The deadline to file income tax return for financial year 2025-26 (AY 2026-27) is 31 July 2026 for salaried taxpayers not required to undergo audit. According to reports from Mint, first-time taxpayers must ensure proper documentation and cross-verification to avoid delays and penalties. The income tax department may treat returns as defective under Section 139(9) if incorrect forms are filed, requiring correction within specified timeframes. This year marks the final return filing cycle under the old Income Tax Act, 1961, even though the new Income Tax Act, 2025 has already been introduced, making careful attention to filing requirements essential.
First-time taxpayers must maintain accurate income records including bank interest, capital gains, freelance income, and foreign assets. As reported by Mint, verification of Form 16, AIS, and Form 26AS documents is essential for cross-checking salary income, TDS deductions, and other reported income details. Any mismatches between these records and ITR filing can lead to delayed refunds or tax notices from the income tax department. Additionally, taxpayers should keep investment proofs and deduction documents ready for claiming exemptions under Sections 80C, 80D, HRA, education loan interest, and other applicable sections. This year, taxpayers with multiple income streams may need to carefully assess which form applies to them, as filing the wrong form could lead to defective return notices, delayed refunds, incorrect tax calculations or loss of certain tax benefits.
A major relief this year is for taxpayers who own more than one house property. Earlier, salaried individuals filing ITR-1 (Sahaj) and small business taxpayers using ITR-4 (Sugam) had limited reporting flexibility. Now, taxpayers can disclose income from up to two residential properties while using these forms, allowing individuals earning salary income and also owning two houses to continue using simpler ITR forms instead of shifting to more complex ones. This enhancement provides greater flexibility for taxpayers with multiple property investments while maintaining the simplicity of the existing forms. For AY 2026-27, taxpayers can report income from up to two house properties in ITR-1, rather than just one house property, with the new schedule Section 24(b) added for interest on borrowed capital details.
If capital gains reporting confused you last year, things may become simpler now. In AY 2025-26, taxpayers had to separately report gains depending on whether transactions happened before or after July 23, 2024, due to changes announced in the Budget. Different tax rates applied to short-term and long-term gains during different periods. For AY 2026-27, those older reporting fields have been removed. Since FY 2025-26 follows a single capital gains tax structure, taxpayers will no longer have to split transactions based on dates in the same way, making capital gains reporting less complicated this year.
The Income Tax Department has added a separate field called "The amount of rent which cannot be realised" in ITR forms, including ITR-1 and ITR-4. Previously, taxpayers filing these forms did not have a separate place to report unrealised rent. The addition aims to make rental income disclosures more detailed and transparent. For taxpayers filing ITR-4 under presumptive taxation schemes, an extra disclosure has become compulsory. Individuals covered under Sections 44AD, 44ADA and 44AE will now have to report the total closing balance of all active bank accounts as of March 31, 2026, which needs to be disclosed in field E21 of ITR-4. Tax experts warn that incorrect reporting or failure to disclose balances could invite tax notices or penalties. Additionally, foreign asset reporting requirements for retirement benefits have been removed from ITR-1 forms.
