ITR Forms AY 2026-27 Practitioner Advisory: Why FY 2025-26 Returns Are Still 1961 Act Returns Under Section 536 of the Income-tax Act 2025, the Seven-Form Map, and the Ten-Step Filing Season Sprint
Quick Summary
- ITR forms for Assessment Year 2026-27 (FY 2025-26 income) will be filed under the framework of the Income-tax Act 1961, not the Income-tax Act 2025, because Section 536 of the new Act saves FY 2025-26 income entirely under the earlier statute.
- CBDT historically notifies ITR forms in early to mid May. By May 15, 2026, the AY 2026-27 form schema is the first set of ITR forms issued during the Income-tax Act 2025 transition. The fields, schedules, and section references on the forms cite 1961 Act provisions for FY 2025-26 income.
- Practitioners must brief clients that the form is a 1961 Act form even though it is issued in the 2025 Act era. Successor section numbers under the new Act do not appear on the AY 2026-27 ITR forms because the relevant period of income predates April 1, 2026.
- Income-tax Act 2025 sections start appearing only on ITR forms for AY 2027-28 (filed in mid-2027 for FY 2026-27 income). The cleaner separation is: AY 2026-27 = old Act sections; AY 2027-28 = new Act sections.
- Action: review the AY 2026-27 form schema as soon as CBDT notifies it, map each schedule to the 1961 Act section it implements, and prepare a client-facing FAQ explaining the transition. Filing utility (offline Excel / Java utility, online filing platform) should be the latest CBDT-released version.
The Section 536 Anchor: Why AY 2026-27 Returns Are Still 1961 Act Returns
The Income-tax Act 2025 took effect on April 1, 2026. Post 696 walked through the issuance, structure, and the Section 536 saving clause. Post 723 covered the 99-page CBDT FAQ on the transition. Post 732 went deep on the TDS chapter of the FAQ for the Q4 FY 2025-26 statement filing window.
The single most important rule for filing-season practitioners is this: Section 536 of the Income-tax Act 2025 saves the entire computation of FY 2025-26 income under the Income-tax Act 1961. Sub-clause 1 of Section 536 says any liability, refund right, or thing accrued under the 1961 Act before April 1, 2026, continues under the 1961 Act. Sub-clause 4 specifies that income of any previous year ending on or before March 31, 2026, is computed, assessed, charged, and re-assessed entirely under the 1961 Act.
Result: a salaried employee whose financial year 2025-26 ended on March 31, 2026, computes total income under Sections 15, 16, and 17 of the 1961 Act (salary), Sections 22 to 27 (house property), Sections 28 to 44 (business and profession), Sections 45 to 55A (capital gains), Sections 56 to 59 (other sources), and Sections 80C to 80U (deductions). The Income-tax Act 2025 has its own successor chapter for each of these, but those successor provisions apply only from FY 2026-27 onwards.
What CBDT Has Historically Done in May for ITR Form Notification
The CBDT notifies ITR forms by issuing rules under Section 295 of the 1961 Act read with rule 12 of the Income-tax Rules 1962. Historically the Board has issued the ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7 forms together in early May, with the offline Excel and Java utilities following within seven to ten days, and the online filing platform live within the next three weeks.
For Assessment Year 2026-27, the form-notification window is open from early May 2026. Practitioners should track the e-filing portal (incometax.gov.in) and the CBDT press release page for the actual notification. The Notification number under which the AY 2026-27 forms are released should be filed against every client’s working paper for the year, alongside the form selection rationale.
The Seven AY 2026-27 ITR Forms: When Each Applies
| Form | Applicable Taxpayer | Section Reference Block (1961 Act) |
|---|---|---|
| ITR-1 (Sahaj) | Resident individual (not ordinarily resident or non-resident) with total income up to Rs 50 lakh, salary, one house property, agricultural income up to Rs 5,000, other-source income excluding lottery and racehorse winnings. | Sections 15-17 (salary), 22-27 (house property), 56-59 (other sources), 80C-80U (deductions). |
| ITR-2 | Individual or HUF not covered by ITR-1, no business or profession income, includes capital gains. | Sections 45-55A (capital gains), plus the heads above. |
| ITR-3 | Individual or HUF with business or profession income. | Sections 28-44 (business and profession), plus all other heads. |
| ITR-4 (Sugam) | Resident individual, HUF, and firms (other than LLP) with presumptive business income under Section 44AD, 44ADA, or 44AE, total income up to Rs 50 lakh. | Sections 44AD, 44ADA, 44AE. |
| ITR-5 | Firms (including LLPs), Body of Individuals, Association of Persons (other than those filing ITR-7). | Section 184 (firms), Section 4 (charge). |
| ITR-6 | Companies (other than those claiming exemption under Section 11). | Section 115BAA, 115BAB, 115BAC (concessional rates), Sections 32, 80JJAA, 35. |
| ITR-7 | Trusts, political parties, scientific research institutions, news agencies, and other entities claiming exemption under Sections 11, 12, 10(23C), 13A. | Sections 11, 12, 10(23C). |
What Practitioners Should Look For in the AY 2026-27 Form Schema
1. All Schedule References Still Cite 1961 Act Sections
The form schema’s schedule labels (Schedule HP, Schedule BP, Schedule CG, Schedule OS, Schedule VIA, Schedule TDS, Schedule TCS, Schedule AMT, Schedule MAT) all derive from 1961 Act chapter heads. None of the AY 2026-27 schedules will cite Income-tax Act 2025 successor section numbers. If you encounter a draft return-filing software utility that maps a schedule to a 2025 Act section, that is a software-vendor error; flag it.
