Important Updates to Income Tax Return Forms for FY 2025-26
Key changes in ITR 1, 2, 3 and 4 forms in FY 25-26: Reporting of LTCG, buyback losses, F&O, intra-day trading & more; what new forms include
The Economic Times
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The Income Tax Department has revised Income Tax Return (ITR) forms for the Financial Year 2025-26, introducing new disclosure requirements for long-term capital gains, buyback losses, and trading activities. These changes aim to simplify filing and enhance income reporting for various taxpayer categories.
- 01New ITR forms include updated disclosure requirements for long-term capital gains and trading activities.
- 02ITR-1 allows income from up to 2 house properties and LTCG reporting up to ₹1.25 lakh.
- 03ITR-2 introduces detailed capital gains reporting and separate buyback loss disclosures.
- 04ITR-3 requires disclosures for Futures & Options trading and high-value transactions.
- 05ITR-4 permits income from 2 house properties and mandates bank balance disclosures.
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The Income Tax Department of India has implemented significant changes to the Income Tax Return (ITR) forms for the Financial Year 2025-26, which will be applicable during the Assessment Year 2026-27. The revised ITR-1, ITR-2, ITR-3, and ITR-4 forms now feature new disclosure requirements aimed at simplifying the filing process and improving income reporting. Key updates include the allowance of income from up to 2 house properties in ITR-1, along with the ability to report long-term capital gains (LTCG) under Section 112A up to ₹1.25 lakh. ITR-2 has introduced more detailed capital gains reporting and a separate disclosure for buyback losses, while ITR-3 mandates disclosures for Futures & Options (F&O) trading and high-value transactions. Additionally, ITR-4 now requires bank balance disclosures as of March 31, 2026, and no longer requires details from overseas pension account holders. These forms are officially applicable for income earned between April 1, 2025, and March 31, 2026, and were notified on March 31, 2026.
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These changes will streamline the income tax filing process for individuals and small businesses, potentially reducing errors and improving compliance.
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