Income Tax Department Opens ITR-1 & ITR-4 Filing for AY 2026–27

Excel Utility & Online Filing Facility Now Available

The Income Tax Department has officially activated ITR-1 (Sahaj) and ITR-4 (Sugam) for Assessment Year 2026–27 on the Income Tax e-Filing Portal. Eligible taxpayers can now begin filing their Income Tax Returns through both:

  • Online Filing Mode
  • Excel Utility (Offline Mode)

available on the official Income Tax e-Filing Portal.

Major Relief for Salaried Individuals and Small Taxpayers

This update brings significant convenience for:

  • Salaried individuals
  • Pensioners
  • Freelancers
  • Small business proprietors
  • Professionals opting for presumptive taxation
  • Taxpayers filing simple income tax returns

Taxpayers can now prepare and submit returns in advance, helping them avoid last-minute technical issues and portal congestion.

ITR Forms Currently Enabled

1. ITR-1 (Sahaj)

ITR-1 is meant for resident individuals having:

  • Salary or pension income
  • Income from up to two house properties
  • Income from other sources such as interest
  • Agricultural income up to ₹5,000
  • Total income up to ₹50 lakh

Who Is Not Eligible to File ITR-1?

ITR-1 cannot be used if the taxpayer has:

  • Capital gains income
  • Foreign income or foreign assets
  • Business or professional income
  • More than two house properties
  • Directorship in a company
  • Investment in unlisted equity shares

2. ITR-4 (Sugam)

ITR-4 applies to:

  • Resident Individuals
  • Hindu Undivided Families (HUFs)
  • Partnership Firms (excluding LLPs)

earning income under presumptive taxation schemes such as:

  • Section 44AD
  • Section 44ADA
  • Section 44AE

with total income up to ₹50 lakh.

Ideal For

  • Small traders
  • Retail shop owners
  • Freelancers
  • Consultants
  • Professionals
  • Small transport operators

Filing Options Available

The department has now enabled both filing methods:

✔ Online Filing

Eligible taxpayers can directly prepare and file their return online without downloading any software or utility.

✔ Excel Utility (Offline Filing)

Taxpayers can also download the Excel utility, prepare the return offline, generate the JSON file, and upload it on the portal.

This option is especially useful for:

  • Chartered Accountants
  • Tax professionals
  • Bulk return filing
  • Detailed verification before submission

Documents Required Before Filing ITR

Taxpayers should keep the following documents ready:

  • PAN Card
  • Aadhaar Card
  • Form 16
  • AIS/TIS
  • Form 26AS
  • Bank statements
  • Interest certificates
  • Investment proofs
  • Home loan statement/certificate (if applicable)

Carefully Verify AIS and Form 26AS

Many taxpayers incorrectly rely only on Form 16 while filing returns.

Before filing, taxpayers should verify:

  • Interest income
  • Dividend income
  • TDS credits
  • Mutual fund transactions
  • Share market transactions
  • High-value transactions appearing in AIS

Any mismatch may lead to:

  • Income tax notices
  • Delay in refund processing
  • Defective return notices

New Tax Regime Continues as Default

For AY 2026–27, the New Tax Regime remains the default tax regime for individual taxpayers.

However, eligible taxpayers may still choose the old tax regime within the prescribed timelines.

Before selecting the regime, taxpayers should compare:

  • Available deductions and exemptions
  • Total taxable income
  • Rebate eligibility
  • Final tax liability

Expected Due Date for Filing ITR

The expected due date for non-audit taxpayers for AY 2026–27 is:

31 July 2026

Taxpayers are advised not to wait until the deadline because:

  • Heavy traffic may slow down the portal
  • Refunds may get delayed
  • Chances of filing mistakes increase near due dates

Advantages of Filing ITR Early

Faster Refunds

Early filers generally receive refunds sooner.

Easier Loan & Visa Processing

Income Tax Returns serve as valid income proof for:

  • Home loans
  • Vehicle loans
  • Business loans
  • Visa applications

Reduced Filing Errors

Early filing gives sufficient time to review and revise mistakes if needed.

