ITR Filing FY 2025-26: Which Form, Which Regime, What's New
You earn ₹15 lakh or more, your TDS is already deducted, and you assume filing is a formality. It isn't. For AY 2026-27 the ITR forms changed, the form you used last year may be the wrong one now, and the regime your employer locked in April can still be reversed — if you do it before 31 July 2026. Get these two calls right and you keep a six-figure sum that the default path quietly hands to the tax department.
Summary
| What changed (AY 2026-27) | Before | Now |
|---|---|---|
| House properties in ITR-1 / ITR-4 | 1 | Up to 2 |
| LTCG u/s 112A in ITR-1 | Not allowed | Up to ₹1.25 lakh |
| Regime switch (salaried) | In the ITR | Still in the ITR — no separate form |
| Deductions entry in ITR | Free text | Exact clause from a drop-down |
| Filing deadline (ITR-1 / ITR-2) | — | 31 July 2026 |
| Belated return | — | Till 31 Dec 2026 (fee + interest) |
What changed this filing season
Two house properties now fit in ITR-1 and ITR-4
A second flat used to force you onto ITR-2. From AY 2026-27, a resident individual with total income up to ₹50 lakh and income from up to two house properties stays on ITR-1 (Sahaj). If a let-out property plus your self-occupied home was your only reason for the heavier form last year, check ITR-1 first this year.
A small equity gain no longer forces ITR-2
Long-term capital gains under Section 112A up to ₹1.25 lakh — the annual exemption on listed equity and equity mutual funds — can now be reported inside ITR-1 and ITR-4, as long as you have no carried-forward losses. Sold some MF units for a ₹90,000 profit? That alone no longer pushes you to ITR-2.
Tighter disclosures — keep your proof ready
There's a new field for rent that couldn't be realised, deductions from 80C to 80U now require you to pick the exact clause from a drop-down (no vague entries), and 80G donations need a transaction reference number and the donee's details. Form 26AS has also been slimmed to show only TDS/TCS and advance/self-assessment tax, so reconcile it against your AIS before filing.
Which ITR form do you file now? A 2-minute check
- ITR-1 (Sahaj): resident, total income ≤ ₹50 lakh, from salary/pension, up to two house properties, other sources, and LTCG u/s 112A ≤ ₹1.25 lakh — with no carried-forward losses and no agricultural income above ₹5,000.
- Move up to ITR-2 if: income crosses ₹50 lakh, you have capital gains beyond the ₹1.25 lakh 112A limit (or any other capital gains), foreign assets or income, unlisted shares, ESOPs in an unlisted company, or you're a director or a non-resident.
- ITR-3 / ITR-4: any business or professional income (ITR-4 for presumptive income under 44AD / 44ADA / 44AE).
The headline: a lot of salaried people who filed ITR-2 last year only because of a second flat or a tiny equity gain can drop back to the simpler ITR-1 this year.
Can you still switch tax regime? The salaried-vs-business rule
The new regime under Section 115BAC is the default. What you do next depends on your income type:
- Salaried / no business income: you choose old or new every year, directly inside ITR-1 or ITR-2. No separate form, no lock-in. The regime your employer used for TDS does not bind your return.
- Business or professional income (ITR-3 / ITR-4): you must file Form 10-IEA before the due date to opt for the old regime, and your ability to switch back later is restricted.
Now the money question. At ₹15 lakh and above, the new regime usually wins — because the old regime only pays off once your deductions get large:
| Gross salary (FY 2025-26) | New-regime tax | Old regime wins only if deductions exceed |
|---|---|---|
| ₹15 lakh | ₹97,500 | ~₹5.4 lakh |
| ₹24 lakh | ₹2,92,500 | ~₹7.9 lakh |
| ₹30 lakh | ₹4,75,800 | ~₹8.0 lakh |
New-regime tax includes the ₹75,000 standard deduction and 4% cess. The Section 87A rebate makes income up to ₹12 lakh tax-free under the new regime, so at ₹15 lakh+ you won't get a rebate — it's a straight fight between slabs and deductions.
Real example: salaried, ₹28L CTC, Bengaluru
Priya assumes the old regime is better because she claims ₹4.2 lakh in deductions — ₹1.5 lakh under 80C, ₹2 lakh of home-loan interest under Section 24(b), ₹50,000 under 80CCD(1B), and ₹20,000 under 80D. The actual filing math:
| Item | Old regime | New regime |
|---|---|---|
| Deductions claimed | ₹4.2 lakh | ₹75,000 (standard) |
| Annual tax | ₹5,31,960 | ₹4,13,400 |
| Difference | — | ₹1,18,560 saved |
Even with ₹4.2 lakh of genuine deductions, the new regime is ₹1.18 lakh cheaper for the year. For the old regime to win at her income, her deductions would have to cross roughly ₹7.9 lakh — and she'd discover that only by running both, not by trusting last year's choice.
What to do this week
- Download your AIS and Form 26AS from the e-filing portal and reconcile every TDS entry before you open the form.
- Run both regimes on your real numbers — your salary, deductions and gains change every year, so last year's pick is not automatically right.
- Pick the correct form: if a second property or a sub-₹1.25 lakh equity gain was your only reason for ITR-2, try ITR-1 this time.
- File by 31 July 2026. A belated return under Section 139(4) is allowed till 31 December 2026 but adds a late fee plus interest under Section 234A.
File once, file right
ITR season is the one moment each year your entire financial picture sits on a single screen — and the wrong regime or the wrong form quietly costs you a lakh or more, or weeks of notices. Decide the form and the regime deliberately before you hit submit, not after.
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