Major ITR Form Changes for AY 2026-27: What Every Taxpayer Must Know

The Income Tax Department released new ITR forms for Assessment Year 2026-27 (FY 2025-26) on 31st March 2026. These updates affect ITR-1, ITR-2, ITR-3, and ITR-4 — touching everything from contact details and house property limits to F&O disclosure, balance sheet reporting, and a new late fee provision under Section 234-I. Here is a complete breakdown of every key change, the reason behind it, and how it compares to the earlier position.

Quick Summary: All Changes at a Glance

Form	What Changed	Earlier	Now
ITR-1	Secondary mobile number & email	Only 1 contact	Primary + secondary both allowed
All Forms	Secondary address reporting	Only 1 address	Primary + secondary address
ITR-1 & ITR-4	House property income	Only 1 property	Up to 2 properties
ITR-3	F&O trading turnover & income	No dedicated column	Specific columns added
ITR-4	Bank balance & investments as on 31 Mar	Not required	Now mandatory
All Forms	Section 234-I fee on revised returns filed after 31 Dec 2026	No such provision	Fee now applicable

1 Secondary Contact Details — Now Captured in ITR Forms

What Changed?

From AY 2026-27, ITR-1 now allows taxpayers to provide both a primary and secondary mobile number and email address. In ITR-2, ITR-3, and ITR-4, taxpayers can now furnish both a primary and secondary address. Earlier, each form captured only a single contact point or address.

Why This Change?

The Income Tax Department wants to ensure that critical communications — including scrutiny notices, demand notices, and refund intimations — are never missed. As India moves toward a faceless and fully digital assessment ecosystem, a backup contact reduces the risk of failed departmental communications. If the primary email or phone is outdated or inactive, the department can reach the taxpayer through the alternate details.

Earlier (up to AY 2025-26)

ITR-1 captured only one mobile number and one email address. All ITR forms allowed only a single address. If these details were outdated, taxpayers risked missing notices and facing ex-parte assessments.

Now (AY 2026-27)

ITR-1 allows both a primary and secondary mobile number and email. ITR-1/2/3/4 all now permit a secondary address in addition to the primary one — strengthening departmental communication.

What You Should Do

Keep a secondary email and an alternate phone number ready when filing. Ensure both are active and monitored regularly so that no departmental communication goes unnoticed.

2 ITR-1 & ITR-4 Now Allow Up to Two House Properties

What Changed?

Both ITR-1 (Sahaj) and ITR-4 (Sugam) now permit taxpayers to report income from up to two house properties, including interest deductions on home loans for both. Additionally, ITR-1 can now be used even in cases of co-ownership of property, and a new mandatory field captures the amount of unrealised rent.

Why This Change?

With affordable housing loans now commonplace, many middle-class salaried taxpayers and small business owners under presumptive taxation own two properties. Forcing this large segment onto the more complex ITR-2 was creating unnecessary compliance burden and increasing filing errors. The amendment simplifies the process significantly for these taxpayers.

Earlier (up to AY 2025-26)

ITR-1 and ITR-4 permitted only one house property. Any taxpayer with a second property — even if self-occupied or vacant — was required to switch to ITR-2.

Now (AY 2026-27)

Up to two house properties can be reported in ITR-1 and ITR-4. Co-ownership is now also permitted in ITR-1. A new field captures unrealised rent for let-out properties.

Who Benefits?

Taxpayer Profile	Form Required Earlier	Form Now Available
Salaried: 1 self-occupied + 1 let-out property	ITR-2	ITR-1
Salaried: 2 self-occupied properties	ITR-2	ITR-1
Presumptive taxpayer: up to 2 properties	ITR-2	ITR-4
Salaried: 3 or more properties	ITR-2	ITR-2 (no change)

ITR-1 remains available only to resident individuals with total income up to ₹50 lakhs, no income from business or profession, and — as of AY 2026-27 — LTCG under Section 112A up to ₹1.25 lakh with no carried-forward losses is now also permitted in ITR-1.

3 ITR-3: Dedicated Columns for F&O Trading Income

What Changed?

ITR-3 now has specific, dedicated columns to separately report F&O (Futures & Options) trading turnover and the income or profit from such trading credited to the Profit & Loss

account. Intraday trading is also separately reportable under this enhanced framework.

Why This Change?

F&O participation among retail investors in India has risen sharply over recent years. Since F&O income is classified as business income — not capital gains — many taxpayers were misreporting it by clubbing it with other business income, filing under the wrong form, or not reporting it at all. The absence of a dedicated column made it difficult for the department to cross-verify figures against exchange-reported data in Form 26AS and the Annual Information Statement (AIS). The new columns address this gap directly, improving tracking and reducing misreporting amid surging derivatives activity.

Earlier (up to AY 2025-26)

No dedicated F&O column existed in ITR-3. Traders reported figures under general business income fields without standardised disclosure, leading to widespread inconsistency and frequent notices from the department.

Now (AY 2026-27)

Separate, specific columns for F&O turnover and F&O P&L income are now part of ITR-3. Intraday trading is also separately disclosable, enabling cleaner cross-verification with exchange and AIS data.