Better Financial Planning

Taxpayers get clarity regarding tax payable or refund receivable at an early stage.

Steps to File ITR-1 or ITR-4

Step 1

Visit the Income Tax e-Filing Portal.

Step 2

Login using PAN and password.

Step 3

Navigate to:

e-File → Income Tax Return → File Income Tax Return

Step 4

Select:

  • Assessment Year: 2026–27
  • Relevant ITR Form

Step 5

Choose either:

  • Online Filing Mode
  • Offline Utility Mode

Step 6

Validate all details and submit the return.

Step 7

Complete e-Verification using:

  • Aadhaar OTP
  • Net Banking
  • Demat Account EVC
  • Bank Account EVC

Important Points to Check Before Submission

Before final filing, taxpayers should:

  • Verify bank account details carefully
  • Match TDS credits properly
  • Reconcile AIS/TIS information
  • Review deduction claims
  • Confirm tax regime selection accurately

Filing the wrong ITR form or incorrect reporting of income may result in notices from the Income Tax Department.

Conclusion

The enabling of ITR-1 and ITR-4 for AY 2026–27 marks the beginning of the income tax return filing season for millions of taxpayers. With both online filing and Excel utility options now available, eligible taxpayers and professionals can start filing returns immediately without waiting for the deadline.

Filing returns early not only helps in faster refund processing but also minimizes the risk of errors, mismatches, and notices. Taxpayers should carefully reconcile all income and tax details before final submission of their return.

Key Updates in ITR Forms (ITR-1, ITR-2, ITR-3, ITR-4) for AY 2026–27

For the Financial Year 2025–26, Income Tax Returns will be filed in 2026 as per the prescribed due dates. The government has already notified the updated ITR forms for Assessment Year 2026–27, incorporating several key changes to enhance transparency, ensure better compliance, and improve the accuracy of financial reporting.

ITR Form Formats / Templates

 

 

Income Tax Changes Announced in Union Budget 2026

Direct Tax Proposals in Budget 2026 – Key Highlights

In Union Budget 2026, the Government has announced a wide-ranging and future-oriented set of Direct Tax reforms aimed at simplifying tax laws, reducing disputes, improving compliance, and enhancing India’s appeal as a global investment destination. These measures signal a decisive shift from a complex, enforcement-driven regime to a trust-based, technology-enabled, and taxpayer-friendly tax system, aligned with the vision of Viksit Bharat.

1. New Income-tax Act, 2025 – A Structural Overhaul

One of the most significant announcements in Budget 2026 is the replacement of the Income-tax Act, 1961 with the Income-tax Act, 2025, effective from 1 April 2026.

The new legislation is designed to:

  • Be substantially shorter and simpler, with fewer sections and chapters

  • Use clear and unambiguous language to minimise interpretational disputes

  • Be easier for taxpayers and tax authorities to understand and implement

Simplified Income-tax Rules and redesigned return forms will be notified shortly, enabling individuals to comply without professional assistance.

2. Taxpayer Relief & Ease of Living Measures

The Budget introduces multiple measures to address long-standing taxpayer concerns:

MACT Interest Exemption

  • Interest awarded by the Motor Accident Claims Tribunal (MACT) to individuals will be fully exempt from tax.

  • No TDS will apply, irrespective of the amount received.

Rationalisation of TCS under LRS

  • TCS on overseas tour packages reduced to 2% (from 5% / 20%), without any threshold.

  • TCS on education and medical remittances under LRS reduced from 5% to 2%.

Clarity on TDS for Manpower Supply

  • Manpower supply services classified as contractor payments.

  • TDS rate capped at 1% / 2%, eliminating ambiguity and litigation.

Automated Lower / Nil TDS Certificates

  • Eligible small taxpayers can obtain lower or nil TDS certificates through an automated, rule-based system without Assessing Officer interaction.

