Every July, millions of taxpayers rush to file their income tax returns at the last minute — and every July, the same avoidable mistakes cost them money, notices, and refund delays. This year, the deadline landscape has changed. A new staggered calendar, fresh ITR form changes from CBDT, and a key Budget 2026 amendment on revised returns mean that what worked for you last year may not protect you in AY 2026-27. This guide gives you a clear, practitioner-level breakdown of everything that matters — so you can file with confidence, not guesswork.

Assessment Year 2026-27 corresponds to income earned during Financial Year 2025-26 — that is, income from 1 April 2025 to 31 March 2026. When you log in to the income tax e-filing portal at incometax.gov.in, make sure you select 'AY 2026-27' and not any other year. Selecting the wrong assessment year is one of the most common — and most easily avoidable — errors taxpayers make.

An important clarification for this year: although the Income Tax Act 2025 came into force from 1 April 2026, it does not govern your AY 2026-27 filing. Your return for FY 2025-26 continues to be governed entirely by the Income Tax Act, 1961. The old section references — 80C, 80D, 24(b), 87A, 139, 234A, 234F, 115BAC — all remain applicable. The new Act will apply only when you file for Tax Year 2026-27 (FY 2026-27) returns from July 2027 onwards. The Income Tax Department has confirmed this explicitly and has even created two separate tabs on the e-filing portal to prevent confusion between the two Act frameworks.

The CBDT notified all ITR forms — ITR-1 through ITR-7, along with ITR-V and ITR-U — on 30 March 2026, ahead of the start of the financial year. This early notification is a welcome change. Last year, delayed notifications caused portal glitches and ultimately forced an extension of filing deadlines. This year, the tax department has also released online filing utilities and offline Excel utilities for ITR-1 through ITR-4 well before the due date, and over 56 lakh returns had already been filed by 21 June 2026.

•       Salaried individuals and those filing ITR-1 or ITR-2: due date is 31 July 2026 (no change from last year).

•       NEW: Non-audit business/professional income taxpayers (ITR-3, ITR-4): due date extended to 31 August 2026 under Finance Act 2026.

•       Tax audit cases (Section 44AB): 31 October 2026. Tax audit report in Form 3CA/3CB/3CD must be filed by 30 September 2026.

•       Belated return (Section 139(4)): 31 December 2026. No carry-forward of business or capital losses allowed.

•       Revised return (Section 139(5)): 31 December 2026 (no late fee) or up to 31 March 2027 with late fee under Section 234I — a Budget 2026 extension.

•       ITR-1 (Sahaj) expanded: now covers income from up to two house properties, and LTCG under Section 112A up to ₹1.25 lakh.

•       New Tax Regime (Section 115BAC) remains the default: opting for Old Regime must be done before the original due date.

•       Late filing fee under Section 234F: ₹5,000 (₹1,000 if total income ≤ ₹5 lakh). Interest under Section 234A: 1% per month on unpaid tax.

•       E-verify your return within 30 days of submission. An unverified return is treated as if never filed.

Here is a consolidated view of every relevant deadline for FY 2025-26 returns. Bookmark this table — it covers everything from original filing to updated returns.

Choosing the wrong ITR form results in a defective return notice under Section 139(9) of the Income Tax Act 1961. You get 15 days to rectify — failing which the return is treated as invalid. The CBDT notified the forms on 30 March 2026, followed by a corrigendum on 10 April 2026 correcting technical errors in Schedule-IT of ITR-1 and sub-row numbering in ITR-4, among other schedules.

1. ITR-1 (Sahaj) Now Covers Two House Properties

This is the most significant structural change in this year's forms. Until AY 2025-26, a taxpayer with income from more than one house property was required to move to ITR-2, which is a more complex form. From AY 2026-27, ITR-1 allows reporting of income from up to two house properties. This brings relief to a large number of salaried individuals who own one self-occupied property and a second let-out or vacant property. Additionally, a new field for unrealised rent has been added to ITR-1 and ITR-4.

There is, however, an important clarification: ITR-1 cannot be used if total income exceeds ₹50 lakh, if there is income from business or profession, if the taxpayer is an NRI, if foreign assets are held, if the taxpayer is a director in a company, or if unlisted equity shares are held.

2. LTCG Under Section 112A Allowed in ITR-1

Earlier, even a small amount of long-term capital gains from listed equity shares or equity mutual funds required a taxpayer to shift from ITR-1 to ITR-2. From AY 2026-27, LTCG under Section 112A up to ₹1.25 lakh can be reported within ITR-1 itself. If your LTCG from listed equity exceeds ₹1.25 lakh, or if you have any STCG or capital gains from other assets, you must still use ITR-2 or ITR-3 as applicable.

