ITR Filing 2026: If you have submitted your income tax return, this information might be helpful for you. There are significant modifications for taxpayers filing their income tax returns (ITR) for the financial year 2025-26 (assessment year 2026-27). These modifications have been introduced in Forms ITR-1 (Sahaj), ITR-2, ITR-3, and ITR-4 (Sugam). Let’s delve into the details.
ITR-1 (Sahaj): Taxpayers are now allowed to declare income from up to two house properties using the same form. Previously, individuals with income from more than one house property had to file ITR-2. Those earning long-term capital gains (LTCG) from listed equity shares or equity-oriented mutual funds covered under Section 112A can now disclose these gains in ITR-1, as long as the gain does not exceed Rs 1.25 lakh during the financial year.
Taxpayers with long-term capital gains (LTCG) from listed equity shares or equity-oriented mutual funds covered under Section 112A can now report these gains in ITR-1, provided the gain does not exceed Rs 1.25 lakh during the financial year. It will also be possible to provide optional address, mobile number, and email ID. Taxpayers receiving pension income from abroad are no longer required to disclose their foreign pension accounts in ITR-1.
ITR-2 This form requires more detailed information on capital gains. Depending on the type of asset, additional details may be necessary, such as purchase date, transfer date, sale proceeds, purchase cost, and relevant tax regulations. A new section has been included in the form to report losses incurred from share buyback transactions.
Previously, proceeds from share buybacks received by shareholders were considered as ‘deemed dividend income’ and taxed according to the individual’s income tax slab rate. However, starting from April 1, 2026, proceeds from share buybacks will be taxed under capital gains regulations instead of ‘deemed dividend’. Resident taxpayers with foreign assets, foreign bank accounts, foreign shares, financial interests abroad, or foreign income must continue to provide these details in their returns. Like ITR-1, taxpayers filing ITR-2 can now include additional address, mobile number, and email address.
Stricter regulations have been implemented for businesses and traders filing ITR-3. Income from futures and options (F&O), intraday trading, commodity trading, and currency trading must now be disclosed separately. Additional details regarding significant financial transactions and business activities will also be required.
The most notable change in ITR-4 (Sugam) is the obligatory disclosure of bank account balances as of March 31, 2026. Income from two houses and LTCG up to Rs 1.25 lakh can also be reported using this form.