Key changes in ITR 1, 2, 3 and 4 forms in FY 25-26: Reporting of LTCG, buyback losses, F&O, intra-day trading & more; what new forms include

The Income Tax Department has introduced several important changes in Income tax Return (ITR) forms for the Financial Year 2025-26 (Assessment Year 2026-27) to simplify return filing and improve the reporting of income and transactions. The revised forms include new disclosure requirements for long-term capital gains (LTCG), buyback losses, Futures & Options (F&O) trading, intraday trading, foreign assets, and high-value transactions, among others.
The updated ITR-1, ITR-2, ITR-3 and ITR-4 forms will apply to income earned during FY 2025-26 and will be used in the current income tax return filing season.

What are the key changes in the new ITR forms?

Chartered accountant Abhishek Soni, CEO & Co- founder, Tax2win, explains that the CBDT has notified revised ITR forms for AY 2026–27 with several important updates aimed at simplifying filing and improving disclosures. Major changes in different forms include:

Also read: 12 key income tax form changes every taxpayer should know: From Form 16 to Form 168


ITR-1 (Sahaj)
Income from up to 2 house properties is now allowed.
LTCG under Section 112A up to Rs 1.25 lakh can be reported.
New fields added for secondary address, mobile number, and email ID.
Overseas pension account holders’ details are no longer required in ITR-1.

ITR-2
More detailed capital gains reporting introduced.
Separate disclosure for buyback losses added.
Additional reporting for foreign assets/income continues.
Secondary contact and address details added.

ITR-3
Separate disclosure required for F&O, intraday, commodity, and currency trading.
Enhanced reporting for business and high-value transactions.
Simplified auditor disclosure requirements.
New secondary address/contact detail fields added.

ITR-4 (Sugam)
Income from up to 2 house properties now permitted.
LTCG under Section 112A up to Rs 1.25 lakh can be reported.
Bank balance disclosure as on March 31, 2026, made mandatory.
Overseas pension account holders’ details are no longer required to enter ITR-4 anymore.

Who is supposed to file the forms that have been changed?

Soni provides details on the revised forms which apply to different taxpayer categories:

ITR-1 (Sahaj)
Resident individuals with income up to ?50 lakh from:
Salary/pension
Up to 2 house properties
Other sources like interest income
Eligible LTCG under Section 112A within prescribed limits.

ITR-2
Individuals/HUFs without business income but having:
Capital gains
Foreign assets
Multiple income sources
Higher complexity disclosures

ITR-3
Business owners, traders, professionals, and taxpayers with business/professional income not covered under presumptive taxation.

ITR-4 (Sugam)
Small businesses, professionals, freelancers, and presumptive income taxpayers under Sections 44AD/44ADA/44AE.

When will the new forms be applicable?

Soni says, the revised ITR forms are applicable for:
Assessment Year (AY) 2026–27
Income earned during FY 2025–26 (April 1, 2025 to March 31, 2026)
The new forms were officially notified on March 31, 2026, and are applicable for returns filed during the current filing season.