The income tax filing season is approaching once again, prompting taxpayers to prepare ahead of time. On March 30, 2026, the government officially announced the income tax return (ITR) forms, ranging from ITR-1 to ITR-7, for the assessment year 2026-27. This advance notification allows individuals, pensioners, and professionals to start organizing their return submissions. For most individual taxpayers, the deadline for filing their ITR remains July 31, 2026. Early filing can alleviate last-minute pressure and facilitates a quicker processing of refunds.

Changes Introduced in ITR-1

One notable amendment in the ITR-1 form, also known as Sahaj, aims to ease the filing process for many taxpayers. ITR-1 can now accommodate reporting income from up to two residential properties. Previously, individuals owning two houses were required to use more detailed forms such as ITR-2 or ITR-3. This adjustment, though seemingly minor, significantly streamlines the filing experience for salaried individuals who possess an additional property, particularly those with one self-occupied home and another rented out.

Eligibility Criteria for ITR-1

ITR-1 is specifically designed for resident individuals generating simple income sources, including salary, pension, and limited other earnings. However, several restrictions apply. Taxpayers will not qualify for ITR-1 if their income includes earnings from business or profession. This prohibition extends to individuals with short-term capital gains or long-term capital gains under Section 112A exceeding Rs 1.25 lakh. Additionally, specific income types such as lottery winnings, income from racehorses, or earnings taxed at distinct rates under particular sections exclude eligibility for this form. Taxpayers can also be disqualified if their income is subject to apportionment under Section 5A.

Alternative Filing Option: ITR-2

For those who do not meet the criteria for ITR-1, ITR-2 serves as an alternative. This form is suitable for individuals and Hindu Undivided Families (HUFs) without business or professional income. ITR-2 is typically appropriate for taxpayers with multiple income sources, including capital gains or more intricate financial arrangements requiring income from a spouse or minor child to be combined. However, ITR-2 is not intended for individuals earning business or professional income. Taxpayers earning such income—including payments like interest, salary, or commission received from a partnership firm—must select different forms, such as ITR-3.

Importance of Choosing the Correct ITR Form

Selecting the appropriate ITR form is crucial for taxpayers. Filing using an incorrect form may lead to the return being designated as defective, resulting in processing delays or necessitating re-filing. With the new forms released and an important change in ITR-1, taxpayers now have improved clarity and convenience for this filing season. Taking action early and ensuring accurate form selection remains essential for a smooth filing process.

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