ITR Filing AY 2026-27: Key Changes Every Taxpayer Must Know Before Filing Returns:

ITR Filing AY 2026-27: Key Changes Every Taxpayer Must Know Before Filing Returns The Income Tax Department has begun online filing and Excel utilities for ITR-1, ITR-2, and ITR-4 for AY 2026-27 on the e-filing portal. As the utilities go live, taxpayers can now start submitting their income tax returns for FY 2025-26. Although this year’s tax filing season may look similar to previous years, there are multiple updates in ITR forms and reporting rules, which means taxpayers will need to review details carefully before submitting returns. Here are the key changes introduced this year:

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Reporting of Unrealised Rent

This is specifically meant for landlords collecting rent. A new disclosure requirement has been introduced for landlords in AY 2026-27. ITR-1 and ITR-4 now include a separate field for reporting “amount of rent which cannot be realised".

Easier Reporting for Two House Properties

Taxpayers owning two residential properties have received a major relaxation this year. Due to the updated ITR forms, income from up to two house properties can now be reported in the same simplified return forms. This change will benefit many salaried taxpayers who previously had to shift to more complex ITR forms due to ownership of a second house property.

Old Capital Gains Reporting Fields Removed

In AY 2025-26, taxpayers had to separately disclose capital gains earned before and after July 23, 2024, due to changes announced in the budget. Different tax rates for short-term and long-term capital gains during separate periods had made return filing more complicated. However, the earlier tax rates on listed equity shares - 15% for STCG and 10% for LTCG - are no longer applicable for FY 2025-26.

Reporting bank balance

For AY 2026-27, taxpayers filing ITR-4 will now have to mandatorily report details of their bank balances and investments while filing income tax returns.

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Section 89A relief

Section 89A provides relief to Indian residents from double taxation on income earned through foreign retirement accounts. For AY 2026-27, the option to claim this relief has been removed from ITR-1 and ITR-4. Taxpayers seeking benefits under Section 89A will now need to file ITR-2 or ITR-3 instead, helping simplify the ITR-1 and ITR-4 forms.

More detail is required for claiming deductions for donations

Taxpayers claiming deductions under Section 80G may now need to provide additional details while filing returns. For general donations under Section 80G, new disclosures include:

• IFSC code of the bank
• Transaction reference number

For donations made to political parties, taxpayers may also need to report:

• PAN of the political party
• Name of the political party

ITR filing by representative assessee

All ITR forms for AY 2026-27 now contain a separate field to indicate whether the return is being filed by a representative assessee.