Guide to Choosing the Right Income Tax Return Form for 2026
ITR filing 2026: Which income tax return form should salaried taxpayers and freelancers choose? Know the difference
Mint
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For the Assessment Year 2026-27, salaried taxpayers in India should file ITR-1 if their income is up to ₹50 lakh, while freelancers can choose between ITR-3 and ITR-4. Key changes include the ability for ITR-1 filers to report long-term capital gains and new tax rates introduced in the 2024-25 budget.
- 01Salaried individuals with income up to ₹50 lakh should file ITR-1.
- 02Freelancers can file ITR-3 or ITR-4, with the option for presumptive taxation.
- 03Changes to ITR-1 now allow reporting of long-term capital gains.
- 04New tax rates for long-term capital gains are set at 12.5% and 20%.
- 05Deadlines for filing vary based on the ITR form used.
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For the Assessment Year 2026-27, choosing the correct Income Tax Return (ITR) form is crucial for taxpayers in India. The Central Board of Direct Taxes (CBDT) has notified all ITR forms, with filing expected to ramp up around mid-May 2026. Salaried taxpayers earning up to ₹50 lakh must file ITR-1 (Sahaj), which now allows reporting of long-term capital gains (LTCG) from listed equity and mutual funds up to ₹1.25 lakh. Changes in the 2024-25 budget have standardized LTCG tax rates at 12.5% without indexation and 20% with indexation. Freelancers, on the other hand, should file either ITR-3 or ITR-4, with the option to declare only 50% of their receipts as taxable income under the presumptive taxation scheme. The due dates for filing are July 31, 2026, for ITR-1 and ITR-2, while ITR-3 and ITR-4 are due by August 31, 2026. Late filing is permitted until December 31, 2026, but will incur fees and interest.
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Understanding the correct ITR form can help taxpayers avoid penalties and ensure they take advantage of new tax benefits.
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