2. New Tax Regime Section 115BAC and the Old Regime Default Switch
The new tax regime under Section 115BAC of the 1961 Act remains the default for individuals and HUFs from AY 2025-26 onwards. The opt-out to the old regime requires Form 10-IEA filing by the due date for original return. For AY 2026-27, the same default applies: the new regime is the default; opt-out to the old regime is by Form 10-IEA. Section 115BAC of the 1961 Act remains operative for AY 2026-27 because the underlying income (FY 2025-26) is governed by the 1961 Act.
3. Schedule TDS Must Match Form 26AS Under 1961 Act Section Codes
The Schedule TDS in the AY 2026-27 ITR forms requires the TDS-deductor’s TAN, the section under which TDS was deducted (192, 194-series, 195, 206C, etc., all 1961 Act sections), the total tax deducted, and the amount credited to the assessee. This matches the Q4 FY 2025-26 TDS statements (Form 24Q, 26Q, 27Q, 27EQ) which, as Post 732 covered, still cite 1961 Act section codes. The Form 16 and Form 16A issued for FY 2025-26 also cite 1961 Act sections. The whole TDS chain is locked under the 1961 Act for AY 2026-27.
4. Schedule CG: Indexation, Grandfathering, and Section 112A
Capital gains for FY 2025-26 are computed under Sections 45 to 55A of the 1961 Act. The indexation regime under Section 48 (proviso 2), the grandfathering of January 31, 2018, fair market value for listed equity under Section 112A, the long-term and short-term holding-period rules under Section 2(42A), and the cost-of-acquisition rules in Section 49 all apply to FY 2025-26 capital gains. The Schedule CG in the AY 2026-27 ITR forms preserves all these computational fields.
5. Schedule FA (Foreign Assets) and Schedule FSI
The foreign-asset reporting schedule (Schedule FA) and the schedule of foreign-sourced income (Schedule FSI) continue under their existing structure for AY 2026-27 because the underlying disclosure rules in Section 139 of the 1961 Act and rule 12AB of the Income-tax Rules 1962 apply to FY 2025-26 income. The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 continues to govern the disclosure requirement and the penal consequences of non-disclosure.
6. Schedule 80G, 80GGA, and Section 80GGC Continue
Deductions under Chapter VI-A of the 1961 Act apply to AY 2026-27 returns. The five-thousand-rupee aggregate cap on cash donations under Section 80G and Section 80GGA continues. The political-party donation deduction under Section 80GGC for individuals and HUFs continues subject to the 50 percent rate. These are governed by the 1961 Act regime.
7. Verification and E-Verification Modes
The verification of the ITR form continues via Aadhaar OTP, EVC through net banking, EVC through bank account or demat account, or by signing the ITR-V and posting it to the Centralised Processing Centre, Bengaluru. The 30-day verification window from the date of filing remains operative. The Income-tax Act 2025 has not changed the e-verification framework for AY 2026-27 returns.
Return Filing Due Dates for AY 2026-27 (Unchanged)
| Class of Taxpayer | Section | Due Date |
|---|---|---|
| Companies, partnership firms requiring tax audit, individuals carrying on business requiring tax audit, individuals who are working partners in a firm requiring tax audit | Section 139(1) Explanation 2(a) | October 31, 2026 |
| Taxpayer required to furnish report under Section 92E (transfer pricing) | Section 139(1) Explanation 2(aa) | November 30, 2026 |
| Any other person (including salaried individuals, individuals with capital gains, HUFs, AOPs) | Section 139(1) Explanation 2(c) | July 31, 2026 |
| Belated return / revised return | Section 139(4) / 139(5) | December 31, 2026 |
| Updated return (ITR-U) | Section 139(8A) | March 31, 2028 (24 months from end of AY) |
Interest, Late Fee, and Penalty Map (1961 Act, Preserved)
| Default | 1961 Act Section | Charge |
|---|---|---|
| Default in furnishing return on time (Section 139(1)) | Section 234A | 1 percent per month or part of month on unpaid tax from due date until furnishing date |
| Default in payment of advance tax | Section 234B | 1 percent per month from April 1 of AY until completion of assessment / payment |
| Deferment of advance tax instalments | Section 234C | 1 percent per month for the relevant quarter on the shortfall |
| Late-fee for filing after due date | Section 234F | Rs 5,000 if total income exceeds Rs 5 lakh; Rs 1,000 if total income up to Rs 5 lakh; Nil if total income is below the basic exemption limit |
| Penalty for under-reporting or misreporting of income | Section 270A | 50 percent of tax on under-reported income; 200 percent for misreporting |
Practitioner Sprint: Ten-Step AY 2026-27 Filing Season Plan
- Track the CBDT notification: Bookmark the CBDT notifications page and the e-filing portal (incometax.gov.in) for the AY 2026-27 ITR form release notification.
