New ITR forms for the A.Y 2022-23

New ITR Forms for the A.Y 2022-23

Fully updated for AY 2026-27 (FY 2025-26) and AY 2027-28 (FY 2026-27)

For AY 2026-27, CBDT has notified refreshed ITR-1 through ITR-7 forms built around one unavoidable reality: the new tax regime under Section 115BAC is the default for every individual, HUF, AOP, BOI and AJP. At the same time, mandatory schedules for virtual digital assets, online-game winnings, and foreign assets now carry criminal exposure for non-disclosure. Choosing the wrong form, or sleepwalking into the default regime without running the numbers, can cost you a five-figure tax surplus or land you a Section 143(2) scrutiny notice.

What CBDT Changed for AY 2026-27: A Structural Overview

CBDT notifies revised ITR forms each year under Rule 12 of the Income-tax Rules, 1962. For AY 2026-27, the notification restructured the forms around five themes:

1. Default new regime — Section 115BAC(1A) applies automatically unless you actively opt out. Unlike before, salaried taxpayers no longer need a separate form to switch year on year; the ITR itself carries a regime-selection field. Taxpayers with business income must file Form 10-IEA to opt out of the new regime, and once they opt out they cannot re-enter the new regime in a subsequent year (subject to exceptions).

1. Dedicated VDA schedule — Income from crypto, NFTs and other notified virtual digital assets (VDAs) is taxed at a flat 30% under Section 115BBH with no deduction beyond cost of acquisition. A separate Schedule VDA in ITR-2 and ITR-3 requires you to list each VDA transaction — asset type, date of acquisition, sale consideration, cost — rather than lumping gains under "Capital Gains" or "Other Sources."

1. Online gaming schedule — Net winnings from online games are taxed at 30% under Section 115BBJ. The ITR now has a standalone sub-schedule linked to Section 194BA TDS credits from gaming platforms.

1. Enhanced Schedule FA — The foreign assets schedule in ITR-2, ITR-3, ITR-5 and ITR-6 carries new fields for beneficial ownership interests, foreign retirement accounts, and the peak balance of each foreign bank account. Non-disclosure triggers Black Money (Undisclosed Foreign Income and Assets) Act, 2015 consequences independently of the Income-tax Act.

1. AIS/TIS prefill integration — The e-filing portal at unknown node pre-populates salary, TDS, interest, dividends, and high-value transactions from your Annual Information Statement (AIS) and Taxpayer Information Summary (TIS). Treat this prefill as a starting draft, not a final return.

The Default New Tax Regime Under Section 115BAC: Understand Before You File

The new regime is no longer opt-in — you are in it unless you act. Here is what that means in practice.

New Regime Slabs for FY 2025-26 (AY 2026-27)

Budget 2025 revised the new regime slab structure as follows:

Standard deduction: Rs. 75,000 for salaried employees and pensioners (allowed under the new regime).

Section 87A rebate: Up to Rs. 60,000 for resident individuals whose total income does not exceed Rs. 12,00,000 under the new regime — effectively making income up to Rs. 12 lakh tax-free after the rebate. Note: this rebate does not apply to special-rate incomes such as short-term capital gains under Section 111A (15%) or VDA income under Section 115BBH (30%).

Old Regime Slabs for FY 2025-26

The old regime slabs remain:

• Up to Rs. 2,50,000: Nil | Rs. 2,50,001–5,00,000: 5% | Rs. 5,00,001–10,00,000: 20% | Above Rs. 10,00,000: 30%

Section 87A rebate under the old regime: up to Rs. 12,500 for income not exceeding Rs. 5,00,000.

How to Opt Out (Salaried vs. Business)

• Salaried individuals / pensioners: Select "Old Regime" in the regime toggle within the ITR itself, before filing. No separate form needed. You can switch year on year.
• Individuals and HUFs with business or professional income: File Form 10-IEA electronically on the income-tax portal before submitting the ITR. Once you opt out, you cannot switch back to the new regime in future years unless you permanently close the business.

Which ITR Form Is Right for You?

Use this decision sequence: status → income heads → disqualifying triggers → regime.

