Income Tax Form: There is a major update for taxpayers. The Income Tax Department has introduced new ITR forms for the assessment year 2026-27, corresponding to the financial year 2025-26. This time, the government has tightened the rules regarding disclosures. Whether you are employed, involved in stock market trading, or managing a small business, the new forms come with several significant updates. It’s essential to familiarize yourself with these changes before completing the forms.

ITR-1 (Sahaj): A great relief for homeowners

The ITR-1 form is designed for individuals with an annual income of up to Rs 50 lakh. This time, there are some favorable updates. Taxpayers can now report income from two house properties directly on the ITR-1. Previously, the regulations surrounding this were quite stringent. Additionally, long-term capital gains (LTCG) up to Rs 1.25 lakh can now be reported using this form.

ITR-2: Increased scrutiny on foreign assets and cryptocurrency

The ITR-2 form is intended for those who do not derive their income from a business but earn from the stock market or other investments. More comprehensive details will now be required regarding foreign assets, foreign income, and cryptocurrency holdings. A notable relief is that there will no longer be a requirement to provide a separate breakdown of capital gains before and after July 23, 2024.

ITR-3 and ITR-4: Tighter regulations for traders and professionals

If you participate in intraday trading or F&O (futures and options), proceed with caution. ITR-3 now mandates that you provide detailed information about speculative income, F&O trades, and intraday transactions. The data you submit will be directly compared with AIS and GST turnover. If any discrepancies are identified in your information, you may receive a notice from the department.

ITR-4 (Sugam) Bank Balance Details: It is now compulsory for small business filers to disclose their bank balance details in specific situations.

Which ITR form is suitable for whom?

ITR-1- Residents with a salary of up to Rs 50 lakh, pension, and income from one or two houses.
ITR-2- Individuals with capital gains, foreign assets, or income exceeding Rs 50 lakh (without business income).
ITR-3- Stock market traders, professionals and business people.
ITR-4- Small traders and freelancers who opt for ‘presumptive taxation’ (44AD/44ADA).

No change in tax slabs

While the form formats and methods for requesting information have changed, the government has not made any changes to the income tax slab rates under the old and new regimes. These new changes are being implemented under the Income Tax Act, 2025, which aims to curb tax evasion and simplify compliance.

Important Deadline for Taxpayer

The window for filing income tax returns for AY 2026-27 has opened. The Central Board of Direct Taxes (CBDT) notified all forms from ITR-1 to ITR-7 on March 30, 2026, to give taxpayers ample time. Finance Minister Nirmala Sitharaman proposed different deadlines for different categories in Budget 2026. Under this, the deadline for individual taxpayers filing ITR-1 and ITR-2 is July 31, while non-audit businesses and trusts have been given time until August 31.

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