ITR Rules: Are you planning to file your Income Tax Return? Before you begin, it would be prudent to pause for a moment and take stock of the situation. There have been some significant changes to the tax filing rules this year.

ITR Rules 2026: Filing Income Tax Returns can often be a challenging process. As is the case every year, the Income Tax Department has once again commenced the online filing process. The Department has released Excel utilities for ITR-1 and ITR-4, enabling many taxpayers to initiate the filing process even before receiving Form 16—a document that typically becomes available by mid-June.

Interestingly, there are several key changes to the tax filing regulations this year. While the filing procedure may appear somewhat familiar at first glance, numerous modifications to the forms and reporting norms imply that taxpayers may need to be more vigilant than ever before. From new disclosure mandates to changes in the reporting of financial gains, filing your return for the Assessment Year (AY) 2026-27 may prove to be quite different from the experience of the previous year.

Furthermore, even though the new Income Tax Act, 2025, has come into force, this will mark the final round of filing returns under the provisions of the erstwhile Income Tax Act, 1961. Since the tax liability for the Financial Year 2025-26 will be computed strictly in accordance with the old legislation, taxpayers must exercise due diligence while filing their returns.

Reporting Income from Two Residential Properties

A major relief introduced this year is specifically aimed at taxpayers who own more than one residential property. Previously, salaried individuals filing ITR-1 (Sahaj) and small business owners filing ITR-4 (Sugam) had limited options available to them regarding the reporting of such income. However, taxpayers can now use these forms to disclose income derived from up to two residential properties. Simply put, this means that salaried individuals who own two houses can continue to use simplified income tax forms instead of having to navigate more complex ones.

New Disclosure Requirement Regarding Unrealized Rent

Alongside this, another change likely to catch the attention of landlords is a new disclosure requirement concerning unrealized rent. Specifically, the Income Tax Department has introduced a separate section titled “Amount of Unrealized Rent” within the ITR forms—including ITR-1 and ITR-4. Previously, taxpayers filing these forms did not have a designated space to provide details regarding unrealized rent. The objective of this change is to make the disclosure of rental income more comprehensive and transparent.

Disclosure of Bank Balance Details Now Mandatory

For taxpayers filing their Income Tax Returns (ITR-4) under the Presumptive Taxation Scheme, providing additional details has now become mandatory. Individuals covered under Sections 44AD, 44ADA, and 44AE are now required to declare the aggregate closing balance of all their active bank accounts as of March 31, 2026. This information must be furnished in Field E21 of the Income Tax Return (ITR-4). Tax experts warn that inaccurate reporting or the failure to disclose these balances could result in the issuance of tax notices or the imposition of penalties.