What F&O Traders Must Do

• Obtain a complete trade-wise P&L statement from your broker for FY 2025-26.

• Compute aggregate turnover correctly — as the absolute sum of profit and loss on each trade, per ICAI guidance.

• Verify whether a tax audit under Section 44AB is triggered based on your turnover and profit/loss position.

• Ensure all figures match your AIS and Form 26AS before submitting the return.

4 ITR-4: Bank Balance & Investments Now Mandatory

What Changed?

Taxpayers filing ITR-4 (Sugam) under presumptive taxation (Sections 44AD, 44ADA, or 44AE) must now mandatorily disclose their bank balances and the value of investments held as on 31st March 2026, in addition to the items already required in the balance sheet section.

Why This Change?

Under the presumptive taxation scheme, taxpayers declare a fixed percentage of turnover as income without maintaining detailed books of accounts. While this eases compliance, it limited the department's visibility into the actual financial position of these taxpayers. By requiring bank balance and investment disclosures as of the year-end date, the department can now cross-verify reported income against data received from banks under the Statement of Financial Transactions (SFT), and identify cases of unexplained wealth accumulation inconsistent with declared income.

Earlier (up to AY 2025-26) — Mandatory items

Sundry creditors, inventories, sundry debtors, and cash in hand were the only required disclosures in the ITR-4 balance sheet section.

Now (AY 2026-27) — Additional mandatory disclosures

Bank balances across all accounts and investments held as on 31st March 2026 are now also compulsory — covering mutual funds, shares, fixed deposits, PPF, NSC, and other instruments.

Item	Mandatory Earlier?	Mandatory Now?
Sundry Creditors	Yes	Yes
Inventories / Stock	Yes	Yes
Sundry Debtors	Yes	Yes
Cash in Hand	Yes	Yes
Bank Balance (all accounts)	No	Yes — New
Investments as on 31 Mar 2026	No	Yes — New

5 Section 234-I: Fee on Revised Returns Filed After 31st December 2026

What Changed?

The Finance Act 2026 has made two linked changes to revised returns. First, the time limit to file a revised return has been extended from 9 months to 12 months from the end of the relevant financial year — meaning revised returns for AY 2026-27 can now be filed up to 31st March 2027. Second, a new fee under Section 234-I is payable if the revised return is filed after 31st December 2026 (i.e., during the extended window of January to March 2027). ITR forms for AY 2026-27 now include a separate field to disclose and compute this fee.

Why This Change?

Earlier, the deadline for both belated returns and revised returns was the same — 31st December of the assessment year. This left taxpayers who filed a belated return close to the deadline with virtually no time to then file a revised return if an error was discovered. By extending the revision window to 31st March 2027 while attaching a fee to the extended period, the government balances taxpayer convenience with a deterrent against casual or delayed revision. Taxpayers who file their original return on time and revise before 31st December 2026 face no fee at all.

Earlier (up to AY 2025-26)

Revised returns could be filed up to 31st December of the assessment year — the same deadline as belated returns. No separate fee applied. The revision window was effectively 9 months from the end of the financial year.

Now (AY 2026-27 onwards)

Revised returns can now be filed up to 31st March 2027 — a full 12 months from the end of FY 2025-26. If filed after 31st December 2026, a fee under Section 234-I becomes payable. No fee applies if revised on or before 31st December 2026.

Key Takeaway

• Revise your return before 31st December 2026 to avoid any Section 234-I fee.

• If you need the extended window (January to March 2027), you can still revise — but a fee will apply.

• This change is most beneficial for taxpayers who filed a belated return close to December and then discovered an error — they now have additional time to correct it.

Frequently Asked Questions

Q1. I am salaried with two home loans. Can I now file ITR-1?

Yes — provided your total income does not exceed ₹50 lakhs, you have no business or profession income, and your capital gains (if any) are only LTCG under Section 112A up to ₹1.25 lakh with no carried-forward losses. ITR-1 now supports up to two house properties for AY 2026-27.

Q2. I trade in F&O as a side activity. Which ITR should I file?

F&O income is always classified as business income regardless of whether it is a primary or secondary activity. You must file ITR-3, using the new dedicated F&O columns to report your turnover and profit or loss accurately.

Q3. I file under Section 44AD. Do I need to report my investments?

Yes. For AY 2026-27, all ITR-4 filers must mandatorily disclose bank balances across all accounts and the value of investments held as on 31st March 2026 — in addition to the items already required such as sundry debtors, creditors, stock, and cash.

Q4. If I file a revised return in November 2026, will Section 234-I apply?

No. Section 234-I applies only if the revised return is filed after 31st December 2026. Revising on or before 31st December 2026 attracts no fee under this section.

Q5. What is the fee amount under Section 234-I for filing a revised return after 31st December 2026?

The Finance Act 2026 has introduced Section 234-I and the ITR forms include a dedicated field for this fee. The exact fee quantum and slab structure are to be officially notified by CBDT. Stay updated at taxharbour.in for the latest notification details, or reach out to our tax experts directly.