- Download the offline utility: As soon as the offline Excel and Java utilities are released, download the latest version and validate it against a test scenario before bulk-onboarding client returns.
- Update working paper templates: Refresh your firm’s working paper templates to lock the section references to 1961 Act sections for FY 2025-26 income. Add a one-line annotation at the top of each working paper: “AY 2026-27 governed by Income-tax Act 1961 read with Section 536 of the Income-tax Act 2025.”
- Form 16 and Form 16A reconciliation: Match Form 26AS data, AIS data, and Form 16/16A documents to the Schedule TDS in the ITR form. Any mismatch should be reconciled before filing.
- Capital gains data assembly: Collect broker statements for FY 2025-26 (April 1, 2025 to March 31, 2026), reconcile against the AIS capital gains schedule, and assemble the Schedule CG worksheet under Sections 45 to 55A of the 1961 Act.
- Foreign asset and income disclosures: Aggregate Schedule FA and Schedule FSI data points for resident individuals with foreign holdings. The disclosure threshold under Section 139 read with rule 12AB of the 1961 Rules is the operative trigger.
- New regime vs old regime decision: Run the Section 115BAC of the 1961 Act new-regime calculation alongside the old-regime calculation. If the client opts out of the new regime, file Form 10-IEA before the due date for original return.
- Advance tax reconciliation: Verify that all four instalments of advance tax (June 15, September 15, December 15, March 15) were paid by FY 2025-26 close. Compute Section 234B and 234C interest where shortfalls occurred.
- E-verification within 30 days: After filing, ensure the return is e-verified within 30 days via Aadhaar OTP, EVC, or ITR-V post.
- Client-facing FAQ: Send each client a one-page brief explaining that AY 2026-27 returns are filed under the 1961 Act framework because of Section 536 of the Income-tax Act 2025, that filing due dates are unchanged, and that the new Act sections will start applying to AY 2027-28 returns.
FAQs Clients Are Asking
Q1. My financial year ended on March 31, 2026. The Income-tax Act 2025 took effect on April 1, 2026. Which Act applies to my AY 2026-27 return?
The Income-tax Act 1961 applies. Section 536 sub-clause 4 of the Income-tax Act 2025 saves the income of any previous year ending on or before March 31, 2026, under the 1961 Act. Your FY 2025-26 income is therefore computed, assessed, and charged under the 1961 Act provisions. The AY 2026-27 ITR forms reflect this by citing 1961 Act sections in every schedule.
Q2. Will my Form 16 (issued by my employer for FY 2025-26) cite 1961 Act sections or 2025 Act sections?
The Form 16 cites 1961 Act sections. Section 192 of the 1961 Act governs TDS on salary for FY 2025-26 because the underlying salary payment relates to a pre-April 1, 2026 income period saved by Section 536 sub-clause 4. The Form 16 will be issued by the employer by June 15, 2026, citing Sections 17, 192, 80C, 80D, and other 1961 Act sections as applicable.
Q3. The CBDT has not yet notified the AY 2026-27 ITR forms as of mid-May. When can I expect them?
CBDT historically notifies ITR forms between early May and end-May. The current cycle has been delayed by the Income-tax Act 2025 transition workstreams within the Board. Practitioners should monitor incometax.gov.in and the CBDT press release page weekly until the notification appears. The due date for non-audit individual returns remains July 31, 2026, regardless of the notification date.
Q4. Can I file an updated return (ITR-U) under Section 139(8A) for AY 2026-27 in case I miss the due date or want to revise after December 31, 2026?
Yes. Section 139(8A) of the 1961 Act permits an updated return within 24 months from the end of the assessment year, with additional tax of 25 percent if filed within 12 months and 50 percent if filed within 12 to 24 months. For AY 2026-27, the ITR-U window runs until March 31, 2028.
Q5. What if I have already opted out of the Section 115BAC new regime in AY 2025-26 by filing Form 10-IEA? Do I need to file Form 10-IEA again for AY 2026-27?
For business or profession income taxpayers, the Form 10-IEA opt-out, once filed, is a recurring choice until withdrawn. For salaried and other non-business taxpayers, the opt-out can be exercised every year by selecting the old regime in the ITR form itself. Confirm by reading the AY 2026-27 ITR form instructions when CBDT releases them. The Section 115BAC operative law for FY 2025-26 income remains the 1961 Act.
Disclaimer
This advisory summarises the AY 2026-27 ITR filing season framework as the editorial team interprets it pending CBDT notification of the actual forms. The Income-tax Act 2025 and its Section 536 saving clause are the principal anchors of the analysis, but the precise schema, validation rules, and instructions for AY 2026-27 ITR-1 to ITR-7 will be finalised only when CBDT issues the notification under Section 295 of the 1961 Act read with rule 12 of the Income-tax Rules 1962. Practitioners must refer to the CBDT notification and the form instructions on the e-filing portal. Facts of individual cases vary widely. This article is for informational purposes only and does not constitute legal or tax advice.
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