Filing season 2026: What taxpayers need to watch

India now has a new Income Tax Act. The Income Tax Act, 2025 came into force on April 1, 2026, replacing the 1961 law for income earned from that date onwards. But the return you file this July is still for income earned between April 2025 and March 2026. So that return continues to be governed by the old law.

That is why this filing season may confuse many taxpayers. Your TDS for the current year may already be getting deducted under the new law showing as Tax Year 2026-27, whereas the ITR you file now for AY 2026–27. In simple terms, two systems are operating back-to-back, even though they apply to different income periods.

The first practical question is: which ITR form should you use? The CBDT has widened eligibility for simpler forms. A resident individual with income up to Rs 50 lakh can now use ITR-1 even with income from up to two house properties. Presumptive taxpayers under sections 44AD, 44ADA and 44AE can similarly continue with ITR-4, subject to conditions. At the same time, some taxpayers may have to move out of the simpler forms. Those with foreign retirement benefit account disclosures under section 89A, for instance, may need to file ITR-2 or ITR-3, as applicable.

The forms also ask for more detail than before. Taxpayers can now provide two addresses and two mobile numbers. Donation reporting has become tighter: for Section 80G claims, payment reference details such as UPI, cheque or NEFT/RTGS number and bank IFSC are now required. For political contributions under Section 80GGC, the party’s name and PAN must also be disclosed. Even ITR-1 and ITR-4 now specifically provide for unrealised rent.

One choice deserves special attention: the tax regime. The new regime is the default. Anyone wanting deductions such as Section 80C, Section 80D, HRA or housing-loan benefits must consciously opt for the old regime where eligible. Salaried taxpayers generally have year-to-year flexibility, but business and professional taxpayers face tighter switching rules. A casual click can become an expensive mistake.

Another useful caution: do not treat prefilled data as final truth. Before filing, reconcile Form 16, Form 26AS, AIS and your own records, especially for bank interest, capital gains and donations. Small mismatches often lead to avoidable notices later.

Taxpayers with foreign assets or foreign income should be especially careful. Details in Schedule FA, foreign bank accounts, overseas shares, RSUs, retirement accounts and foreign-source income must be reported correctly in the appropriate ITR form. Where foreign tax credit is claimed, Form 67 and supporting records such as tax deduction certificates, proof of payment, foreign tax returns and computation workings become crucial. In cross-border taxation, documentation is often the deciding factor. These records should be preserved carefully for at least six years, and preferably longer where foreign assets or complex claims are involved.

There are also practical changes in the reporting formats. F&O traders, for example, will notice more focused disclosure requirements in the business return. Due dates too need attention: July 31 for many non-business taxpayers, August 31 for certain non-audit business and professional cases, and later dates where audit or transfer pricing applies.

The message is simple. The new law has arrived, but this July’s return still belongs to the old one. Taxpayers who understand that distinction, choose the correct form, verify disclosures carefully and filing on time can avoid most of the confusion this transition year is likely to create.