ITR-1 and ITR-4 filing for AY 2026-27 started on income tax portal | Major changes taxpayers should know
The Income Tax Department has now enabled online filing utilities for ITR-1 (Sahaj) and ITR-4 (Sugam) for Assessment Year 2026-27 on the Income Tax Portal.
Although the revised ITR forms were already notified earlier by CBDT, the important development is that taxpayers can now start filing returns using the online utilities made available on the portal.
The revised forms contain several significant changes impacting house property reporting, disclosure of investments, rebate eligibility in cases involving LTCG under section 112A and tracking of Form 10-IEA for old tax regime selection.
Key highlights
The revised ITR forms indicate deeper integration of income tax return data with AIS, banking information, GST disclosures and tax regime validation systems.
Detailed reporting introduced for house property income
One of the most significant changes in both ITR-1 and ITR-4 is the expansion of disclosure requirements relating to house property income.
Earlier, taxpayers were generally required to disclose only basic computation details such as annual value, municipal taxes and interest on housing loan.
However, the revised forms now require detailed property-wise reporting including:
- Complete property address
- Co-owner details and ownership percentage
- Tenant details
- PAN/Aadhaar/TAN of tenant in specified cases
- Unrealised rent details
Further, taxpayers can now report details of up to two house properties in ITR-1 and ITR-4.
This change is expected to benefit salaried individuals and presumptive taxpayers having more than one residential property who were earlier required to shift to ITR-2 or ITR-3 in various practical situations.
Separate disclosure of investments introduced in ITR-4
The revised ITR-4 now separately requires disclosure of Investments under financial particulars.
Earlier, no specific disclosure field existed for investments in presumptive taxation returns filed under sections 44AD, 44ADA and 44AE.
The new disclosure may have relevance for reporting and reconciliation relating to:
- Mutual funds
- Shares and securities
- Fixed deposits
- Other financial investments
The amendment reflects increased focus of the department towards financial profiling and analytics-based scrutiny even in presumptive taxation cases.
“The revised ITR forms clearly indicate stronger system-driven reconciliation of property, banking, investment and AIS related information.”
Inclusion of exempt LTCG u/s 112A in total income may impact rebate eligibility
Another important practical change relates to reporting of Long Term Capital Gains under section 112A.
Under the earlier utility structure, exempt LTCG up to Rs. 1.25 lakh under section 112A was generally not impacting total income for rebate eligibility in many practical situations.
However, in the revised forms, LTCG disclosure has now been integrated within the total income computation structure itself.
This may have significant implications for taxpayers claiming rebate under section 87A since inclusion of such LTCG in total income may result in crossing the prescribed rebate threshold.
Accordingly, taxpayers having exempt LTCG under section 112A should carefully evaluate the impact on rebate eligibility while filing return for AY 2026-27.
Extensive tracking introduced for Form 10-IEA and tax regime selection
The revised ITR-4 also introduces extensive system-driven tracking relating to Form 10-IEA and old/new tax regime selection.
The utility now seeks detailed information regarding:
- Whether Form 10-IEA was filed in earlier years
- Acknowledgement number of Form 10-IEA
- Assessment year for which the form was filed
- Whether taxpayer re-entered the new regime
- Subsequent re-entry acknowledgements and validation
This indicates that the department is now implementing automated validation for old tax regime eligibility in business and presumptive taxation cases.
Taxpayers filing ITR-4 should therefore carefully verify Form 10-IEA compliance before selecting old tax regime while filing return.
Key takeaways
- Filing utilities for ITR-1 and ITR-4 are now live on Income Tax Portal for AY 2026-27.
- Detailed property-wise disclosures have been introduced in both forms.
- Separate disclosure for investments added in ITR-4.
- LTCG reporting may impact rebate eligibility under section 87A.
- Extensive validation introduced for Form 10-IEA and old regime selection.
Conclusion
The revised ITR-1 and ITR-4 forms reflect the continued move of the Income Tax Department towards enhanced compliance monitoring, automated validation and deeper data reconciliation.
Taxpayers are advised to carefully review AIS, Form 26AS, house property disclosures, LTCG reporting and tax regime selection before filing returns for AY 2026-27.