Today marks the beginning of the new financial year FY2026-27, which also means that the new Income-tax Act, 2025 has kicked in and replaced the decades-old Act rolled out in 1962. Meanwhile, the government has also notified all income tax return (ITR) forms for Assessment Year (AY) 2026-27, setting the stage for the upcoming filing season.
The Central Board of Direct Taxes (CBDT) has released ITR-1 to ITR-7, along with ITR-U and ITR-V, under the Income-tax Rules, 1962. These forms will be used to file returns for income earned in FY 2025-26.
Importantly, even though the new Income-tax Act, 2025 and revised rules will come into force from April 1, 2026, taxpayers will continue to file returns for this assessment year under the existing legal framework.
Who should file which form
The notified forms largely retain their structure, with applicability remaining consistent across categories.
ITR-1 (Sahaj): For resident individuals with income up to Rs 50 lakh from salary, house property and other sources, with limited capital gains
ITR-2 & ITR-3: For individuals and HUFs with higher complexity income, including capital gains and business income
ITR-4 (Sugam): For small businesses and professionals under presumptive taxation
ITR-5, 6, 7: For firms, companies and trusts
ITR-U: For updating returns within 48 months
ITR-V: For verification of returns
The due date for filing returns for non-audit cases remains July 31, 2026.
New disclosures may widen compliance net
While the structure of forms remains broadly similar, experts point to enhanced disclosure requirements that could significantly impact taxpayers.
Vivek Jalan, Partner at Tax Connect Advisory Services, said: “ITRs are not filed by many persons who are otherwise eligible to file them. For example, even incase the threshold limit of taxability i.e. Rs 4 lakh in the New Regime and Rs 2.5 lakh in the Old Regime is not crossed, then also a person has to file his ITR incase others have deducted a TDS of more than Rs 25,000/- PA on his PAN no as a deductee; Incase he has deposits > Rs 1 crore in current accounts, he has foreign travel expenditure > Rs 2 lakh, he has electricity consumption > Rs 1 lakh, etc.”
These conditions are not new, but the latest forms now require clearer and more detailed reporting where such triggers apply.
This means that even individuals who believe they fall below taxable limits — including salaried employees, pensioners and NRIs — may still need to file returns if they meet these reporting thresholds.
Focus on missed filers and NRIs
The updated disclosure framework appears aimed at plugging gaps in compliance.
As Jalan noted: “Many persons were missing filing the ITRs consequently and when the Income Tax Department received reports from others regarding the person, then these persons had to face penal action.”
He added that NRIs have also been among those missing filings, especially where such reporting conditions were triggered.
To address this, the revised forms — particularly ITR-2, ITR-3 and ITR-4 — now seek specific declarations in such cases, effectively acting as a checklist for taxpayers.
What taxpayers should watch out for
The changes signal a shift toward data-backed compliance, where third-party information (like TDS, high-value transactions, and spending patterns) is increasingly being matched with tax filings.
Jalan cautioned: “However, such persons are also advised that incase they fall under any of these criteria and are filing ITRs, then they must scrutinise their Accounts properly and ensure that they are not missing reporting of any income.”
In practical terms, this means taxpayers should carefully review bank transactions, TDS entries, foreign travel expenses and large expenditures before filing returns.
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.