ITR-1 (Sahaj) — The Simplest Option

Who qualifies: Resident individuals (not ordinarily resident) with:

• Total income up to Rs. 50 lakh
• Income under: salary/pension, one self-occupied or let-out house property, other sources (interest, dividends)
• Agricultural income up to Rs. 5,000

Who is disqualified: Anyone with capital gains, business income, foreign assets or foreign income, directorship in any company, investment in unlisted equity shares, or TDS under Section 194N (cash withdrawal). Also disqualified if you are a director, or if Section 194N TDS has been deducted.

Practical note: ITR-1 is now fully online — there is no downloadable PDF version for this form. Use the pre-filled online form on the portal.

ITR-2 — The Capital Gains and Foreign Asset Form

Who must use it: Individuals and HUFs with income from capital gains (any asset — equity, debt, property, VDA), more than one house property, foreign assets or foreign income, directorship in any company, investment in unlisted equity shares, agricultural income exceeding Rs. 5,000, or income that disqualifies ITR-1 but does not include business/professional income.

Schedule VDA sits in ITR-2. If you sold Bitcoin, Ethereum, NFTs or any CBDT-notified VDA during FY 2025-26, ITR-2 is mandatory even if that is your only "out-of-ordinary" income.

ITR-3 — For Business and Professional Income

Who must use it: Individuals and HUFs earning income under "Profits and Gains of Business or Profession" (PGBP) under Section 28. This covers proprietary businesses, freelancers, partners drawing salary from a firm (the partnership files ITR-5; the individual partner files ITR-3), professionals in practice (doctors, architects, consultants), and anyone with complex capital gains plus business income.

ITR-3 requires full Balance Sheet and Profit & Loss disclosures in Schedule BP if turnover exceeds the tax-audit threshold or if you do not claim presumptive taxation.

ITR-4 (Sugam) — Presumptive Taxation

Who qualifies: Resident individuals, HUFs and firms (other than LLPs) declaring income under presumptive taxation:

• Section 44AD: Business turnover up to Rs. 3 crore (with 95%+ digital receipts threshold as applicable), declaring at least 8%/6% of turnover as income
• Section 44ADA: Professionals (notified under Section 44AA) with gross receipts up to Rs. 75 lakh, declaring at least 50%
• Section 44AE: Goods carriage operators

Total income limit: Rs. 50 lakh. If any other income pushes total income above Rs. 50 lakh, switch to ITR-3.

Disqualifying triggers: Directorship, foreign assets, capital gains, Section 194N TDS. If any of these apply, you must file ITR-3 instead.

ITR-5, ITR-6 and ITR-7

ITR-5: Partnership firms, LLPs, AOPs, BOIs, business trusts and investment funds. LLPs must disclose partners' capital accounts, profit-sharing ratios, and remuneration paid to partners. DSC-based e-verification is mandatory for LLPs.

ITR-6: All companies except those claiming exemption under Section 11 (charitable trust companies use ITR-7). E-verification only via DSC — no Aadhaar OTP or EVC allowed. Detailed disclosures on CSR expenditure under Section 135 and MSME outstanding creditors are now part of the JSON schema.

ITR-7: Trusts, institutions, political parties, research associations, universities and electoral trusts filing under Sections 139(4A), 139(4B), 139(4C) and 139(4D). Requires detailed schedules on Section 12A or 12AB registration, Section 80G approval, corpus utilisation, and compliance with new corpus-loan and accumulation rules introduced in recent Finance Acts.

The VDA Schedule: What You Must Report, Transaction by Transaction

The VDA schedule is not a summary — it demands transaction-level detail:

• Asset type: Bitcoin, Ethereum, NFT, or "other notified VDA"
• Date of acquisition and date of transfer
• Cost of acquisition (only allowable deduction — no brokerage, no STT, no exchange fees)
• Full value of consideration received or receivable
• Income from VDA (= consideration minus cost of acquisition; negative result cannot be set off)

Key rules you cannot afford to miss:

• VDA losses cannot be set off against any other income — not salary, not capital gains, not anything.
• VDA losses cannot be carried forward to subsequent years.
• TDS under Section 194S at 1% is deducted by exchanges on transactions above Rs. 50,000 per year (Rs. 10,000 for specified persons). Verify this against your Form 26AS before filing.
• Gifted VDAs are taxed in the recipient's hands at fair market value on the date of gift if received from a non-relative.

If you received VDA as salary in kind (e.g., startup employees paid in tokens), report it under salary at the FMV on the date of credit, then report any subsequent disposal in Schedule VDA.

