Tax Season Update: New ITR-1 & ITR-4 Utilities for AY 2026-27

The Income Tax Department has officially released the offline Excel utilities for ITR-1 (Sahaj) and ITR-4 (Sugam). If you are preparing to file for income earned between April 2025 and March 2026, here are the critical changes you need to know:

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Major Highlights & Changes

• Dual House Property Eligibility: In a major relief for small homeowners, individuals with income from up to two house properties can now file using ITR-1 or ITR-4. Previously, these forms were restricted to single-property owners.
• Simplified Capital Gains: You can now report Long-Term Capital Gains (LTCG) under Section 112A (listed equity/mutual funds) within these forms, provided the total gains are below ₹1.25 lakh.
• Mandatory Bank Disclosures: For those filing ITR-4, disclosing your closing bank balance as of March 31, 2026, is now a mandatory requirement.
• Political Donation Tracking: To claim deductions for donations to political parties, you must now provide the specific Transaction Reference Number and IFSC code of the recipient bank.

The Default Tax Regime

The New Tax Regime remains the default setting for all taxpayers.

• ITR-1: You can opt for the Old Regime directly within the form.
• ITR-4: Business/Professional filers must file Form 10-IEA first and provide the acknowledgment number in the utility to opt out of the default regime.

Which Form Should You Choose?

Feature	ITR-1 (Sahaj)	ITR-4 (Sugam)
Ideal For	Salaried individuals & Pensioners	Small businesses & Professionals
Income Cap	Total income up to ₹50 Lakh	Total income up to ₹50 Lakh
Income Source	Salary, 1-2 House Properties, Interest	Presumptive Income (Sec 44AD/ADA)
Key Addition	Supports 2 House Properties	Requires Year-end Bank Balance

Next Steps for Taxpayers

1. Download: Access the latest utilities from the ‘Downloads’ section of the e-filing portal.
2. Verify AIS/TIS: Ensure your reported income matches your Annual Information Statement to avoid automated notices.
3. Check Deadlines: Ensure your return is filed before the July 31st deadline to avoid late fees under Section 234I.

Note: If your total income exceeds ₹50 Lakh, or if you have income from more than two houses or capital gains exceeding the threshold, you must use ITR-2 or ITR-3.