Background & Key Context
Income tax returns to be filed for the upcoming Assessment Year 2026-27 continue to be governed by the existing rules and return forms, with no immediate change for taxpayers. “For the upcoming assessment year, taxpayers will file their returns under the existing rules and prescribed forms, with no changes in the ITR forms for AY 2026–27,” a source from the Central Board of Direct Taxes said.
This is a crucial clarification amid a major legislative transition in India’s tax system. The Income Tax Act, 2025 was enacted on 21 August 2025 to replace the existing Income Tax Act, 1961, and is slated to be effective from Tax Year 2026-27 (i.e., FY 2026-27, starting from April 1, 2026). However, for returns relating to income earned during FY 2025-26, the old framework continues to apply.
ITR Forms Applicable for AY 2026-27 (FY 2025-26)
To remove all confusion, the CBDT has released the new Income-tax Rules, 2026 along with detailed transition clarifications. Even if the return is filed after April 1, 2026, the administering law remains the Income Tax Act, 1961, because the income belongs to a pre-transition year.
This means taxpayers will continue filing ITR-1 (Sahaj), ITR-2, ITR-3, ITR-4 (Sugam), ITR-5, ITR-6, and ITR-7 under the existing framework — the same forms broadly used for AY 2025-26.
The New Income Tax Rules, 2026 — What Changed
While ITR forms for AY 2026-27 remain on the old structure, CBDT has simultaneously notified sweeping changes under the Income Tax Rules, 2026, effective from April 1, 2026.
Simplification of the Framework
The new Income Tax Rules 2026 simplify the tax framework by reducing the number of rules from 511 to 333, while introducing updated PAN requirements, revised allowance limits, and simplified ITR forms.
The re-engineering of forms and rules is guided by three key objectives: simplification of language, standardisation of terminology for consistent interpretation and reporting, and enhanced pre-filling capabilities to reduce errors and inconsistencies between reported data and ITRs. “We have standardised terminology. Any term used in one form would mean the same thing in another form. This helps in integration of data and reduces interpretation issues. It also brings consistency in reporting because the forms are used by taxpayers, reporting agencies, banks and through TDS systems,” an official said.
Key Form-Level Changes Under IT Rules, 2026
Major income tax form changes include renaming Form 16 as Form 130, clubbing of Form 15G and Form 15H into a single Form 121, and Form 26AS as Form 168.
The updated forms and guidance notes are designed to ensure a smoother transition to the new tax framework, with a simplified filing structure using clearer formats, structured disclosures, and improved reporting fields. The new forms also incorporate the “Tax Year” concept, replacing the earlier Assessment Year terminology for better understanding.
HRA Exemption Expansion
The Income Tax Rules, 2026 have extended the 50% HRA exemption to include Bengaluru, Pune, Hyderabad, and Ahmedabad. From April 1, 2026, taxpayers in 8 cities can benefit from 50% HRA exemption — Delhi, Ahmedabad, Chennai, Bengaluru, Kolkata, Pune, Mumbai, and Hyderabad. Taxpayers will also be required to disclose their relationship with the landlord to ensure no false HRA exemptions are claimed.
Extended Due Date for ITR-3 & ITR-4 Filers
Effective from April 2026, the due date to file ITR-3 and ITR-4 for non-audit taxpayers has been extended to 31st August from the end of the relevant tax year. This due date is also applicable for FY 2025-26 (AY 2026-27). However, the due date for ITR-1 and ITR-2 remains the same, i.e., 31st July.
ITR Forms Under Income Tax Act, 2025 — Timeline for the Future
For income earned in FY 2026-27, taxpayers will file ITR as per the forms to be notified under the Income Tax Act, 2025 — and these forms will be notified before April 1, 2027. The Ministry of Finance, in a written reply in the Lok Sabha on December 8, 2025, stated that “ITR forms relating to Income-tax Act, 2025 will require the changes in consequence of amendments to the said Act made during Budget 2026, and, accordingly, ITRs pertaining to the first tax year 2026-27 shall be notified prior to FY 2027-28.”
FAQs & Guidance Notes Released by CBDT
The CBDT has released detailed FAQs and guidance notes on forms prescribed under the Income Tax Rules, 2026, providing clarity on updated return filing formats and compliance requirements ahead of the rollout of the Income Tax Act, 2025. Taxpayers and professionals are advised to review the new formats carefully before filing returns for FY 2026-27.
Key Takeaways for Taxpayers
| Aspect | AY 2026-27 (FY 2025-26) |
| Applicable Law | Income Tax Act, 1961 |
| ITR Forms | Existing ITR-1 to ITR-7 (no major structural change) |
| ITR-1 & ITR-2 Due Date | 31st July 2026 |
| ITR-3 & ITR-4 (Non-Audit) Due Date | 31st August 2026 |
| Belated Return Deadline | 31st December 2026 |
| Revised Return Deadline | 31st March 2027 |
| New IT Rules, 2026 | Effective 1st April 2026 (for transactional forms) |
Bottom Line
The CBDT’s approach ensures a smooth, non-disruptive transition for taxpayers. While the Income Tax Act, 2025 and Rules, 2026 mark a landmark structural overhaul — reducing rules, renaming forms, expanding pre-fill capabilities, and widening HRA benefits — taxpayers filing returns for FY 2025-26 (AY 2026-27) will continue using the familiar ITR forms under the Income Tax Act, 1961. The new ITR forms under the Income Tax Act, 2025 will formally come into play from FY 2027-28 filings onwards.
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