‘I-T returns in 2026-27 to be governed by old rules’

New Delhi: Income tax returns to be filed in the upcoming assessment year 2026-27 will continue to be governed by the old Income Tax Act, 1961, even though the new Act will come into effect from April 1, official sources said.

The due date for filing of income tax return for non-audit taxpayers, who are required to fill ITR-1 and ITR-2, for assessment year 2026-27, will be July 31, 2026. For ITR-3 and ITR-4, the due date is August 31.

Union Finance Minister Nirmala Sitharaman announced in the Union Budget earlier this month that the Income-tax Act, 2025, will come into effect from April 1, 2026.

The new Act, which received the assent of the President in August 2025, seeks to replace the dual concept of “Financial Year” and “Assessment Year”, with a unified “Tax Year” framework. The “Tax Year” serves dual purposes: it represents both the period during which income is earned and the reference point for the applicable tax rates and assessment procedures.

According to a source from the Central Board of Direct Taxes (CBDT), the upcoming income tax returns to be filed in 2026-27 will be as per the provisions of the Income Tax Act 1961, which has the concept of Assessment Year.

“In 2026-27, there will be interplay of both the old and the new rules,” said an official requesting anonimity.

While the provisions of the Income Tax Act, 1961, will apply on the ITRs filed in 2026-27, the rules related to tax deductions and advance payments would be as per the rules of the Income-tax Act, 2025.

According to the official, the Income Tax Department is likely to notify the Income Tax Rules, 2026, and the accompanying forms in the first week of March.

The CBDT has released the draft Income Tax Rules and forms for stakeholder consultation. The Income Tax Department has uploaded the draft documents to its official website.

“Stakeholders are encouraged to study the same and make suggestions, which will be compiled and considered for review before final notification,” the Ministry of Finance said in a statement.

The CBDT has invited inputs and suggestions from stakeholders in four categories: simplification of language, reduction of litigation, reduction of compliance burden and identification of redundant/obsolete rules & forms.

A CBDT source claimed that the draft Income-tax Rules and related Forms have been prepared after broad-based consultation to align with the provisions of the Income-tax Act, 2025.

“The notification is likely to come by the end of this month or the first week of March,” the source said.

Rule Shift

The new income tax forms will be simpler and will come with pre-filled information. With linking of PAN, Aadhaar and bank accounts, the majority of information related to taxpayers’ income and transactions is already with the Income Tax Department. “All the available data will come pre-filled,” the source said. 

Highlights - TAX SHIFT

* Due date for filing of I-T return for non-audit taxpayers, who are required to fill ITR-1 and ITR-2, for assessment year 2026-27, will be July 31, 2026

* For ITR-3 and ITR-4, the due date is August 31

* The new Act seeks to replace the dual concept of 'Financial Year' and 'Assessment Year', with a unified 'Tax Year' framework

* While the provisions of Income Tax Act, 1961, will apply on the ITRs filed in 2026-27, the rules related to tax deductions and advance payments would be as per rules of Income-tax Act, 2025

* The CBDT has released the draft Income Tax Rules and forms for stakeholder consultation