3. Old Capital Gains Rate Fields Removed

The dual reporting requirement for capital gains (pre- and post-23 July 2024 rate changes) was a major pain point last year because of the capital gains tax revision in Union Budget 2024. For AY 2026-27, since the old rates of 15% STCG and 10% LTCG on listed equity are no longer applicable to income earned in FY 2025-26, those fields have been removed from all relevant ITR forms. This simplifies the capital gains schedules considerably.

4. Detailed Tax Regime Disclosure Fields

The notified forms now include detailed disclosure requirements for opting in or out of the new tax regime under Section 115BAC. For salaried individuals and those without business income, the choice between old and new regime can be made directly in the ITR form itself. For those with business income, Form 10-IEA must be filed before the due date to opt for the old regime.

5. Investment Disclosure for ITR-4 Filers

Taxpayers filing under the presumptive taxation scheme (Sections 44AD, 44ADA, 44AE) using ITR-4 are now required to disclose investment and bank balance details under the Financial Particulars schedule. This is aimed at improving income-investment reconciliation and is a significant additional compliance obligation for small business owners and professionals who were previously not required to provide this level of detail.

6. Representative Assessee Field Added

A new field has been added in all ITR forms to indicate whether the return is being filed by a representative assessee — for instance, a guardian filing on behalf of a minor or a legal heir filing on behalf of a deceased. This change has been made across the entire ITR series.

7. Section 89A — Foreign Retirement Account Relief

The relief for double taxation on foreign retirement accounts under Section 89A is now available only through ITR-2 and ITR-3, having been removed from ITR-1 and ITR-4. Taxpayers with foreign retirement accounts such as 401(k) plans or similar structures should be aware of this change and file the appropriate form.

The New Tax Regime under Section 115BAC has been the default regime since AY 2024-25. This means if you do nothing — if you simply log in and file without making an explicit choice — the portal will apply the new tax regime to your income. This is not a mistake on the portal's part. It is by design.

For taxpayers without business income: you can opt for the old regime directly in your ITR, but you must file on or before the due date under Section 139(1). If you file a belated return after the due date, the option to choose the old regime is lost. You will be taxed under the new regime by default, and this could result in a significantly higher tax liability if you have large deductions such as Section 80C, HRA, home loan interest, or medical insurance premiums.

For taxpayers with business income: the old regime option requires filing Form 10-IEA before the due date. Once opted for, it continues for subsequent years. To switch out of it, Form 10-IEA must be filed again.

Mistake 1: Selecting the Wrong ITR Form

This is perennial, and it remains the most frequent cause of defective return notices. A salaried individual with F&O trading income cannot file ITR-1. A freelancer with professional income cannot use ITR-1 or ITR-2. Each form has strict eligibility conditions. Spend five minutes checking your income sources before selecting the form. A defective return under Section 139(9) is not the end of the world — but it adds stress and delays your refund.

Mistake 2: Ignoring AIS and Form 26AS Before Filing

The Income Tax Department already knows about most of your income — your salary TDS, interest income, dividend credits, securities transactions, and even foreign remittances. All of this flows into your Annual Information Statement (AIS) and Form 26AS (Taxpayer Information Summary, or TIS). If your ITR does not match this data, you will get a notice. The most common mismatches are interest income not declared, TDS not claimed, and multiple employer incomes not aggregated. Always download both AIS and Form 26AS before filing and reconcile line by line — this step alone prevents most post-filing notices.

Mistake 3: Not Reconciling Multiple Form 16s

Taxpayers who changed jobs during FY 2025-26 may receive Form 16 from two or more employers. Each employer deducts TDS based on the salary paid by them alone, often without accounting for the income declared at the other employer. This can result in under-deduction of TDS and an outstanding tax demand at the time of filing. Add the salary from all employers, aggregate the TDS, and compute the correct tax before submitting.

Mistake 4: Missing the Deadline and Losing the Old Tax Regime

We mentioned this under the tax regime section, but it deserves its own flag here. If you miss the original due date and file a belated return after 31 July 2026 (or 31 August 2026 for ITR-3/ITR-4 non-audit filers), you automatically lose the option to choose the old tax regime. For someone claiming ₹1.5 lakh under Section 80C, substantial HRA, and a home loan interest deduction, the difference in tax can run to tens of thousands of rupees.

Mistake 5: Not Reporting All Capital Gains — Including Mutual Funds

With market volumes at historic highs, many investors made redemptions from equity mutual funds, debt funds, and ELSS during FY 2025-26. Capital gains on mutual fund redemptions, dividend income on shares (taxable as 'Income from Other Sources'), and gains from property sales must all be declared. The AIS picks up all securities transactions reported by depositories and mutual fund registrars. Omitting these while the AIS already has the data is a guaranteed trigger for scrutiny.

