Several changes have been made to the Income Tax Return (ITR) forms for the Assessment Year 2026-27. One of the key changes in the newly introduced ITR forms is the eligibility criteria for ITR-1.
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The Central Board of Direct Taxes (CBDT) has introduced several changes to the Income Tax Return (ITR) forms for the Assessment Year 2026-27, aimed at enhancing compliance and simplifying the filing process. The forms now mandate additional disclosure requirements regarding F&O trading and political donations, and taxpayers are required to disclose their investments.
One of the key changes introduced in the new ITR forms concerns the eligibility criteria for ITR-1. This form now accommodates taxpayers owning up to two house properties, providing relief to many salaried individuals who would otherwise have been required to file more complex forms.
Until now, taxpayers owning two house properties were required to file the more detailed ITR-2 form. The reporting requirements within the ‘Schedule House Property’ section of the new ITR-1 have also been expanded to include details such as the percentage of co-ownership and, in the case of rented properties, information regarding the tenants.
Simplified Process
The new ITR forms feature additional sections within the ‘Personal Information’ schedule to capture details regarding a secondary address. The ‘Capital Gains’ schedule has been simplified to accurately reflect the tax rates applicable to the relevant Assessment Year. Furthermore, a separate field has been added to the form specifically for the payment of fees in cases where there is a delay in filing a revised return.
Neeraj Agarwala, Senior Partner at Nangia & Co. LLP, notes that the new forms are clearly aligned with the principles of data triangulation, implying that algorithms can now more easily detect discrepancies. He states, “With greater granularity at the field level, mismatches can trigger scrutiny. Careful and accurate reporting significantly reduces the risk of receiving automated notices or having a defective return.”
Taxpayers filing ITR-4 under the Presumptive Taxation Scheme are now required to disclose their investment details. Professionals—such as lawyers, Chartered Accountants, and doctors—typically file ITR-4. This form is applicable to businesses with a turnover of up to ₹2 crore, as well as to professionals with gross receipts of up to ₹75 lakh.
Disclosure on F&O Trading
Taxpayers engaged in such trading—who typically file ITR-3—are required to separately disclose the turnover generated from F&O and intraday trades within “Part A-Trading Account,” utilizing the specified business code. Turnover is calculated as the aggregate of the total profits and losses realized from each individual trade; consequently, the reported figure may appear substantial even if the actual net income is significantly lower.
Sandeep Sehgal, Partner—Tax at AKM Global, states that F&O income is classified as non-speculative business income and is subject to taxation at applicable slab rates. He adds, “Traders are permitted to deduct eligible expenses—such as brokerage fees, internet charges, and advisory costs—while losses can be set off against income derived from any other head (excluding salary income). Furthermore, provided the tax return is filed within the stipulated deadline, such losses can be carried forward for up to eight subsequent assessment years.”
Donations to Political Parties
For political donations, taxpayers claiming deductions under Section 137 of the Income Tax Act, 2025 (formerly Section 80GGC of the previous Act) must now provide comprehensive details in their Income Tax Returns (ITR). This includes the name and PAN of the political party or electoral trust, the date of the donation, and the mode of payment. The updated form also mandates transaction-level details—such as the UPI reference number or bank transfer particulars (NEFT/RTGS/IMPS) along with the IFSC code—thereby establishing a clear audit trail for every contribution.
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