Income Tax Return Filing Deadline Approaches with New Rules and Forms

The deadline for filing income tax returns (ITR) for the financial year 2025-26 (assessment year 2026-27) is fast approaching, with just over a month left until July 31st. Taxpayers must familiarize themselves with the changes in rules and forms for this filing season. Although the new Income Tax Act, 2025, came into effect on April 1, 2026, the filing for FY2025-26 will still be governed by the Income Tax Act, 1961.

Staggered dates for ITR 3, ITR 4

The due date for filing ITR 3 and ITR 4 (for non-audit cases) has been extended to August 31, 2026, a shift from the previous July 31 deadline. This change, announced by Finance Minister Nirmala Sitharaman in Budget 2026, aims to provide some relief to taxpayers and chartered accountants by spreading out the filing workload. Sudhakar Sethuraman, Partner at Deloitte India, notes that while this offers a limited cushion, the expanded disclosure requirements mean taxpayers should begin preparations earlier to avoid last-minute issues.

This extended timeline is also beneficial for individuals claiming foreign tax credit on their overseas income, aligning India's filing periods with those of many other countries. If you are a salaried individual who engaged in Futures & Options (F&O) or intra-day trading last fiscal year, you are required to use ITR 3. However, if you opt for the presumptive scheme under Section 44AD, you must use ITR 4; otherwise, ITR 3 is applicable, according to chartered accountant Himank Singla, Partner at SBHS and Associates.

Key changes in ITR forms

Several updates have been made to the ITR forms. Individuals with up to two house properties can now use the simpler ITR 1 or ITR 4 forms. A new field for reporting unrealised rent has been added to ITR 1 and ITR 4. Archit Gupta, Founder and CEO of Cleartax.in, points out that resident taxpayers with foreign retirement accounts can no longer claim rebates under Section 89A when filing ITR 1 or ITR 4.

The forms now reflect the revised capital gains tax regime. References to the old tax rates of 15% under Section 111A (short-term capital gains) and 10% under Section 112A (long-term capital gains) have been removed and replaced with the new applicable rates of 20% and 12.5%, respectively.

Additionally, taxpayers seeking deductions under Section 80GGC must now provide the name of the political party and its permanent account number (PAN) in Schedule 80GGC, as per Taxmann.

More detailed F&O, intra-day trading disclosures

Taxpayers who had share buyback, F&O, or intra-day trading transactions will need to furnish these details in ITR 3, 5, and 6. Separate reporting has been introduced for buyback losses, F&O, intraday, and other trading transactions, according to Sethuraman.

For F&O traders, the new forms require disclosure of key items debited and credited to the profit and loss account, including opening stock, purchases, direct expenses, sales, and closing stock. Specific columns have been added to report turnover from F&O trading and the income derived from such trading that is credited to the profit and loss account.

Be mindful of tighter scrutiny

These changes collectively indicate the income tax department's increasing focus on data-driven scrutiny and compliance. Mayank Mohanka, Founder of TaxAaram.com, states that the most significant change this year lies in the enhanced level of disclosures expected from taxpayers, with the department moving towards real-time validation of information rather than relying solely on post-filing scrutiny.