Mistake 6: Not Disclosing Foreign Assets in Schedule FA

India's Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 has very sharp teeth. If you are a resident taxpayer who holds foreign bank accounts, RSUs or ESOPs from a foreign employer, foreign investment accounts, or any foreign property, you must disclose these in Schedule FA of ITR-2 or ITR-3. This disclosure is on a calendar-year basis (January to December), not financial-year basis. Non-disclosure can attract penalties under the Black Money Act — not just the income tax law — even for relatively modest sums.

Mistake 7: Claiming Incorrect HRA Without Rent Receipts

Many employees fail to submit rent receipts to their employers before the cut-off date, resulting in the full HRA being included in taxable income on Form 16. You can still claim HRA exemption under Section 10(13A) while filing your return, provided you genuinely paid rent. Ensure the landlord's PAN is quoted in the return if annual rent exceeds ₹1 lakh. Claiming HRA without having paid rent is a false claim and can result in demand, penalty, and prosecution.

Mistake 8: Not Paying Self-Assessment Tax Before Filing

If after accounting for TDS and advance tax payments, a balance tax is payable, it must be paid as self-assessment tax before filing the return. Filing with outstanding tax payable results in interest under Section 234B and 234C in addition to Section 234A interest. The return can still be filed and verified, but the portal will reflect outstanding demand. Pay the tax, update the challan details, and then file. Do not leave this step for later.

Mistake 9: Forgetting to E-Verify the Return

Filing and submitting the return on the portal is not the end of the process. You must e-verify the return within 30 days of submission. An unverified return is treated as if it was never filed. E-verification can be done through Aadhaar OTP, net banking login, bank account EVC, or Demat account EVC. If none of these methods is available, a signed copy of ITR-V must be sent by speed post to CPC Bengaluru within 30 days. This is the only situation where physical submission is accepted.

Mistake 10: Waiting for a Last-Minute Extension

Every year, a significant number of taxpayers wait till the last day — or even till after the last day — hoping the government will announce an extension. For AY 2026-27, this strategy is particularly risky. The CBDT released all ITR forms ahead of schedule, portal utilities have been available early, and over 56 lakh returns were filed by 21 June 2026 without any technical issues. Unlike AY 2025-26, where multiple glitches forced an extension in May 2025, this year the infrastructure appears solid. Do not count on an extension.

Businesses and professionals whose turnover exceeds the prescribed thresholds under Section 44AB are required to get their accounts audited and file a Tax Audit Report (TAR) in Forms 3CA/3CB and 3CD. The TAR must be filed at least one month before the ITR due date.

•       Tax Audit Report (Form 3CA/3CB/3CD) due by: 30 September 2026 (for ITR due date of 31 October 2026)

•       Transfer Pricing Audit Report (Form 3CEB) due by: 31 October 2026 (for ITR due date of 30 November 2026)

A new penalty structure for delayed Tax Audit Reports has also been introduced for Tax Year 2026-27 (i.e., for filings from 2027 onwards): delay of up to one month will attract ₹75,000, and delay beyond one month will attract ₹1.5 lakh. These rates apply from TY 2026-27 and are not directly applicable to AY 2026-27 filings, but they signal the government's intent to tighten audit compliance going forward.

Late filing is not just a procedural lapse. Here is a complete picture of what you stand to lose:

•       Late filing fee under Section 234F: ₹5,000 for income above ₹5 lakh; ₹1,000 for income up to ₹5 lakh. This fee is mandatory even if no tax is outstanding.

•       Interest under Section 234A: 1% per month (or part thereof) on the outstanding tax amount from the due date till actual filing.

•       Loss of carry-forward benefits: Business losses and capital losses (except house property losses) cannot be carried forward to future years if the return is filed after the original due date. This is often the most financially significant consequence.

•       Loss of old tax regime option: As explained above, belated filers are locked into the new tax regime by default.

•       Delayed refund and no refund interest: Refunds from late-filed returns are processed later and do not carry interest from the due date.

•       Adverse impact on loan applications and visa processing: Banks, NBFCs, and consulates routinely ask for ITR acknowledgements. Late or missing filings create complications.

If you have missed the original due date, file a belated return under Section 139(4) before 31 December 2026. A belated return is far better than no return at all. If you discover errors after filing, a revised return under Section 139(5) can be filed without late fee up to 31 December 2026, or with a late fee under Section 234I up to 31 March 2027.

AY 2026-27 brings a more structured and, in some ways, more taxpayer-friendly compliance environment. The early notification of forms, the expansion of ITR-1 to cover two house properties and small LTCG, the extended deadline for non-audit business filers, and the Budget 2026 extension for revised returns — these are all genuine improvements. At the same time, the new staggered deadline system means you need to identify your specific due date first, not assume it is 31 July.

