The Income Tax Department has introduced several changes to the Income tax return (ITR) forms for assessment year 2026-27 (financial year 2025-26), impacting salaried individuals, traders, and investors alike. The updated forms aim to improve disclosure standards, enhance transparency, and simplify the tax filing process for different types of taxpayers.
The Central Board of Direct Taxes () notified the Income-Tax Rules, 2026, on March 20, 2026, as part of the implementation of the Income Tax Act, 2025. According to a gazette notification, “These rules may be called the Income-tax Rules, 2026. They shall come into force on April 1, 2026.”
While the updated framework simplified several provisions under the income tax law, it did not introduce any changes to the existing income tax slab rates under either of the tax regime.
What changed in ITR forms?
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What are the key changes in ITR forms for FY26 regarding capital gains and trading?⌵
For FY26, ITR forms include new disclosure requirements for long-term capital gains (LTCG), buyback losses, and Futures & Options (F&O) transactions. ITR-1 now allows reporting LTCG up to ₹1.25 lakh, and ITR-3 requires more detailed reporting for F&O, intra-day trading, and buyback-related capital loss disclosures.
Which ITR form should I file if I am a salaried individual with rental income and capital gains?⌵
If you are a salaried individual with income up to ₹50 lakh from salary, pension, house property, interest, and capital gains within prescribed limits, you should file ITR-1 (Sahaj). ITR-1 now allows disclosing income from up to two house properties.
What new disclosure requirements are there for traders and business owners in ITR-3 for FY26?⌵
ITR-3 for FY26 introduces more detailed reporting for F&O, intra-day trading, speculative income/losses, and buyback-related capital loss disclosures. It also expects enhanced reconciliation between books of account, GST turnover, AIS/TIS, and TDS data.
How do the new ITR disclosure norms for FY26 impact foreign assets and high-value transactions?⌵
The revised ITR-2 form includes enhanced disclosure requirements for foreign assets, overseas income, high-value transactions, and crypto/virtual digital asset transactions. A new secondary address/contact details field has also been added across forms for better communication tracking.
What are the deadlines for filing ITR for FY26?⌵
For FY26, the deadline for individual taxpayers filing ITR is July 31, 2026. For those using ITR forms 3 and 4, the deadline is August 31, 2026. A delayed return can be filed until December 31, 2026.
The revised ITR-1, ITR-2, ITR-3 and ITR-4 forms now include additional disclosure requirements related to long-term capital gains (), buyback losses, Futures & Options (F&O) transactions, foreign assets and high-value financial activities, according to Nishant Shanker, a tax strategy expert and former senior manager of tax at EY.
These updated forms will be used by taxpayers while filing returns for income earned between April 1, 2025 and March 31, 2026. Here are the changes outlined by Shanker:
Changes in ITR-1 (Sahaj)
- Taxpayers can now disclose income from up to two house properties in ITR-1. Earlier, the form had stricter limitations on reporting such income.
- The updated form now allows reporting of long-term capital gains under Section 112A up to ₹1.25 lakh.
- Earlier, LTCG was taxed at two different rates — 10% and 12.5%. In Budget 2024-25, the rates for LTCG on all assets were standardised at 12.5% without indexation, and 20% with indexation.
Changes in ITR-2
- The earlier requirement to separately disclose capital gains arising before and after 23 July 2024 has been removed.
- Additional disclosure requirements have been introduced in certain deductions schedules, including more granular details for donation-related claims.
- Enhanced disclosure requirements continue for foreign, assets overseas income, high-value transactions, and crypto/virtual digital asset transactions.
- A new secondary address/contact details field has been added across forms for better communication tracking.
Changes in ITR-3
- More detailed reporting has been introduced for F&O, intra-day trading, speculative income/losses and buyback-related capital loss disclosures.
- Enhanced reconciliation requirements are expected between books of account, GST turnover, AIS/TIS and TDS data.
- Additional reporting fields have been rationalised for business/professional taxpayers, especially around audit and balance sheet disclosures.
- Secondary address/contact fields have also been added here.
Changes in ITR-4 (Sugam)
- One significant change is increased reporting around banking information, including mandatory disclosure of bank balances in certain cases.
- Taxpayers claiming certain deductions now need mandatory linkage with prescribed forms like Form 10BA before filing the return.
- TDS reporting has become more granular, requiring taxpayers to specify the relevant section under which tax was deducted.
- Presumptive taxation reporting continues, but the forms indicate a stronger move toward cross validation with AIS/SFT data and banking disclosures.
Who should file these revised forms?
Here’s a list of different ITR forms and who should file what:
— ITR-1 (Sahaj) should be filed by resident individuals earning up to ₹50 lakh from salary, pension, house property income, and capital gains within prescribed limits.
— ITR-2 applies to individuals and Hindu Undivided Families (HUFs) without business income but having capital gains, foreign assets or multiple income sources.
— ITR-3 is meant for business owners, professionals and traders earning business or professional income outside presumptive taxation schemes.
— ITR-4 (Sugam) should be filed by small businesses, freelancers and professionals who are opting for presumptive taxation under Sections 44AD, 44ADA and 44AE.