lakh : Taxpayers earning long-term capital gains from listed equity shares or equity-oriented mutual funds covered under Section 112A can now report such gains in ITR-1, provided the gains do not exceed Rs 1.25 lakh during the financial year.New fields for secondary address, mobile number and email ID: The form now contains additional fields where taxpayers are needed to provide a secondary address, phone number and email ID.Overseas pension account: Taxpayers receiving pension income from overseas sources are no longer required to furnish details of their foreign pension accounts in ITR-1.ITR-2More detailed capital gains reporting introduced: Taxpayers filing ITR-2 will now be required to provide more detailed information relating to capital gains transactions. Depending on the nature of the asset, details such as date of acquisition, date of transfer, sale consideration, cost of acquisition and applicable tax treatment may need to be disclosed separately.Separate disclosure for buyback losses added: The form now includes a separate reporting field for losses arising from share buyback transactions.Earlier, any amount received by shareholders on account of a share buyback was treated as deemed dividend income and taxed according to the individual's applicable income tax slab rate.However, from April 1, 2026, proceeds received from the buyback of shares will be taxed under the capital gains provisions instead of being treated as deemed dividends.Foreign asset and foreign income reporting continues: Resident taxpayers holding foreign assets, foreign bank accounts, foreign shares, financial interests outside India or earning foreign income will continue to be required to disclose these details in the return.Secondary contact details introduced: Similar to ITR-1, taxpayers filing ITR-2 can now provide additional address, mobile number and email details.ITR-3
Separate disclosure for F&O, intraday, commodity and currency trading: Taxpayers engaged in trading activities will now have to disclose futures and options (F&O), intraday equity trading, commodity trading and currency trading separately.Simplified auditor disclosure requirements: Certain auditor-related reporting fields have been rationalised in the latest version of ITR-3. The change is expected to reduce the compliance burden for taxpayers whose accounts are subject to tax audit while retaining the essential information required by the department.Secondary address and contact details added: Taxpayers can now furnish an alternate address, mobile number and email ID in ITR-3.Enhanced reporting for business and high-value transactions: ITR-3 now seeks more detailed information relating to business operations and certain high-value financial transactions.ITR-4 (Sugam)Income from up to two house properties now permitted: Taxpayers opting for the presumptive taxation scheme under Sections 44AD, 44ADA or 44AE can now report income from up to two house properties while continuing to use ITR-4.LTCG under Section 112A up to Rs 1.25 lakh can be reported: Taxpayers filing ITR-4 can now report long-term capital gains from listed shares and equity-oriented mutual funds up to Rs 1.25 lakh under Section 112A.Bank balance disclosure as on March 31, 2026 made mandatory: A significant new requirement in ITR-4 is the mandatory disclosure of the balance available in bank accounts as on March 31, 2026.Overseas pension account details no longer required: Taxpayers filing ITR-4 will no longer be required to provide details of overseas pension accounts. The relaxation reduces reporting requirements and simplifies the filing process for eligible taxpayers receiving pension income from abroad.“Recently, many taxpayers received notices regarding donations made to political parties for which they claimed a 100 percent deduction, but the political party's registration was subsequently cancelled. To check more details about such donations, a new column is added in the ITR to provide the PAN of that political party,” said Mihir Tanna, Associate Director, S.K. Patodia LLP.Due date for filing ITRDue dates for filing Income Tax Returns (ITRs) vary by taxpayer category and income type. Salaried individuals will continue to have the earliest filing deadline, while businesses and audit cases will get additional time.From this year, the deadline for non-audit business cases or trusts is extended till 31st August. For example, individuals earning income from Futures and Options (F&O) trading have time till August 31 to file their ITR, unlike most salaried taxpayers whose deadline is July 31. The extension is mainly because income from F&O trading is treated as business income under the Income Tax Act.The date for revised return has also been revised "The window for filing revised returns has been extended, with revised ITR filing between January 2027 to March 2027 on payment of a late fee, ranging from Rs 1,000 for income below Rs 5 lakh to Rs 5,000 above that threshold," said Pranav Sai S, Tax Expert at ClearTax.Experts say one of the biggest mistakes taxpayers make is assuming that if an income item is not manually entered in the return, it will go undetected. Today, the tax department receives information from banks, mutual funds, brokers, employers and various other reporting entities. A careful review of the return before submission can help prevent unnecessary scrutiny and notices later.
Report by Ayush Mishra
Source:Network18
Disclaimer: The views and investment tips expressed by experts are their own and not those of us. We advise readers to check with certified experts before taking any investment decisions.
Disclaimer: The views and investment tips expressed by experts are their own and not those of us. We advise readers to check with certified experts before taking any investment decisions.
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