Schedule FA — Foreign Assets You Cannot Skip

Schedule FA is mandatory in ITR-2 and ITR-3 (and ITR-5, ITR-6 for entities) for any resident individual who holds or had a beneficial interest in any foreign asset at any point during the calendar year falling within the financial year — even if there was no income.

Assets requiring disclosure:

• Foreign bank accounts (peak balance, account number, SWIFT/IBAN)
• Foreign financial interests (shares, partnerships, LLCs)
• Immovable property abroad
• Foreign trusts (as trustee, settlor or beneficiary)
• Foreign retirement accounts (401k, pension schemes, ISAs)
• Any account with signing authority even if not beneficially owned

The consequence of non-disclosure is severe: Under the Black Money Act, failure to report foreign assets can result in a flat penalty of Rs. 10 lakh per asset per year plus prosecution with imprisonment of three to ten years — irrespective of whether there is any tax payable. There is no threshold: even a dormant foreign bank account with a zero balance must be reported.

Filing Deadlines for AY 2026-27 (FY 2025-26)

Late filing fee under Section 234F: Rs. 5,000 if filed after the due date; reduced to Rs. 1,000 if total income does not exceed Rs. 5 lakh. Interest under Section 234A accrues on self-assessment tax due at 1% per month from the due date.

Updated returns under Section 139(8A) require payment of additional tax under Section 140B: 25% of aggregate of tax plus interest if filed within 12 months of the end of the AY, rising to 50% thereafter.

Step-by-Step: Using AIS/TIS Prefill to File Accurately

1. Log in to unknown node → Services → Annual Information Statement. Download both AIS (full detail) and TIS (aggregated summary).
2. Download Form 26AS from the TRACES link in the same portal for TDS/TCS credits.
3. Reconcile line by line: Match every interest entry in AIS against your bank passbooks. Match every dividend entry against your Demat statement. Match capital gains prefill against broker contract notes.
4. Submit AIS feedback for each disputed entry — use "Information is duplicate / incorrect" for errors. AIS does not get corrected automatically; your feedback is noted alongside the original entry.
5. Start the ITR using the "File Now" online flow or download the offline JSON utility from the portal.
6. Enter regime selection (new or old) before proceeding to income schedules.
7. Complete all applicable schedules: Do not leave VDA, Schedule FA, or 80G schedules blank if they apply, even if the amounts are small.
8. Validate the JSON using the offline utility's "Validate" function — fix all error flags before uploading.
9. Upload the JSON or submit the online form, then e-verify within 30 days using Aadhaar OTP, EVC (net banking or Demat), or DSC.

Worked Example: New Regime vs. Old Regime for a Mumbai Software Engineer

Priya is a salaried software engineer in Mumbai. Her gross salary for FY 2025-26 is Rs. 18,00,000. She pays Rs. 1,50,000 into PF and ELSS (80C), Rs. 25,000 for family health insurance (80D), and Rs. 50,000 into NPS (80CCD(1B)).

Under the Default New Regime

Slab calculation:

• 0–4 lakh @ Nil: Rs. 0
• 4–8 lakh @ 5%: Rs. 20,000
• 8–12 lakh @ 10%: Rs. 40,000
• 12–16 lakh @ 15%: Rs. 60,000
• 16–17.25 lakh @ 20%: Rs. 25,000

Tax before cess: Rs. 1,45,000 | Health & Education Cess 4%: Rs. 5,800 | Total tax: Rs. 1,50,800

Under the Old Regime (Opted by Priya)

Slab calculation:

• 0–2.5 lakh @ Nil: Rs. 0
• 2.5–5 lakh @ 5%: Rs. 12,500
• 5–10 lakh @ 20%: Rs. 1,00,000
• 10–15 lakh @ 30%: Rs. 1,50,000

Tax before cess: Rs. 2,62,500 | Cess 4%: Rs. 10,500 | Total tax: Rs. 2,73,000

The Verdict

The new regime saves Priya Rs. 1,22,200 — even after she claims Rs. 2,25,000 of deductions under the old regime. The revised slab structure makes the new regime competitive across a wide range of salaries.

When does the old regime win? When your total admissible deductions and exemptions (80C + 80D + HRA + Section 24(b) home loan interest + 80CCD(1B) + LTA + other items) comfortably exceed Rs. 3.75–4 lakh for the Rs. 18 lakh income band. Run the numbers specific to your situation. The crossover is higher as income increases, because the 30% slab in the new regime only kicks in above Rs. 24 lakh.

