New Income Tax Rule This Year: 10 Important ITR Changes for AY 2026-27 Every Taxpayer Should Know

If you're planning to file your Income Tax Return (ITR) for Assessment Year (AY) 2026-27, it's important to understand the new income tax rule this year before submitting your return. Several changes have been introduced that affect salaried employees, homeowners, investors, and small business taxpayers. These updates include revised ITR forms, new reporting requirements, capital gains rules, tax regime changes, and filing deadlines.

At Finowings, we simplify complex financial topics so you can file your tax return confidently and avoid costly mistakes. Here's a detailed guide to the new-income-tax-rule-this-year and what it means for taxpayers.

1. Returns for AY 2026-27 Will Still Be Filed Under the Income-tax Act, 1961

One of the biggest points of confusion is the introduction of the Income Tax Act, 2025. However, income earned between 1 April 2025 and 31 March 2026 will continue to be governed by the Income-tax Act, 1961. Therefore, taxpayers filing returns in 2026 must select Assessment Year 2026-27 and use the notified ITR forms under the existing law.

2. ITR-1 Now Allows Two House Properties

Among the biggest highlights of the new-income-tax-rule-this-year is the expansion of ITR-1 (Sahaj) eligibility. Eligible resident individuals with income up to ₹50 lakh can now report income from up to two house properties instead of one.

This change benefits many salaried taxpayers who own multiple residential properties and reduces the need to file the more detailed ITR-2.

3. ITR-4 Also Supports Two House Properties

Similar relief has been extended to taxpayers filing ITR-4 (Sugam) under the presumptive taxation scheme. Eligible individuals and businesses can now include income from two house properties while continuing to use the simplified ITR-4 form.

4. Separate Reporting for Unrealised Rent

The updated ITR forms now include a dedicated field for unrealised rent. Taxpayers who were unable to recover rent from tenants can report it separately, ensuring more accurate computation of taxable house property income.

Proper documentation should be maintained in case the rent is recovered in future years.

5. Easier Rules for Self-Occupied Houses

The new-income-tax-rule-this-year also simplifies the treatment of self-occupied residential properties. Taxpayers can generally claim up to two houses as self-occupied, without meeting some of the earlier occupancy-related conditions.

This change makes house property reporting much simpler for many homeowners.

6. Additional Personal Information Required

The Income Tax Department has introduced a secondary address field in the ITR forms. Taxpayers must now confirm whether their secondary address is the same as their primary address or provide separate details.

Before filing, ensure your:

• PAN details

• Mobile number

• Email ID

• Bank account information

are all updated correctly.

7. More Detailed Information for Tax Deductions

Another important new-income-tax-rule-this-year requires taxpayers to provide additional details while claiming deductions under Chapter VI-A.

Depending on the deduction claimed, you may need:

• Insurance policy numbers

• PRAN for NPS contributions

• Loan account details

• Donation transaction references

• Bank IFSC

• Disability certificate details

• Health insurance information

Keeping all supporting documents ready before filing will make the process much smoother.

8. Capital Gains Reporting Has Been Simplified

Taxpayers no longer need to separate capital gains transactions based on transfers before or after 23 July 2024. While reporting has become simpler, you must still accurately disclose:

• Purchase and sale dates

• Cost of acquisition

• Sale consideration

• Transfer expenses

• Applicable exemptions

• Short-term or long-term classification

Reconciling capital gains with your broker statements and AIS remains essential.

9. New Tax Regime Continues as Default

The revised tax slabs under the new tax regime remain applicable for AY 2026-27. Eligible resident individuals can also claim a higher rebate under Section 87A, making the new regime more attractive for many taxpayers.

However, taxpayers should compare both the old and new tax regimes before making a final decision, especially if they claim multiple deductions and exemptions.

10. Filing Deadlines Have Been Revised

The due dates for filing ITR now vary depending on the taxpayer category.

Generally:

• Most salaried individuals: 31 July 2026

• Eligible non-audit cases (including many ITR-4 filers): 31 August 2026

• Audit cases: 31 October 2026

• Transfer pricing cases: 30 November 2026

Belated returns can generally be filed until 31 December 2026, while revised returns may be submitted up to 31 March 2027, subject to applicable conditions.

Documents You Should Keep Ready

Before filing your return, keep these documents handy:

• Form 16

• Form 26AS

• Annual Information Statement (AIS)

• Bank statements

• Salary slips

• Home loan interest certificate

• Capital gains statements

• Investment proofs

• Insurance policy details

• Donation receipts

• NPS contribution details

Having complete documentation helps reduce errors and speeds up the filing process.

Common Mistakes to Avoid

Many taxpayers make avoidable errors while filing ITR. Some common mistakes include:

• Choosing the wrong assessment year

• Selecting an incorrect ITR form

• Ignoring interest income shown in AIS

• Forgetting income from a second house property

• Claiming deductions without supporting details

• Entering incorrect bank account information

• Not verifying the return after submission

Review your return carefully before filing to avoid notices or delays.

Final Thoughts

The new income tax rule this year introduces several taxpayer-friendly changes, including the ability to report two house properties in ITR-1 and ITR-4, simplified capital gains reporting, and updated tax rebate provisions. At the same time, the Income Tax Department now requires more detailed disclosures for deductions and personal information, making accurate documentation more important than ever.

At Finowings, we recommend understanding these changes before filing your return to avoid errors, maximise eligible tax benefits, and ensure timely compliance. Staying updated with the new-income-tax-rule-this-year will help you file your ITR smoothly and make informed financial decisions for AY 2026-27.