ITR Filing FY2025-26: Season Opens — ITR-1 and ITR-2 Changes, AIS Pre-Fill, and the New Regime Default

The Income Tax Department opens the utility for filing returns for Assessment Year 2026-27 (covering Financial Year 2025-26) in late April, with the e-filing portal's ITR-1 and ITR-4 Excel utilities typically going live in the final week of the month. For the roughly 8.2 crore taxpayers who filed last year, three things are meaningfully different this season — and two of them are silent traps if you do not know to look.

Who Files Which Form This Year

• ITR-1 (Sahaj): Resident individuals with total income up to Rs 50 lakh from salary, one house property, other sources (interest, dividend), and LTCG up to Rs 1.25 lakh under Section 112A. The LTCG inclusion in ITR-1 is new from last year and now fully bedded down.
• ITR-2: Individuals/HUFs without business income, with capital gains, multiple properties, or foreign assets.
• ITR-3: Income from business/profession.
• ITR-4 (Sugam): Presumptive income under 44AD/44ADA/44AE, total income up to Rs 50 lakh.

Non-audit due date: 31 July 2026. Audit cases: 31 October. Transfer pricing: 30 November. Compute your projected tax liability in our Income Tax Calculator before you open the utility.

Change 1: New Regime Is the Default — And Pre-Filled

The e-filing portal now opens every new ITR session with the New Regime pre-selected. For salaried filers who benefit from the Old Regime (those with HRA, home loan interest, high 80C, NPS top-up), you must explicitly switch at the top of the form. Miss it, and your pre-filled TDS numbers will reconcile against New Regime slabs — often producing a false demand notice two months later.

If you are unsure which regime wins for your specific salary and deduction profile, run the numbers through both toggles in the Take Home Salary Calculator India before you start filing. The break-even generally sits near Rs 4 lakh of deductions for a Rs 15 lakh salary.

Change 2: AIS and TIS Reconciliation Is Stricter

The Annual Information Statement (AIS) and its Taxpayer Information Summary (TIS) now populate with data from 27 reporting entities, up from 21 last year. The new feeds include:

• UPI merchant receipts above Rs 10 lakh aggregate
• Foreign remittances under LRS above $10,000
• Corporate bond redemptions
• Virtual Digital Asset (VDA) exchanges

Every single entry in AIS pre-populates into your ITR. If you do not accept/reject/modify with feedback each line, the return picks up whatever AIS says — including interest credits you may dispute. Open the AIS section before starting the ITR, reconcile line-by-line against your own bank and broker statements, and submit feedback for any mismatches. The 30-day assessment cycle now treats AIS as the primary source of truth.

Change 3: Capital Gains Reporting Split

Following the July 2024 Budget's mid-year change in LTCG tax treatment, AY2026-27 is the first full year where transactions split neatly across the regime:

• Before 23 July 2024: 10% LTCG on listed equity over Rs 1 lakh, with indexation on property.
• On/after 23 July 2024: 12.5% LTCG on listed equity over Rs 1.25 lakh, indexation removed on property.

The ITR schedule now has two separate CG tables — one for each period. Mis-slot a sale and the tax difference can be 2.5 percentage points plus indexation math. For anyone who sold shares or property in FY2025-26, reconcile broker reports and sale deeds to the exact date before you file.

The Section 87A Rebate Quirk

Under the New Regime for FY2025-26, Section 87A rebate extends the tax-free ceiling to Rs 12 lakh (Rs 12.75 lakh with the Rs 75,000 standard deduction). But the rebate is lost entirely the moment taxable income crosses the threshold — creating a steep marginal rate where the first rupee above Rs 12 lakh triggers Rs 60,000+ of tax. If your projected income is between Rs 12 lakh and Rs 12.75 lakh, a last-minute 80CCD(2) employer NPS contribution or salary structuring can keep you under the cliff.

Common 2026 Filing Mistakes We Are Already Seeing

1. Ignoring Form 26AS vs AIS mismatches. If your employer's TDS certificate shows Rs 2.1 lakh but 26AS shows Rs 2.08 lakh, file based on 26AS, not Form 16.
2. Claiming HRA without bank-trail rent. For rent above Rs 1 lakh/year, PAN of the landlord is mandatory. Many cash-rent cases will face scrutiny this year — the HRA Exemption Calculator helps you compute the defensible number.
3. Missing foreign asset disclosure in Schedule FA. Even a US brokerage account with $500 must be disclosed. Penalty for non-disclosure is Rs 10 lakh flat.
4. Forgetting capital gains on gold/silver ETFs. Now taxed as LTCG at 12.5% without indexation if held over 24 months.

Refund Processing Timeline

Returns filed in the first two weeks of May historically see refunds credited within 10–14 days, assuming e-verification is completed within 30 days via Aadhaar OTP. By late July, processing slips to 30–45 days as volume peaks. If your refund is over Rs 50,000, expect an additional 7–10 days for high-value review. File early if cash flow matters.

What to Gather Before You Log In

• Form 16 from each employer (including any change of job mid-year)
• AIS and TIS downloaded and reconciled
• Form 26AS
• Capital gains statements from all brokers (Zerodha, Groww, ICICI Direct etc.)
• Interest certificates from all banks (TDS-based Rs 40K threshold means many are now included)
• Home loan provisional certificate (interest and principal split)
• Insurance premium receipts, ELSS purchase confirmations, NPS statement

Verdict: The AY2026-27 filing cycle is not harder, but it is less forgiving. Switch regime deliberately, reconcile AIS line by line, split capital gains by the 23 July date, and file before volume stress in late July. Run both regime scenarios through the Income Tax Calculator and double-check your salary breakdown in the CTC Salary Calculator so your Form 16 and your ITR tell the same story.