ITR Forms Have Changed This Year: What Taxpayers Should Check Before Filing

Taxpayers filing their income tax returns for FY 2025-26, or Assessment Year 2026-27, will need to be more careful when choosing the appropriate income tax return (ITR) form and filling in the details. This year's income tax return forms seek more disclosures in areas such as capital gains, trading income, bank accounts, house property income, and tax deduction claims.

The changes are important because the Income Tax Department now relies heavily on information already available through the Annual Information Statement (AIS), Form 26AS, Taxpayer Information Summary (TIS), Tax Deducted at Source (TDS) records, bank reports, employer data, brokerage statements, and other third-party sources. Any mismatch between the return and the department’s records can lead to queries later.

For taxpayers, this means return filing can no longer be treated as a routine year-end exercise. Before pressing the submit button, they must check whether the income reported, deductions claimed, tax credits shown, and investment details entered in the return match the information available with the department.

ITR-1 And ITR-4 Get More Scope

One of the key changes this year is that taxpayers using ITR-1 can now report income from up to two house properties. Earlier, those with more than one house property generally had to move to ITR-2. This will make filing simpler for eligible salaried taxpayers and pensioners who have limited income sources but own two properties, according to a recent report by Moneycontrol.

Another important change is related to long-term capital gains under Section 112A. Taxpayers with long-term capital gains from listed equity shares or equity-oriented mutual funds can now use ITR-1 if such gains do not exceed Rs 1.25 lakh during the financial year. This is useful for small investors who may have modest gains from mutual funds or listed shares.

Similar changes have also been made in ITR-4, which is used by taxpayers opting for presumptive taxation under Sections 44AD, 44ADA, or 44AE. Such taxpayers can now report income from up to two house properties and long-term capital gains under Section 112A up to Rs 1.25 lakh, subject to eligibility.

However, taxpayers should not choose ITR-1 or ITR-4 only because these forms look simpler. If they have foreign assets, unlisted shares, business income outside the permitted category, higher capital gains, or other complex income, they may still need to use another form.

More Disclosures For Capital Gains And Trading Income

ITR-2 has become more detailed for taxpayers with capital gains. Filers may now have to provide transaction-level information, including the date of acquisition, date of transfer, sale value, cost of acquisition, and the nature of the asset. This is especially relevant for those who sold shares, mutual fund units, property, or other capital assets during the year.

There is also a separate field for reporting losses from share buyback transactions. This becomes important because the tax treatment of buyback proceeds has changed, and taxpayers must ensure that such transactions are correctly reported.

ITR-3 has also seen changes. Taxpayers involved in futures and options, intraday equity trading, commodity trading, or currency trading will now have to report these activities separately. This is important because many taxpayers treat trading gains casually, while the tax department may view them differently depending on the nature and frequency of transactions.

Bank Balance And Donation Details Need Attention

For ITR-4 filers, a major new requirement is the disclosure of bank account balance as on March 31, 2026. Taxpayers should therefore keep their bank statements ready before filing the return.

There are also more details required in relation to certain deduction claims. For instance, where a taxpayer has claimed a deduction for donations made to political parties, additional information, such as the PAN of the political party, may be required. This is significant because the tax department has been examining such claims more closely in recent years, especially where the registration status of the recipient entity is in question.

Taxpayers must also ensure that all bank accounts are correctly reported. Refunds, if any, are credited only to a valid and pre-validated bank account. A wrong or inactive account can delay the refund process.

Check Deadline, Form, And Data Before Filing

The filing deadline depends on the taxpayer category. For most salaried taxpayers, the due date continues to be July 31. However, the deadline for certain non-audit business cases and trusts has been extended to August 31. For example, taxpayers with futures and options income, which is generally treated as business income, may get time until August 31, depending on the facts of the case.

Before filing, taxpayers should download and check their Annual Information Statement, Form 26AS, and Taxpayer Information Summary. Salary, interest income, dividend income, capital gains, TDS, TCS, and high-value transactions should be matched carefully.

The biggest mistake taxpayers can make is assuming that an item not entered on the return will go unnoticed. Banks, mutual funds, employers, brokers, and other reporting entities already share data with the tax department. A careful review before submission can help avoid unnecessary notices, refund delays, or scrutiny later.

FAQs

1. Why should taxpayers be more careful while filing ITR this year?

ITR forms now ask for more details on capital gains, trading income, bank accounts, house property income, and deduction claims. Any mismatch with AIS, Form 26AS, or TIS can lead to queries.

2. Can taxpayers with two house properties file ITR-1 or ITR-4?

Eligible taxpayers can now report income from up to two house properties in ITR-1 or ITR-4, subject to other conditions being met.

3. What should taxpayers check before submitting their ITR?

They should match salary, interest, dividend, capital gains, TDS, TCS, and high-value transactions with AIS, Form 26AS, and TIS before filing.