Simplification of Form 15G / 15H

  • Depositories authorised to accept declarations centrally and share them with multiple companies, reducing repetitive filings.

3. Rationalised Return Filing Timelines

To ease compliance pressure:

  • Belated and revised returns can now be filed up to 31 March (earlier 31 December) on payment of a nominal fee.

  • Staggered ITR due dates introduced:

    • ITR-1 & ITR-2 (Individuals): 31 July

    • Non-audit cases and trusts: 31 August

4. Relief for Property Transactions Involving NRIs

For purchase of immovable property from a non-resident:

  • Resident buyers are no longer required to obtain a TAN.

  • TDS can be deposited using a PAN-based challan, similar to resident transactions.

5. One-Time Foreign Asset Disclosure Scheme (FAST-DS, 2026)

A special 6-month disclosure window has been introduced for genuine hardship cases involving small taxpayers.

Category A

  • Undisclosed foreign income / assets up to ₹1 crore

  • Payment of:

    • 30% tax

    • 30% additional tax (in lieu of penalty)

  • Immunity from prosecution granted

Category B

  • Foreign assets up to ₹5 crore

  • One-time fee of ₹1 lakh

  • Full immunity from penalty and prosecution

Immunity from prosecution is also retrospectively extended for non-immovable foreign assets up to ₹20 lakh.

6. Rationalisation of Penalty & Prosecution Regime

Key reforms include:

  • Assessment and penalty proceedings to be concluded through a single consolidated order

  • No interest on penalty amounts during pendency of first appeal

  • Pre-deposit for appeal reduced from 20% to 10%, limited to core tax demand

Updated Returns Post Reassessment

  • Taxpayers can file updated returns even after reassessment initiation by paying an additional 10% tax.

Penalty to Fee Conversion

  • Certain technical defaults (audit, TP report, SFT) converted into fee-based non-criminal defaults.

Decriminalisation Measures

  • Minor offences punishable only with fines

  • Maximum imprisonment reduced to two years

  • Penalties graded based on tax evasion quantum

7. Targeted Tax Relief for Cooperatives

  • Deduction extended to supply of cattle feed and cotton seed by primary cooperatives

  • Inter-cooperative dividend income allowed as deduction under the new tax regime

  • Three-year dividend exemption for notified national cooperative federations, subject to redistribution

8. IT Sector Boost & Transfer Pricing Certainty

  • IT and IT-enabled services consolidated under “Information Technology Services”

  • Uniform safe harbour margin of 15.5%

  • Threshold enhanced from ₹300 crore to ₹2,000 crore

  • Automated safe harbour approvals valid for 5 years

  • Fast-track unilateral APA with targeted 2-year resolution

9. Measures to Attract Global Business & Talent

  • Tax holiday till 2047 for foreign cloud service providers using Indian data centres

  • 15% safe harbour margin for data-centre support entities

  • 5-year tax exemption for non-residents supplying capital goods to bonded zone manufacturers

  • Exemption of global income for foreign experts residing in India up to 5 years

  • MAT exemption for non-residents taxed on presumptive basis

10. Tax Administration Reforms

  • ICDS to be merged with Ind-AS from FY 2027-28

  • Definition of “accountant” rationalised to support global expansion of Indian advisory firms

11. Other Key Direct Tax Measures

  • Buyback taxation shifted to capital gains for all shareholders

  • Additional tax for promoters to prevent arbitrage

  • TCS on liquor, scrap and minerals reduced to 2%; tendu leaves from 5% to 2%

  • STT increased on futures and options

  • MAT to become final tax from 1 April 2026, rate reduced to 14%, with limited MAT credit set-off

Conclusion

The Direct Tax proposals in Budget 2026 mark a bold move towards simplicity, certainty, and trust-based taxation. With a new Income-tax Act, substantial compliance relief, rationalised penalties, and strong incentives for investment and global integration, the reforms aim to strike a balance between revenue mobilisation and taxpayer confidence, supporting long-term economic growth.