Draft Rule 164 of the Income-tax Rules, 2026 prescribes the forms, eligibility conditions, verification requirements and filing modes for returns of income for the tax year commencing 1 April 2026. Individuals who are resident (other than not ordinarily resident) with income from salaries, limited house property, specified other sources, and long-term capital gains under section 198 not exceeding ₹1,25,000 may file Form SAHAJ (ITR-1), subject to several restrictions. Persons with foreign assets or income, unlisted equity holdings, directorships, agricultural income exceeding ₹5,000, total income above ₹50 lakh, deferred tax liabilities, or certain special income categories are ineligible for ITR-1. Individuals or Hindu Undivided Families (HUFs) without business income must file ITR-2, while presumptive taxpayers eligible under section 58 may use Form SUGAM (ITR-4), again subject to similar exclusions. Individuals or HUFs with business or professional income not covered under ITR-4 must file ITR-3. Other entities file ITR-5, companies file ITR-6, and specified trusts or institutions file ITR-7. Returns are generally required to be filed electronically through digital signature, electronic verification code (EVC), or ITR-V, with limited paper filing permitted for super senior citizens (80 years or above) filing ITR-1 or ITR-4. The rule also mandates secure electronic data transmission standards and clarifies that no physical attachments are required with returns.
Extract of Rule No. 164 of Draft Income-tax Rules, 2026
Rule 164
Forms, eligibility, verification etc. in respect of return of income
(1) The return of income required to be furnished under section 263(1), or section 268(1)(a) or section 280 relating to the tax year commencing on the 1st day of April, 2026 shall be in accordance with the provisions of this rule.
(2) Subject to provisions of sub-rule (3), return of income shall be in Form SAHAJ (ITR-1) and be verified in the manner indicated therein in the case of a person being an individual who is a resident other than not ordinarily resident and where the total income includes income chargeable to income-tax, under the head, —
i. “Salaries” or income in the nature of family pension as defined in section 93(1)(d); or
ii. “Income from house property”, where assessee does not own more than two house property and does not have any brought forward loss or loss to be carried forward under the head; or
iii. “Income from other sources”, except winnings from lottery or income from race horses and does not have any loss under the head; or
iv. “Capital gains”, where assessee has only long-term capital gains under section 198 not exceeding ₹ 125000 and does not have any brought forward loss or loss to be carried forward under the head.
(3) A person shall not be eligible to file ITR-1, if he, —
i. has assets (including financial interest in any entity) located outside India;
ii. has signing authority in any account located outside India;
iii. has income from any source outside India;
iv. has income to be apportioned in accordance with provisions of section 10;
v. has claimed deduction under section 93, other than deduction claimed under section 93(1)(d) thereof;
vi. is a director in any company;
vii. has held any unlisted equity share at any time during the tax year;
viii. is assessable for the whole or any part of the income on which tax has been deducted at source in the hands of a person other than the assessee;
ix. has claimed any relief of tax under section 159 or deduction of tax under section 160;
x. has agricultural income, exceeding ₹ 5000 ;
xi. has total income, exceeding fifty lakh rupees;
xii. is a person in whose case tax has been deducted under section 393(3) [Table : Sl No. 5];
xiii. is a person in whose case payment or deduction of tax has been deferred under section 391(2) or section 393(2);
xiv. has any income of the nature on which the tax is determinable as per provisions of Part A of Chapter XIII of the Act.
(4) Return of income shall be in the case of a person being an individual not being an individual to whom sub-rule (2) applies or a Hindu undivided family where the total income does not include income under the head business or profession, be in Form No. ITR-2 and be verified in the manner indicated therein;
(5) Subject to the provisions of sub-rule (6), return of income shall be in Form SUGAM (ITR-4) and be verified in the manner indicated therein in the case of a person being an individual or a Hindu undivided family, who is a resident other than not ordinarily resident, or a firm, other than limited liability partnership firm, which is a resident, ––
(i) deriving income under the head “Profits or gains of business or profession” and such income is computed in accordance with special provisions referred to in section 58 for computation of such income; and
(ii) has, “Capital gains”, if any, where assessee has only long-term capital gains under section 198 not exceeding ₹ 125000.
