The Income Tax Department has completely overhauled the ITR utility and schema for Assessment Year 2026-27, introducing a significant change to how taxpayers disclose certain non-taxable receipts. According to Mint reports, the earlier 'Other Exempt Income' field in Schedule EI has been removed entirely, replaced by a more specific reporting option titled 'Receipts not in the nature of income.' This change is expected to bring greater clarity in reporting transactions that are not taxable because they do not qualify as income under the Income Tax Act, 1961. The update provides taxpayers with a dedicated place to disclose receipts that fall outside the scope of taxable income, rather than reporting them under a generic exempt income category. As reported by Mint, this new section is not going to create any additional liability for taxpayers. It simply provides a separate section to report amounts that are not treated as income under the Income Tax Act. The broader goal is to make ITR more simplified and less confusing for taxpayers.
Taxpayers filing their income tax return (ITR) for AY 2026-27 will notice a new reporting field in the online filing portal and JSON utilities titled 'Receipts not in the nature of income.' According to Mint reports, this addition is intended to improve the way certain non-taxable receipts are disclosed in the return. The new field does not make these receipts taxable or introduce any additional tax liability, but provides a separate reporting category for amounts that are not considered 'income' under the Income-tax Act. As reported by Mint, the change is expected to bring greater clarity in reporting transactions that are not taxable because they do not qualify as income under the Income Tax Act, 1961. Business Standard reports that the updated ITR utility now includes a small but potentially important change with a new residual 'Other Income' field under Schedule EI (Exempt Income), giving taxpayers a way to voluntarily disclose exempt receipts that do not fit into any of the specified categories. Earlier reports indicated that this new field was not included in the officially notified ITR forms or the PDF versions on the income tax portal, but has been added only to the online filing portal.
The new field captures receipts that are not regarded as income but are received during the financial year and could otherwise be construed as income. As reported by Mint, taxpayers can disclose the following receipts under the new head: loans received, amounts received in any inheritance, and amounts received on sale of any personal assets. Some common examples include gifts received from specified relatives, which are exempt under the Income Tax Act, and sale proceeds from rural agricultural land, as such land is not treated as a capital asset. This means that its sale does not attract capital gains tax. Ankit Jain, Partner at Ved Jain and Associates, noted that disclosing such receipts can help taxpayers explain the nature of these funds if questioned by the tax authorities. Business Standard reports that receipts which are not income — such as gifts, loans or substantial redemption proceeds from investments — can be disclosed under the relevant field so that the return presents a more complete picture.
The introduction of this field does not, by itself, create a new statutory obligation to disclose these receipts, according to Ritika Nayyar, Partner at Singhania & Co. As reported by Mint, gifts received from specified relatives continue to remain outside the scope of taxation, and gifts received on the occasion of an individual's marriage continue to enjoy the same exclusion. Similarly, consideration received on transfer of rural agricultural land remains outside the capital gains provisions because such land is not regarded as a capital asset under the Income-tax Act. However, voluntary disclosure in the ITR often helped explain the source of funds and reduced the possibility of unnecessary tax notices or queries. Chartered Accountant Akhil Pachori noted that the new 'Receipts not in the nature of income' category provides a structured mechanism to report receipts that are not income in the first place. Business Standard reports that while reporting these receipts is not legally mandatory, experts say the new disclosure option can help taxpayers avoid scrutiny from the Income Tax Department, particularly when the transactions are already visible through its data systems.
