ITR-1 & ITR-4 Utility Released for AY 2026-27
Key Changes Every Taxpayer Must Know
The Income Tax Department has officially opened the doors for FY 2025-26 filings. With the Excel utilities for ITR-1 (Sahaj) and ITR-4 (Sugam) now live on the e-filing portal, salaried employees, small business owners, and presumptive taxpayers can begin filing. But this year is not just a routine rollout — there are real, meaningful changes that could affect who files what, how, and by when.
The Income Tax Department released the Excel-based utilities for ITR-1 and ITR-4 for AY 2026-27 on 15 May 2026. Online filing is also activated simultaneously. Access both at incometax.gov.in.
What Are ITR-1 and ITR-4?
ITR-1 (Sahaj) is the simplest return form, designed for resident individuals with straightforward income — mainly salary or pension earners. Sahaj means “easy” in Hindi, and that is exactly the intent.
ITR-4 (Sugam) is for individuals, HUFs, and firms under the presumptive taxation scheme — small businesses, freelancers, and professionals declaring income at a fixed percentage under Sections 44AD, 44ADA, or 44AE. Sugam means “accessible,” reflecting its simplified compliance structure.
Who Can File?
- Resident individuals (not NRI / RNOR)
- Total income up to Rs.50 lakh
- Income from salary or pension
- Up to 2 house properties — New
- LTCG u/s 112A up to Rs.1.25 lakh — New
- Other sources — interest, dividends
- Agricultural income up to Rs.5,000
Who Can File?
- Individuals, HUFs, and Firms
- Total income up to Rs.50 lakh
- Business income u/s 44AD
- Professional income u/s 44ADA
- Goods carriage income u/s 44AE
- Up to 2 house properties — New
- Salary + presumptive income combination
Key Changes for AY 2026-27
These are not cosmetic updates. The CBDT has introduced substantive changes — some widening eligibility, others tightening disclosure requirements. Here is a precise breakdown.
Until last year, income from more than one house property forced taxpayers into ITR-2 — a far more complex form. From AY 2026-27, both ITR-1 and ITR-4 accommodate income from up to two house properties, subject to conditions. The schedule now includes more detailed fields for municipal taxes, interest on borrowed capital, and property classification (self-occupied vs. deemed let-out). This single change will bring a large segment of taxpayers back to the simpler forms.
Taxpayers with long-term capital gains from listed equities or equity mutual funds under Section 112A — up to Rs.1.25 lakh — can now report them in ITR-1, without migrating to ITR-2. This threshold aligns with the basic LTCG exemption on listed equities. Important: If you have short-term capital gains, LTCG exceeding Rs.1.25 lakh, or brought-forward capital losses, ITR-1 still does not apply. Do not assume otherwise.
Budget 2026 extended the revised return window significantly. You may now file a revised return up to 31 March 2027 for AY 2026-27 — an extension from the earlier cut-off of 31 December. Revised returns filed between 1 January 2027 and 31 March 2027 will attract a late fee of Rs.5,000. A new field for late fee details has been added across all ITR forms. This is a genuine relief for taxpayers who discover errors after the standard deadline.
Both forms now carry stronger validation checks cross-referencing your filed return with your Annual Information Statement (AIS) and Form 26AS. The department already has visibility into your salary credits, TDS, bank interest, dividends, and capital gains. Mismatches will be flagged faster this year. Reviewing your AIS carefully before filing is not optional — it is essential.
For AY 2026-27, the New Tax Regime is auto-selected by default. You must actively opt for the Old Regime while filing to claim deductions like Section 80C, 80D, HRA, or home loan interest under Section 24(b). If you file a belated return, you permanently lose the right to choose the Old Regime for that year — making on-time filing even more consequential.
ITR-4 has been updated with improved pre-filled data accuracy and cleaner reporting requirements for presumptive income under Sections 44AD, 44ADA, and 44AE. The form now includes improved disclosure requirements for digital transactions, more granular business income fields, and tighter validation for F&O transactions. Asset and liability reporting thresholds have also been revised upward.
The Income Tax Act, 1961 stands repealed with effect from 1 April 2026 under Section 536 of the Income Tax Act, 2025. However, AY 2026-27 returns for income earned during FY 2025-26 remain entirely governed by the old Act. The new Act comes into effect only from Tax Year 2026-27 and beyond. Use the existing ITR forms under the 1961 framework for your current filing. New challan forms under the 2025 Act are already live on the portal.
