The Income Tax Department has notified all the Income Tax Return (ITR) forms for the assessment year 2026-27. With this, the process of filing returns for the income of financial year 2025-26 has started. The Income Tax Department on Tuesday also notified ITR-U form for filing updated returns along with ITR-2, 3, 5, 6 and 7. Before this, ITR-1 and ITR-4 forms were notified on March 30.
These forms are used by small and medium taxpayers. The last date for filing returns for individual taxpayers and taxpayers for whom audit of accounts is not required has been fixed as July 31.
Who should fill which form?
ITR-1 (Sahaj) and ITR-4 (Sugam) are relatively simple forms, meant for a large number of small and medium taxpayers. Sahaj form can be filled by resident individuals whose annual income is up to Rs 50 lakh and whose income is from salary, a house, other sources (interest) and agricultural income up to Rs 5,000. At the same time, Sugam form is for such individuals, Hindu Undivided Families (HUF) and firms (except LLP) whose total annual income is up to Rs 50 lakh and whose income is from business or profession.
ITR-2 form is for individuals and HUFs who do not have income from business or profession but have income from capital gains. Whereas, ITR-3 form is for such individuals and HUFs whose income comes from owned business or profession. ITR-5 form is filed by firms, limited liability partnerships (LLP) and co-operative societies, while ITR-6 form is for companies registered under the Companies Act. Apart from this, ITR-7 form is prescribed for trusts and charitable institutions.
New disclosures may increase the scope of compliance?
Although the structure of the form remains largely the same, experts are pointing to increased reporting requirements that could have a significant impact on taxpayers. Vivek Jalan, partner, Tax Connect Advisory Services, said in the FE report that many people do not file ITR, even though they are eligible to do so. For example, even if the threshold limit is not crossed – i.e. Rs 4 lakh in the new system and Rs 2.5 lakh in the old system – a person will still have to file his ITR if someone else (as a deductee) has deducted TDS of more than Rs 25,000 on his PAN number; Or if he has more than Rs 1 crore deposited in his current accounts, more than Rs 2 lakh has been spent on foreign travel, electricity bill has been more than Rs 1 lakh, etc.
These conditions are not new, but now it has become necessary to give more clear and detailed information in such situations in the new form. This means that even those people – including salaried employees, pensioners and NRIs – who believe that they fall below the tax paying threshold, may also have to file a return, if they satisfy these reporting conditions.
Special attention on those who do not file returns and NRIs
This new framework for providing information appears to be designed to address gaps in compliance. As Jalan reported, many people forgot to file ITR, and when the Income Tax Department got information about that person from someone else, they had to face punitive action. He further said that NRIs have also been among those who forget to file returns – especially in cases where these reporting requirements apply. To address this problem, the changed forms – notably ITR-2, ITR-3 and ITR-4 – now ask for specific declarations in such cases, which acts as a checklist for taxpayers.