Kolkata: The Income Tax Department has come out with Income Tax Return, or ITR forms, for Assessment Year 2026–27. There are also updates to the compliance mechanism and verification rules. Even before they were unveiled, the government was indicating that the focus from now on will be strict compliance and data matching.
Himadri Mukhopadhyay, secretary Income Tax Bar Association, Calcutta and a prominent income tax practitioner points out that one cannot just choose a form randomly and fill it up. The choice of the appropriate ITR form depends on the types of income that the taxpayer has earned in the pertinent year. Mukhopadhyay also flags an existing adage — Choose between forms ITR-1 and ITR-2 if there are no income from business while ITR-3 or ITR-4 will be applicable for those with professional or business income.
Types of income and ITR forms
ITR-1: It is usually for individuals earning a salary from a job
ITR-2: Applicable for investors with multiple properties or capital gains
ITR-3: Freelancers and professionals
ITR-4: Small businesses who can come under presumptive taxation
ITR-U
ITR-U is voluntary compliance tool the coverage of which has been extended from two years to four years. It has been designed to update or rectify previous returns and allows one to modify original, revised and belated returns. However, it comes with a provision to pay though. The taxpayer has to pay 25% additional tax if he/she files within 12 months, 50% if the delay is between 12 months and 24 and up to 70% for delays beyond two years.
Changes this year
The Income Tax authorities have decided to opt for tighter reporting and will also go for data matching as in the case of house rent allowance deductions. If the rent is more than Rs 1 lakh a year, the taxpayer has to file details (like PAN) of the landlord, which gives the IT department the option of easily matching the rent claimed to be paid and the amount received by the landlord.
The changes that have kicked in from the FY27, includes the feature that those who are opting for ITR-1 and ITR-4 can cite two houses which are owned by them in the form. The deadline for revised ITR has been extended till March 31, which means a three-month addition to the earlier deadline. There will be focus on pre-filled data and AIS. From this year, ITR filing will feature simpler forms but compliance will be tighter with more efficient monitoring of PAN, TDS and transactions.