Notification No. 45/2026-Income Tax Dated: 30th March, 2026 amends the Income-tax Rules, 1962 and introduces updated return forms for Assessment Year (AY) 2026–27. These amendments are issued under the powers conferred by section 295 read with section 139 of the Income-tax Act, 1961, and come into effect from 31 March 2026, applying to returns filed for AY 2026–27.
A key amendment is made to Rule 12. The reference year is updated from “2025” to “2026.” Further, eligibility-related wording is modified to allow reporting of “two house properties” instead of “one house property” in relevant clauses.
The notification substitutes the existing forms in Appendix II with revised ITR-1 (Sahaj) and ITR-4 (Sugam) forms.
Page Contents
ITR-1 (Sahaj)
ITR-1 is prescribed for individuals who are residents (other than not ordinarily resident) with total income up to ₹50 lakh. Eligible income sources include salary/pension, income from up to two house properties, income from other sources such as interest, long-term capital gains under section 112A up to ₹1.25 lakh, and agricultural income up to ₹5,000.
However, it excludes individuals who are directors in a company, have invested in unlisted equity shares, have deferred tax on ESOPs, or hold foreign assets or financial interests outside India.
The form requires detailed personal information, filing status (including sections under which the return is filed), employment nature, and whether the taxpayer opts out of the new tax regime. It also captures cases where returns are filed despite not being otherwise required, based on specified conditions such as high expenditure on foreign travel or electricity consumption.
Income reporting sections include salary computation, income from house property (with provisions for co-ownership and tenant details), and income from other sources. Deductions under various sections are to be reported, followed by computation of total income and tax liability, including surcharge, cess, interest, and fees.
The form also requires disclosure of all active bank accounts, advance tax and self-assessment tax payments, and TDS/TCS details. A verification section mandates declaration of correctness of information.
ITR-4 (Sugam)
ITR-4 applies to resident individuals, Hindu Undivided Families (HUFs), and firms (other than LLPs) with total income up to ₹50 lakh. It is meant for those having income from business or profession computed under presumptive taxation schemes (sections 44AD, 44ADA, or 44AE), along with eligible salary, house property, and other income, and long-term capital gains under section 112A up to ₹1.25 lakh.
It excludes persons who are company directors, hold unlisted shares, have deferred ESOP taxation, have foreign assets, or have agricultural income exceeding ₹5,000.
The form captures general information such as PAN, Aadhaar, status (individual/HUF/firm), contact details, and filing particulars. It includes specific disclosures regarding selection of the old or new tax regime, including details of Form 10-IEA where applicable.
It also includes reporting requirements for cases where returns are filed under specified conditions despite not being mandatory, such as high-value deposits, foreign travel expenditure, or electricity consumption.
Income reporting includes presumptive business income calculations under relevant sections, salary income, income from house property, and other sources. Detailed schedules are provided for business receipts, deemed income percentages, and financial particulars such as capital, liabilities, and assets.
The form further provides for deduction reporting, computation of total income, tax liability, interest, and fees. It also includes schedules for advance tax, TDS, TCS, and bank account details, along with verification requirements.
Overall Effect
The notification updates procedural and structural aspects of return filing for AY 2026–27, introduces revised eligibility conditions, expands reporting to include two house properties, and updates compliance and disclosure requirements within ITR-1 and ITR-4 forms.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 45/2026-Income Tax | Dated: 30th March, 2026
G.S.R. 226(E).— In exercise of the powers conferred by section 139 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend Income-tax Rules, 1962, namely:-
1. 1. (1) These rules may be called the Income-tax (Second Amendment) Rules, 2026.
(2) They shall come into force with effect from the 31st day of march, 2026 and shall apply in respect of returns filed for A.Y. 2026-27.
2. In the Income-tax Rules, 1962 (hereinafter referred to as the said rules),––
(a) in rule 12, ––
(i) in sub-rule (1),––
A. in the opening portion, for the figure “2025”, the figure “2026” shall be substituted;
B. in clause (a), in sub-clause (ii), for the words “one house property”, the words “two house properties” shall be substituted;
C. in clause (ca), in proviso, in item (IG), for the words “one house property”, the words “two house properties” shall be substituted;
(ii) in sub-rule (5), for the figure “2024”, the figure “2025” shall be substituted.
3. In the said rules, in Appendix– II,
(a) for FORM ITR-1, the following FORM shall be substituted, namely: –––
Form ITR-1 SAHAJ
[For individuals being a resident (other than not ordinarily resident) having total income upto Rs.50 lakh and having Income from Salaries, two house properties, other sources (Interest etc.), long-term capital gains under section 112A up to Rs. 1.25 lakh, and agricultural income up to Rs.5 thousand]
[Not for an individual who is either Director in a company or has invested in unlisted equity shares or in cases where TDS has been deducted u/s 194N or if income-tax is deferred on ESOP or has assets (including financial interest in any entity) located outside India]
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(b) for FORM ITR-4, the following FORM shall be substituted, namely: ––
Form ITR-4 SUGAM
[For Individuals, HUFs and Firms (other than LLP) being a resident having total income upto Rs.50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE, and having long-term capital gains under section 112A upto Rs. 1.25 lakh]
[Not for an individual who is either Director in a company or has invested in unlisted equity shares or if income-tax is deferred on ESOP or has agricultural income more than Rs. 5000 or has assets (including financial interest in any entity) located outside India)]
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[No. 45 /2026/F. No. 370142/5/2026-TPL]
PRADEEP SHARMA, Dy. Secy., Tax Policy and Legislation
Note:- The Income-tax Rules, 1962 rules were published in the Gazette of India, Extraordinary, Par II, Section 3, Sub-section (ii) vide notification number S.O. 969 (E), dated the 26th March, 1962 and last amended vide notification GSR 158(E), dated the 05th March, 2026.
