Income Tax Return (ITR) filing AY 2026-27: As the deadline for filing ITR draws closer, taxpayers are busy filing their tax returns or preparing to do so. While filing the return on time is important for every taxpayer, selecting the correct ITR form is equally crucial.
The applicable form depends on the nature of the taxpayer’s income – whether it is salary, capital gains, foreign assets, or other income. Selecting the wrong ITR form is one of the common mistakes taxpayers make in a last-minute rush. It can lead to delays in processing the return, a notice due to a defective ITR, or even the need to file a revised return.
ITR filing deadline near? Avoid these 5 ITR form selection mistakes for AY 2026-27
According to CA Chandni Anandan, Tax Expert at ClearTax, before you hit the submit button, make sure you avoid these five common mistakes taxpayers make while choosing an ITR form for AY 2026-27.
1. Choosing the wrong form for the income profile: Many taxpayers pick a form based on habit, not on the actual type of income earned. For example, salary plus capital gains, business income, or foreign assets may push a taxpayer into a different ITR form than the one used last year. Filing the wrong form can make the return defective and force a re-file later.
2. Ignoring business or professional income rules: Some taxpayers with business or freelance income mistakenly file a salaried form because the return looks simple. But once business or professional receipts are involved, the form choice changes, especially if the income is being offered under presumptive taxation or books-based taxation. This is one of the most common reasons for a form mismatch.
3. Missing capital gains or foreign income: A taxpayer may report salary correctly but forget that capital gains, foreign income, or foreign assets can change the eligibility of the form. Even small capital gain transactions can make a simple return form unsuitable. That leads to defect notices or the need to revise the return.
4. Not checking residential status properly: Some taxpayers wrongly assume they are still non-resident when their day count or overseas stay may make them resident or RNOR. Residential status affects which ITR form is valid and what income must be reported. A wrong status can lead to under-reporting or inadequate disclosures.
5. Using the wrong assessment year or outdated assumptions: AY 2026–27 must be selected for income earned in FY 2025–26, and taxpayers should not confuse it with later tax years. Some also rely on old filing rules and forget that form eligibility and disclosure rules change from year to year. That is why a form that worked previously may not be the most appropriate now.
Applicable ITR forms
ITR-1 (Sahaj): For resident individuals with income up to Rs 50 lakh from salary/pension, one house property and other sources (e.g. interest).
ITR-2 & ITR-3: For individuals and HUFs with capital gains and business income.
ITR-4 (Sugam): ITR-4 (Sugam) is meant for resident individuals, Hindu Undivided Families (HUFs), and partnership firms (excluding LLPs) whose total income does not exceed Rs 50 lakh in a financial year and who opt for the presumptive taxation scheme under Sections 44AD, 44ADA, or 44AE of the Income-tax Act.
ITR-5: The ITR-5 form is meant primarily for certain non-individual entities, namely Associations of Persons (AOPs), Firms, and Limited Liability Partnerships (LLPs).
ITR-6: Companies other than those claiming an exemption under section 11 may use this form.
ITR-7: ITR-7 is meant for persons, including companies, who are required to file their income tax return under Sections 139(4A), 139(4B), 139(4C), or 139(4D) of the Income-tax Act. These provisions generally apply to trusts, political parties, charitable and religious institutions, research associations, educational institutions, hospitals, and certain other specified entities. However, from AY 2022-23 onwards, ITR-7 is not applicable to entities whose income is unconditionally exempt from tax.
ITR-U: For updating returns within 48 months from the end of the relevant Assessment Year.
ITR-V: For verification of returns. After submitting your return, you have 30 days to e-verify or submit your ITR-V.
The due date for filing returns for non-audit cases remains July 31, 2026.
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Tax laws and regimes are subject to frequent changes by the government. Readers should verify details with official Income Tax Department notifications or consult a Chartered Accountant before making any financial decisions.
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