ITR Changes Analysis AY 2026-27

Latest Changes in ITR-1, ITR-2 & ITR-4

Detailed Analysis for AY 2026-27 (FY 2025-26)

The Income Tax Department has rolled out updated ITR utilities for Assessment Year 2026-27. These updates introduce a blend of significant compliance relaxations for small taxpayers alongside tighter disclosure checks for high-net-worth investors.

1. Key Relaxations and Changes in ITR-1 (Sahaj)

  • Two House Properties Allowed: Eligibility has expanded to include individuals with income or losses from up to two house properties (previously limited to one).
  • Equity Capital Gains Reporting: Resident individuals can report LTCG under Section 112A directly in ITR-1 if total gains from listed shares/MFs don't exceed ₹1.25 Lakh and there are no brought-forward losses.
  • Tracking Unrealised Rent: A new field, "The amount of rent which cannot be realised," helps landlords isolate unrecovered amounts from gross taxable rent.
  • Removal of Foreign Pension Disclosure: Details regarding overseas retirement pension accounts are no longer mandatory under ITR-1.

2. Enhanced Capital Gain & Asset Reporting in ITR-2

  • Granular Capital Gains Disclosures: Taxpayers must provide line-by-line transaction dates, purchase costs, and sale metrics for capital assets.
  • Removal of Old Capital Gains Rates: Legacy tax structures (15% STCG and 10% LTCG) have been eliminated from the form fields.
  • Buyback Loss Tracking: A dedicated section has been introduced for reporting losses stemming specifically from share buybacks.
  • Foreign Assets & Multi-Contact Data: Stricter validation for foreign holdings. Providing a valid secondary mobile number and email address is now mandatory.

3. Streamlined Disclosures in ITR-4 (Sugam)

  • Two House Properties for Presumptive Filers: Presumptive taxation filers (44AD/44ADA) can now use ITR-4 even with two house properties.
  • Mandatory Bank Balance Disclosure: Small businesses must explicitly declare exact bank balances as of March 31, 2026, across all operational accounts.
  • Section 112A Integration: Small-scale equity investors using the presumptive scheme can now file LTCG profits (up to ₹1.25 Lakh) within this form.

4. Universal Compliance Requirements

  • Section 80GGC (Political Donations): Must provide the exact corporate PAN and legal registered name of the political party.
  • Section 80G (Charitable Donations): Must provide the banking Transaction Reference Number (TRN) and bank IFSC code for the donation.
  • Representative Assessee Flag: A mandatory checkbox to identify if the return is filed by a legal guardian or representative.
  • Schedule EI (Exempt Income) Modification: The "Any Other" text box has been removed. Exempt transfers must now be supported by strict internal accounting trails.

5. Critical Due Dates & Deadlines

Category of Taxpayer Forms Filing Deadline
Salaried Individuals & HNWIs (Non-Audit) ITR-1 & ITR-2 July 31, 2026
Business & Professional (Non-Audit) ITR-3 & ITR-4 August 31, 2026
Corporate & Tax Audit Cases ITR-3, 5, 6 October 31, 2026
Belated Return Submission All Forms December 31, 2026
Revised Return Deadline All Forms March 31, 2027
💡 Filing Tip

Wait until mid-to-late June before finalizing your filings. This ensures that TDS submissions from employers and banks are fully processed and visual anomalies within Form 26AS, AIS, and TIS are resolved.