The income tax department's data analytics capabilities have improved every year. The AIS today captures a remarkable breadth of your financial activity. Filing an accurate, complete return — on time — is not just about avoiding penalties. It is about building a clean tax record that serves you in loan applications, visa interviews, and as the foundation of your financial credibility.

If your return is straightforward — salary, one or two properties, small capital gains — file it now. Do not wait for July 31. Every day you wait is a day you could spend on other things. If your income sources are complex — business income, multiple capital gains, foreign assets, partnership income — engage a qualified tax professional to ensure accuracy. The cost of professional advice is far less than the cost of a wrong return.

Q: What is the last date to file ITR for salaried individuals for AY 2026-27?

A: The last date for salaried individuals filing ITR-1 or ITR-2 is 31 July 2026. This applies to those with income from salary, pension, house property, and capital gains (within ITR-2 limits).

Q: Has the ITR-3 filing deadline changed for AY 2026-27?

A: Yes. The Finance Act 2026 extended the ITR-3 and ITR-4 due date for non-audit business and professional income filers from 31 July to 31 August 2026. Audit cases still have a due date of 31 October 2026.

Q: Can I still file ITR-1 if I have two house properties in AY 2026-27?

A: Yes. CBDT has expanded ITR-1 (Sahaj) from AY 2026-27 to cover income from up to two house properties. Earlier, taxpayers with more than one property had to file the more complex ITR-2. However, ITR-1 is still restricted to total income up to ₹50 lakh and cannot be used if business income, foreign assets, or capital gains above ₹1.25 lakh (under Section 112A) are involved.

Q: What happens if I file my ITR after the due date?

A: Late filing attracts a fee of ₹5,000 under Section 234F (₹1,000 if income is ₹5 lakh or below), interest under Section 234A at 1% per month on outstanding tax, loss of carry-forward of business and capital losses, and loss of the option to choose the old tax regime. A belated return under Section 139(4) can be filed up to 31 December 2026.

Q: Is the new tax regime compulsory for AY 2026-27?

A: No, it is not compulsory, but it is the default regime under Section 115BAC. If you want to opt for the old regime, you must do so explicitly — in the ITR form itself (for non-business income) or through Form 10-IEA (for business income) — before the original due date under Section 139(1).

Q: Can I revise my ITR after filing?

A: Yes. A revised return under Section 139(5) can be filed up to 31 December 2026 without any late fee. Budget 2026 has extended this window to 31 March 2027 with a late fee under the newly inserted Section 234I. An updated return under Section 139(8A) can be filed within 4 years from the end of the relevant assessment year — i.e., up to 31 March 2031 for AY 2026-27 — subject to payment of additional tax.

Q: What is the penalty for not filing ITR at all?

A: If you are required to file but do not, in addition to late fees and interest, the Income Tax Department can levy a penalty under Section 270A equivalent to 50% of the evaded tax. In serious cases, prosecution under Section 276CC can result in imprisonment of 3 months to 7 years along with a fine.

Q: I sold equity mutual funds during FY 2025-26. Which ITR form should I file?

A: If your LTCG from listed equity or equity mutual funds under Section 112A does not exceed ₹1.25 lakh, and you have no STCG or other capital gains, you can now file ITR-1 from AY 2026-27. If LTCG exceeds ₹1.25 lakh, or you have STCG or capital gains from debt funds, property, or unlisted securities, you must file ITR-2.

Q: What is the e-verification deadline after filing?

A: You must e-verify the return within 30 days of online submission. An unverified return is treated as invalid. Methods include Aadhaar OTP, net banking EVC, bank account EVC, or posting the signed ITR-V to CPC Bengaluru.

Q: Does the Income Tax Act 2025 affect my AY 2026-27 return?

A: No. Although the Income Tax Act 2025 came into force on 1 April 2026, it does not apply to income earned during FY 2025-26. Your AY 2026-27 return is governed entirely by the Income Tax Act, 1961, including all its section references for deductions, exemptions, penalties, and deadlines. The new Act will apply only from Tax Year 2026-27 returns filed in 2027.

This article is published by TaxFlash Media LLP (www.taxflash.in) for general informational and educational purposes only. It is not intended to be, and should not be construed as, professional tax advice, legal advice, or a substitute for consultation with a qualified Chartered Accountant or tax professional. Tax laws are subject to frequent amendment, and while every effort has been made to ensure accuracy as of the date of publication (June 2026), readers are advised to verify current provisions before acting on this information. TaxFlash Media LLP assumes no liability for any loss or damage arising from reliance on this content. For personalised advice, consult a qualified professional.