Important Due Dates for AY 2026-27
Budget 2026 introduced a staggered deadline structure. Different taxpayer categories now have different due dates. Know exactly which one applies to you.
| Taxpayer Category | Applicable Form | Due Date |
|---|---|---|
| Salaried individuals, pensioners & investors (no business income) | ITR-1 / ITR-2 | 31 July 2026 |
| Non-audit business & professional taxpayers (presumptive) | ITR-3 / ITR-4 | 31 August 2026 Extended — Budget 2026 |
| Taxpayers requiring tax audit u/s 44AB | ITR-3 / ITR-5 / ITR-6 | 31 October 2026 |
| Companies with international transactions (Form 3CEB) | ITR-6 | 30 November 2026 |
| Belated Return u/s 139(4) — late fee applicable | All Forms | 31 December 2026 |
| Revised Return u/s 139(5) — no penalty | All Forms | 31 December 2026 |
| Revised Return with late fee Rs.5,000 — Budget 2026 | All Forms | 31 March 2027 New — Budget 2026 |
| Updated Return — ITR-U u/s 139(8A) | All Forms | 31 March 2031 Up to 4 Years |
Penalties for Late Filing
Missing the due date carries a cascade of financial consequences — not just the flat fee under Section 234F, but also interest under Section 234A and the permanent loss of certain tax benefits.
Total Income ≤ Rs.5 Lakh
Total Income > Rs.5 Lakh
From Original Due Date
Beyond the monetary cost — late filing also means loss of carry-forward capital losses and, as noted earlier, permanent loss of the Old Tax Regime option for that year. File on time.
How to File ITR-1 & ITR-4 for AY 2026-27
The process is more streamlined than ever. File online directly on the portal, or use the Excel utility offline and upload the JSON file.
- Download the Utility or Open Online FilingGo to incometax.gov.in → Downloads → Excel Utilities → ITR-1 or ITR-4 for AY 2026-27. For online filing, login and select File Now.
- Gather All Required DocumentsForm 16, Form 26AS, Annual Information Statement (AIS), bank interest certificates, rent receipts for HRA, property loan statements, and capital gains statement from your broker.
- Pre-Fill and Cross-Verify All DataClick Pre-fill to auto-populate PAN, TDS, salary, and bank details. Cross-check every field against your AIS carefully. TDS mismatches are the most common cause of validation failures.
- Actively Select Your Tax RegimeNew Regime is the default. To claim 80C, 80D, HRA, or home loan interest, explicitly opt for the Old Regime before computing your tax liability.
- Fill All Income Schedules AccuratelyEnter salary, house property details (up to 2), LTCG if applicable, deductions, and advance tax or TDS details. The utility auto-computes your tax or refund.
- Validate, Generate JSON, and UploadFor offline: use the Validate button, fix errors, generate the JSON file, and upload on the portal. For online filing, review and submit directly.
- e-Verify Within 30 DaysVerify via Aadhaar OTP, Net Banking, or bank account validation within 30 days of filing. Without e-verification, your return is legally incomplete and no refund will be processed.
- File well before the deadline. Portal congestion in the final week of July is real. Early filing means faster refund processing too.
- Review your AIS before filing. The department already has your salary credits, TDS, bank interest, and capital gains data. Do not let your return contradict it.
- Two house properties in ITR-1 — read the conditions carefully. If your second property has complex loan structures or unrealised rent issues, consult a CA before filing.
- Presumptive taxpayers (ITR-4) — maintain clean digital transaction records. Validation checks are stricter this year and auto-verified against AIS.
- Compare both regimes before deciding. For most salaried taxpayers with limited deductions, the new regime now results in lower tax. Run both calculations first.
- Check Form 26AS after filing. Ensure TDS credits are correctly reflected. Mismatches can delay refunds considerably.
Who Cannot File ITR-1 or ITR-4?
Despite expanded eligibility, these forms have clear exclusions. You must file ITR-2 or higher if you:
- Have short-term capital gains from any asset class
- Have LTCG under Section 112A exceeding Rs.1.25 lakh
- Have brought-forward capital losses from prior years
- Own more than two house properties
- Are a Non-Resident Indian (NRI) or Resident but Not Ordinarily Resident (RNOR)
- Have foreign income or hold foreign assets
- Are a director in any company during the year
- Hold unlisted equity shares at any point during the year
- Claim double taxation relief under Sections 90 or 90A
- Have income under “Profits and Gains from Business or Profession” other than presumptive
Frequently Asked Questions
Need Expert Help With Your ITR?
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