Common Mistakes That Trigger Notices

1. Wrong ITR form for VDA income Many taxpayers with crypto profits file ITR-1 or ITR-4 thinking it qualifies as "other income." It does not. A single VDA disposal — even a small one — mandates ITR-2 (if no business income) or ITR-3 (if you have business income). Filing the wrong form means the return is treated as defective under Section 139(9).

2. Not reporting zero-balance foreign accounts "The account is dormant" is not a valid reason to omit Schedule FA. If you held a bank account abroad on even one day in the calendar year 2025, it must be disclosed. Check old savings accounts from overseas assignments or education stints.

3. Skipping Form 10-IEA before filing the ITR Business-income taxpayers who want the old regime must submit Form 10-IEA before their ITR. Filing the ITR first and then trying to submit Form 10-IEA is not permissible. The portal will lock you into the new regime if the form has not been filed.

4. Ignoring AIS feedback before filing If AIS shows interest income of Rs. 1,20,000 and your bank statement shows Rs. 80,000, do not simply enter Rs. 80,000 and file. Submit an AIS feedback entry explaining the discrepancy, then report the correct figure in your ITR. Returns with a large variance between AIS data and declared income are flagged for prima facie adjustment under Section 143(1)(a).

5. Misclassifying STCG under Section 111A vs. 115BBH Listed equity sold on a recognised stock exchange attracts 20% STCG under Section 111A (as revised). VDA transfers attract 30% under Section 115BBH. These are separate schedules with no interoperability — do not net them.

6. E-verification delay The e-verification window is 30 days from the date of filing. If you miss this, the return is treated as if it was never filed (it remains invalid), and you will need to send a physical ITR-V to CPC Bengaluru or re-verify through the portal. Set a calendar reminder the day you submit.

7. Stale IFSC after bank merger Refunds to merged bank accounts (e.g., Dena Bank, Vijaya Bank accounts migrated to Bank of Baroda) can fail if the IFSC code was not updated after the merger. Update your pre-validated bank account on the portal before filing.

Refund, E-Verification and Post-Filing Steps

Once you e-verify successfully:

• CPC processing time: Clean, schedule-accurate returns with matching TDS credits are typically processed within 15–30 days of e-verification. Refunds are directly credited to your pre-validated bank account.
• Intimation under Section 143(1): You will receive an email and SMS intimation confirming the assessed tax, refund or demand. Review it carefully — CPC sometimes makes prima facie adjustments for disallowable deductions or mismatched TDS credits.
• Scrutiny selection under Section 143(2): Notices must be issued within six months from the end of the financial year in which the return was filed. If you receive one, respond within the prescribed time via the e-proceedings tab on the portal.
• Documentary retention: Keep supporting documents (Form 16, broker contract notes, bank statements, 80C premium receipts, foreign account statements) for at least six years from the end of the relevant AY. For foreign assets and VDA, err on the side of retaining records indefinitely.
• Refund re-issue: If a refund fails due to an invalid account, use Services → Refund Re-Issue on the portal to submit the correct bank details. Do this within 90 days of the failure notification.

Key Takeaways

• New regime is default for AY 2026-27 and AY 2027-28: You must actively opt out. Salaried taxpayers can do it within the ITR; business-income taxpayers need Form 10-IEA filed first.
• Income up to Rs. 12 lakh is effectively tax-free under the new regime for resident individuals after standard deduction and Section 87A rebate — but this does not apply to VDA, STCG, or other special-rate incomes.
• VDA income demands ITR-2 or ITR-3: There is no workaround, no netting of losses, and no carrying forward of VDA losses. Schedule it transaction by transaction.
• Schedule FA is non-negotiable: Even one dormant foreign account requires disclosure. The penalty under the Black Money Act is Rs. 10 lakh per asset, plus criminal prosecution.
• AIS/TIS prefill is a starting point, not a finished return: Reconcile every line, submit feedback for errors, and report the correct figure in your ITR.
• Non-audit due date is 31 July 2026: Late filing after this date costs Rs. 5,000 in Section 234F fees plus Section 234A interest. Filing an updated return under Section 139(8A) attracts an additional tax of 25–50% on the incremental liability.
• E-verify within 30 days: An unverified ITR is a nullity. If you miss the window, the return must be re-submitted or the physical ITR-V must reach CPC Bengaluru by post.