New ITR Forms released for AY 2026-27 | What Has Changed?

This document covers

1. Background
2. What are the Changes to ITR Forms for AY 2026-27?
3. When to choose ITR-1
4. When to choose ITR-2
5. When to choose ITR-3
6. When to choose ITR-4

1. Background

For most taxpayers, it is not vital to know which ITR form to select, as EZTax.in will automatically select the correct ITR for you; however, this document generally offers you an indication of what information the ITD requires from taxpayers.

2. What are the changes to ITR Forms for AY 2026-27?

1. Provision of Additional communication details (ITR-1):

   W.e.f AY 2026-27, the taxpayers filing ITR 1 are allowed to provide both primary and secondary mobile numbers and e-mail addresses. Until AY 2025- 26, ITR 1 used to capture only 1 mobile number and email id

2. Expanded Address Reporting in ITR Forms (ITR-1 /2/3/4):

   From AY 2026–27 onwards, taxpayers can now furnish both Primary and Secondary Address details in the ITR forms. Earlier, up to AY 2025–26, ITR forms permitted reporting of only a single address.

3. Simplified Representative Filing (ITR-1/2/3/4):

   From AY 2026–27, ITR-1 can be filed by a representative assessee (including for deceased persons) with only basic details such as name, contact number, and email ID of representative.

   Similarly, in ITR-2, ITR-3, and ITR-4, representative filing has been simplified. Only name, contact, and email ID of representative are required, and earlier requirements of address, PAN, and capacity of representative have been removed.

4. Removal of Section 89A Reporting (ITR-1 & ITR-4):

   From AY 2026–27, reporting of income from retirement benefit accounts maintained in notified and non-notified foreign countries u/s 89A has been removed from ITR-1 and ITR-4. Taxpayers having such income will now be required to file ITR-2 or ITR-3 from AY 2026–27 onwards.

5. Additional Disclosure Requirements u/s 80GGC-Political Donation (ITR- 1/2/3/4):

   Taxpayers are now required to disclose the name and PAN of the political party while claiming deduction under section 80GGC. This enhances transparency and ensures proper reporting of political contributions.

6. Mandatory Transaction Details for 80G -Donations (ITR-1/2/3/4):

   Taxpayers are now required to furnish transaction reference number (UPI/Cheque/IMPS/NEFT/RTGS) along with the bank IFSC code while claiming deduction u/s 80G. This improves verification and strengthens transparency in donation claims.

7. Dedicated Disclosure for Separate F&O Reporting (ITR-3):

   Separate reporting introduced for F&O trading, including turnover and income in P&L in ITR 3 for AY 2026-27. It helps the Income Tax Department improve tracking, reduce misreporting, and strengthen tax compliance amid rising derivatives activity.

8. Expanded Disability Classification u/s 80DD and 80U (ITR-1/2/3/4):

   The ITR forms now provide a detailed classification of disabilities u/s 80DD and 80U, including blindness, low vision, leprosy cured, hearing impairment, locomotor disability, mental illness, autism, cerebral palsy, and multiple disabilities. Earlier, the classification was broadly grouped into autism/cerebral palsy/multiple disabilities and others.

9. Revised Due Date for ITR-3 Filing (ITR-3):

   While the dropdown for selecting due dates continues, the option of 31st July has been replaced with 31st August for ITR-3. This reflects the revised due date as per Finance Act 2026.

10. Enhanced Cash Transaction Disclosure Framework (ITR-3):

    Earlier, taxpayers were required to indicate (Yes/No) whether cash receipts and payments were within 5% of total transactions. Now, they must select the applicable percentage slab (Up to 5% or More than 5%), directly impacting tax audit applicability under section 44AB.

11. Reduced Auditor Reporting Requirements in ITR Forms (ITR-3):

    ITR-3 has been rationalized to remove the requirement of furnishing specific auditor details, including membership number, firm registration details, auditor name, and UDIN. This reduces compliance burden in tax audit reporting.

12. Enhanced Reporting of Partnership Income Information-Schedule IF (ITR-3):

    Schedule IF now requires taxpayers to separately report interest and remuneration amounts received from partnership firms. This update improves transparency and completeness of income reporting

13. Enhanced Disclosure of Interest from Financial Institutions (ITR-2/3):

    Interest income reporting has been expanded with a separate field for interest from companies, NBFCs, and HFCs under the "other interest" category. This enables more detailed, structured, and segregated reporting of income sources.

