Which ITR Form for AY 2026-27? Key Changes Explained
Deadline update (September 9, 2026): The August 31, 2026 due date for non-audit ITR-3 and ITR-4 has passed. You can still file a belated return under Section 139(4) until December 31, 2026, with a late fee under Section 234F of Rs 5,000 (Rs 1,000 if total income is up to Rs 5 lakh) plus interest under Section 234A. After that window closes, an Updated Return (ITR-U) under Section 139(8A) stays open for up to 48 months from the end of the assessment year. Tax Garden files belated returns on a fixed fee.
Picking the wrong ITR form means your return gets processed as defective under Section 139 9), triggering a notice from the CPC, and it ranks among the common ITR filing mistakes that delay refunds and invite notices. With three significant changes for AY 2026-27: ITR 1 now covers two house properties, ITR 3 gets an extended deadline for non-audit cases, and both ITR 1 and ITR 4 carry a new unrealised rent field, form selection errors are more likely than in prior years.
This guide covers every ITR form, who qualifies, and the changes that affect AY 2026-27 filing.
ITR Form Quick Reference
ITR 1 (Sahaj): AY 2026-27 Changes
Who Can File ITR 1
ITR 1 applies to a resident individual with:
- Salary or pension income
- One or two house properties (key change, see below)
- Interest income (savings, FD, etc.)
- Other sources income
- Total income does not exceed Rs. 50 lakh
Change 1: ITR 1 Now Covers Two House Properties
Prior to AY 2026-27, ITR 1 was restricted to taxpayers with one house property. Owners of a second house (even if self-occupied or let out) were forced to move to ITR 2.
What changed: From AY 2026-27, ITR 1 accommodates up to two house properties. You can stay on ITR 1 if:
- You own two houses (any combination of self-occupied and let-out)
- Neither house has a home loan with interest exceeding Rs. 2 lakh (standard loss set-off limit)
- Total income remains below Rs. 50 lakh
Who still needs ITR 2: If you own three or more properties, have foreign assets, or have capital gains, you cannot use ITR 1 regardless of this change.
Change 2: New Unrealised Rent Field in ITR 1
A new mandatory field for unrealised rent (rent the tenant did not pay) has been added to the house property section of ITR 1. This aligns with Section 25A of the Income Tax Act, which allows deduction of unrealised rent from Annual Letting Value.
Where to enter: In the house property section, after entering actual rent received, a new row asks for "Unrealised Rent" (rent legally due but not collected). Enter the amount here, the system automatically adjusts your Annual Letting Value (ALV) downward.
Condition to claim unrealised rent deduction:
- Steps taken to recover rent (legal notice or court filing preferred)
- Vacancy was not voluntary (tenant absconded or defaulted)
Who CANNOT Use ITR 1
- Agricultural income exceeds Rs. 5,000
- Director of a company
- Holds unlisted equity shares
- Has assets or signing authority outside India
- Has brought-forward losses
- TDS deducted under Section 194N (cash withdrawal above Rs. 1 crore)
ITR 2: No Major Changes for AY 2026-27
ITR 2 remains the form for resident and non-resident individuals and HUFs with:
- Capital gains (short-term or long-term)
- More than two house properties
- Foreign assets or foreign income
- Director of a company
- Unlisted equity shares
ITR 3: Extended Deadline for AY 2026-27
Who Files ITR 3
ITR 3 applies to:
- Individuals and HUFs with business or professional income not covered under presumptive taxation
- Partners in a firm (on their personal return, reporting firm income)
- Freelancers with multiple clients under Section 44AA books maintenance
- Business owners whose turnover does not require tax audit (below Rs. 1 crore for business, Rs. 50 lakh for professionals)
Change 3: August 31, 2026 Extended Deadline for Non-Audit ITR 3
The Central Board of Direct Taxes has extended the ITR 3 filing deadline for non-tax-audit cases to August 31, 2026 (from July 31, 2026).
Who benefits:
- Professionals (doctors, lawyers, architects, CAs, consultants) with gross receipts below Rs. 50 lakh
- Small business owners with turnover below Rs. 1 crore who are not required to get accounts audited
Who does NOT get this extension:
- Taxpayers liable for tax audit under Section 44AB, their deadline remains September 30, 2026 (subject to CBDT notification)
- Taxpayers with international transactions (Transfer Pricing cases): October 31, 2026
Deadline Timeline
ITR Filing Deadlines AY 2026-27
ITR 1, ITR 2, ITR 4
[PASSED: Deadline was August 3, 2026.] Salaried individuals, presumptive income taxpayers, standard deadline
ITR 3 (Non-Audit)
Business/professional income not requiring tax audit, extended deadline
ITR 3 (Tax Audit)
Cases requiring audit under Section 44AB, audit report (Form 3CA/3CB) also due
ITR 3 (Transfer Pricing)
International transactions with associated enterprises, Form 3CEB also due
Belated Return
If you missed the deadline, belated returns can be filed until December 31, 2026, but you will owe Section 234F penalty (Rs 1,000 for income up to Rs 5 lakh, Rs 5,000 for above Rs 5 lakh) and Section 234A interest 1% per month from August 1, 2026)
New Unrealised Rent Field in ITR 3
Like ITR 1, ITR 3 also carries the new unrealised rent field in the house property schedule. If you own let-out property and a tenant has defaulted, enter the uncollected rent in the designated field. The same Section 25A conditions apply.
ITR 4 (Sugam): Presumptive Income with Unrealised Rent Change
Who Files ITR 4
ITR 4 is for resident individuals, HUFs, and firms (excluding LLPs) opting for presumptive taxation under:
- Section 44AD: Business turnover up to Rs. 3 crore (cash receipts ≤ 5%)
- Section 44ADA: Professional receipts up to Rs. 75 lakh (cash receipts ≤ 5%)
- Section 44AE: Goods carriage vehicles (up to 10 trucks)
Unrealised Rent Field: Also in ITR 4
The new unrealised rent field has been added to ITR 4 as well. Presumptive taxpayers who also own let-out property can now record and deduct unrealised rent without switching to ITR 3.
ITR 4 Restrictions
Cannot use ITR 4 if:
- Turnover exceeds Rs. 3 crore (business) or Rs. 75 lakh (profession)
- Capital gains arise during the year
- Foreign income or assets exist
- Director of a company or holds unlisted shares
- Losses to be carried forward
ITR 5: Firms, LLPs, AOPs
No changes for AY 2026-27. ITR 5 covers:
- Partnership firms
- LLPs
- Association of Persons (AOP)
- Body of Individuals (BOI)
- Artificial Juridical Persons
Filing deadline: July 31, 2026 (non-audit); September 30, 2026 (audit cases).
Common ITR Form Selection Mistakes
AY 2026-27 Changes Summary
Sources: Income Tax Act 1961 (Sections 10, 25A, 44AD, 44ADA, 44AE, 139); CBDT Notification on ITR Forms AY 2026-27; Income Tax Department Instructions for each ITR form. Verified against forms notified by CBDT. For taxpayer-specific advice, consult a Chartered Accountant.
