India CBDT rolls out ITR-1 and ITR-2 updates for FY 2025‑26

The Central Board of Direct Taxes (CBDT) has issued major revisions to the Income Tax Return (ITR) forms for Assessment Year 2026‑27, covering the financial year 2025‑26. Under the new rules, salaried taxpayers can now use the simpler ITR‑1 (Sahaj) even if they have long‑term capital gains (LTCG) from listed equity up to ₹1.25 million, provided the gains do not exceed that limit and no capital losses are carried forward. The eligibility of ITR‑1 has also been extended to individuals with income from up to two house properties, with a new field for unrealised rent and mandatory reporting of tenant PAN/Aadhaar or TAN for TDS on rent.

For ITR‑2, the split of capital‑gain reporting before and after 23 July 2024 has been removed, but deduction disclosures have become stricter: donations under section 80G now require a reference number and IFSC, and political donations need the party’s name and PAN. The New Tax Regime is now the default for salaried filers; those wishing to opt for the Old Regime must explicitly select it. The “Others” exemption option under section 10 has been removed. The filing deadline remains 31 July 2026, with penalties for late filing.

A step‑by‑step guide explains the digital filing process: checking eligibility (gross income thresholds of ₹4 million under the New Regime or ₹2.5 million under the Old Regime), gathering required documents (PAN, Aadhaar, Form 16, Form 26AS, bank details, investment proofs), logging into the e‑filing portal, selecting the correct assessment year and ITR form, verifying pre‑filled data, and submitting the return.