14. Section 234I Fee - Separate Disclosure Introduced (ITR-1/2/3/4):

    ITR forms now include a separate disclosure for fee payable on revised returns filed post 31st December 2026 u/s 234I with reference to amendment in Finance Act 2026. This ensures better visibility and accurate fee computation

15. Enhanced House Property and Tenant Disclosure Requirements (ITR- 1/4):

    Taxpayers can now disclose up to 2 house properties in ITR-1 and ITR-4. Until AY 2025–26, only one house property was permitted, and taxpayers with more than one property were required to file ITR-2. Additionally, ITR-1 can now be used even in cases of co-ownership. The ITR for AY 2026–27 also introduces enhanced reporting by capturing tenant details such as Name, PAN, TAN, or Aadhaar

16. Updated Capital Gains Reporting Structure (ITR-2/ITR-3):

    As the Finance Act 2025 has introduced new tax rates on short term capital gains and long-term capital gains, old tax rates of 15% on STCG, 12.5%/20% on LTCG is removed in ITR-2/ITR-3 from AY 2026-27.

3. When to choose ITR-1

1. For Individuals being a resident (other than not ordinarily resident) having a total income up to Rs. 50 Lakh
2. Having Income from Salaries, two house properties (single or co-ownership), interest income, Family pension income etc.
3. Having long Term Capital Gains upto Rs 1,25,000 on Shares or Mutual Funds on which STT is paid.
4. Agricultural income up to Rs. 5000/-
5. Not a director in a company or has invested in unlisted equity shares or has any brought forward / carry forward loss under the head "from House Property".
6. Do not use this form if you have a sale of Cryptos / VDAs, Sale of property, debt mutual funds, unlisted shares or any other assets except shares or mutual funds on which STT is paid and long term capital gain is upto Rs 1.25 lakh.
7. Do not use this form even if you want to carry forward long-term capital loss on shares or mutual funds on which STT is paid
8. Do not use this form when you have income from foreign retirement benefits u/s 89A

4. When to choose ITR-2

For Individuals, HUF being a resident, RNOR or NRI

1. Having Income above Rs 50 lakhs
2. Having Multiple Properties (more than 2) including the properties outside India
3. Agriculture Income of more than Rs 5000
4. Being a Director in a company or has invested in unlisted equity shares or has any brought forward / carry forward loss under the head "Income from House Property", "Income from Capital Gains".
5. Have sold a property or shares or mutual funds.
6. Having foreign assets
7. Profit or loss derived from the sale of Cryptos / VDAs, excluding crypto derivatives (F&Os)
8. Gifts received in the form of VDAs / Cryptos needs to be reported under ITR2/3 (based on applicability)

5. When to choose ITR-3

For Individuals, HUF being a resident, RNOR or NRI having Salary, House property, other sources, foreign income, Capital Gain and Business or Professional Income

1. Having Income above Rs 50 lakhs
2. Having Multiple Properties (more than 2) including the properties outside India
3. Agriculture Income of more than Rs 5000
4. Being a Director in a company or has invested in unlisted equity shares or has any brought forward / carry forward loss under the head "Income from House Property", "Income from Capital Gains".
5. Have sold a property or shares or mutual funds
6. Having foreign Assets
7. Being a Partner in a Firm/LLP
8. Profit or loss derived from the sale of Cryptos / VDAs, including crypto derivatives (F&Os)
9. Gifts received in the form of VDAs / Cryptos needs to be reported under ITR2/3 (based on applicability)

6. When to choose ITR-4

1. For Individuals, HUFs and Firms (other than LLP) being a resident having total income up to Rs.50 Lakh
2. having two house properties (single /Co-ownership)
3. having income from business and profession which is computed under sections 44AD, 44ADA or 44AE or Interest Income, Family pension etc
4. Having long Term Capital Gains upto Rs 1,25,000 on Shares or Mutual Funds on which STT is paid.
5. Agricultural income up to Rs. 5000/-
6. Not a Director in a company or has invested in unlisted equity shares or has any brought forward / carry forward loss under the head "Income from House Property".
7. Do not use this form if you have a sale of Cryptos / VDAs, Sale of property, debt mutual funds, unlisted shares or any other assets except shares or mutual funds on which STT is paid and long term capital gain is upto Rs 1.25 lakh.
8. Do not use this form even if you want to carry forward long-term capital loss on shares or mutual funds on which STT is paid
9. Do not use this form when you have income from foreign retirement benefits u/s 89A