(6) A person shall not be eligible to file ITR-4, if he, —
i. has assets (including financial interest in any entity) located outside India;
ii. has signing authority in any account located outside India;
iii. has income from any source outside India;
iv. has income to be apportioned in accordance with provisions of section 10;
v. has claimed deduction under section 93, other than deduction claimed under section 93(1)(d) thereof;
vi. is a director in any company;
vii. has held any unlisted equity share at any time during the tax year;
viii. has total income, exceeding fifty lakh rupees;
ix. owns more than two house properties, the income of which is chargeable under the head “Income from house property”;
x. has any brought forward loss or loss to be carried forward under any head of income;
xi. is assessable for the whole or any part of the income on which tax has been deducted at source in the hands of a person other than the assessee;
xii. has claimed any relief of tax under section 159 or deduction of tax under section 160;
xiii. has agricultural income, exceeding ₹ 5000;
xiv. has income of the nature specified in section 17(1)(d) on which tax is payable or deductible under section 391(2) or section 392(3);
xv. has any income of the nature on which the tax is determinable as per provisions of Part A of Chapter XIII of the Act.
(7) Return of income shall be in Form No. ITR-3 and be verified in the manner indicated therein in the case of a person being an individual or a Hindu undivided family other than the individual or Hindu undivided family referred to in sub-rule (2) or sub-rule (4) or sub-rule (5) and having income under the head business or profession.
(8) Return of income shall be in Form No. ITR-5 and be verified in the manner indicated therein in the case of a person not being an individual or a Hindu undivided family or a company or a person to which sub-rule (10) applies.
(9) Return of income shall be in Form No. ITR-6 and be verified in the manner indicated therein in the case of a company not being a company to which sub-rule (10) applies;
(10) Return of income shall be in Form No. ITR-7 and be verified in the manner indicated therein in the case of a person including a company whether or not registered under section 25 of the Companies Act, 1956 (1 of 1956), or section 8 of the Companies Act, 2013 ,required to file a return under section 349 or Schedule VIII, Table :Sl. No. 1[Column (D9f)] or section 263(1)(a)(iv) or section 263(1)(a)(v).
(11) The return of income shall not be accompanied by a statement showing the computation of the tax payable on the basis of the return, or proof of the tax, if any, claimed to have been deducted or collected at source or the advance tax or tax on self-assessment, if any, claimed to have been paid or any document or copy of any account or form or report of audit required to be attached with the return of income under any of the provisions of the Act.
(12) The return of income referred to in sub-rule (1) shall be furnished by a person mentioned in column (2) of the Table below in the manner specified in column (3) thereof:—
Table
| Sl. No. | Person | Manner of furnishing return of income |
| (1) | (2) | (3) |
| 1. | Company | Electronically under digital signature. |
| 2 | Any person whose accounts are required to be audited under section 63 of the Act | (A) Electronically under digital signature;(B) Transmitting the data electronically in the return under electronic verification code. |
| 3. | Any person other than person referred in Sl. No. 1 and 2 | (A) Electronically under digital signature;(B) Transmitting the data electronically in the return under electronic verification code;(C) Transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V. |
| 4. | An individual of the age of 80 years or more at any time during the tax year, who furnishes return in Form No. SAHAJ (ITR-1) or Form No. SUGAM (ITR-4) | (A) Electronically under digital signature;
(B) Transmitting the data electronically in the return under electronic verification code; (C) Transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V; (D) Paper form. |
(13) For the purposes of sub-rule (12), “electronic verification code” means a code generated for the purpose of electronic verification of the person furnishing the return of income as per the data structure and standards specified by Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems).
(14) The Principal Director-General of Income-tax (Systems) or Director General of Income-tax (Systems)] shall specify the procedures, formats and standards for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing the returns in the manners (other than the paper form) specified in column (3) of the Table in sub-rule (12).
(15) Where a return of income relates to the tax year commencing on the 1st day of April, 2025 or any earlier tax year, it shall be furnished in the appropriate form as applicable in that tax year.
