Archive · 19 Jul 2026
ITR-1 Simplified, ITR-2 Complex for FY26 Filings
The income-tax return filing process in India has seen some changes for the fiscal year 2025-26.
The simpler form, ITR-1, has been made even easier for salaried individuals with straightforward incomes.
This form now includes more people, like those with small capital gains or income from two house properties.
The government has also made it easier by automatically filling in some details, which saves time.
Refunds are now processed faster too.
On the other hand, the more complex form, ITR-2, has become harder for those with foreign assets, investments in crypto, or high incomes.
These people now have to provide more detailed information and face stricter rules.
The goal is to make filing taxes easier for most people while ensuring those with complex financial situations follow all the necessary rules.
ITR-1 eligibility expanded to include salaried filers with long-term capital gains up to ₹1.25 lakh and income from up to two house properties.
Pre-fill features in ITR-1 reduce data entry time by automatically populating salary, TDS, interest, dividends, and capital gains.
Refund cycles for ITR-1 filers have shortened to under three weeks for AY26.
ITR-2 has become more complex with expanded reporting requirements for foreign assets, virtual digital assets, and assets and liabilities for incomes above ₹50 lakh.
Due dates for filing have been staggered to avoid a single-day rush, with July 31 for salaried/ITR-1 and ITR-2 filers, and August 31 for ITR-3/ITR-4 filers.
- Who
- Individual taxpayers in India, including salaried employees, investors, and those with foreign assets or virtual digital assets.
- What
- Changes in the income-tax return forms ITR-1 and ITR-2 for FY26 (AY27) filings.
- When
- The changes are effective for the fiscal year 2025-26 (Assessment Year 2026-27).
- Where
- India.
- Why
- To simplify the tax filing process for the majority of taxpayers while ensuring compliance with complex tax policies for those with foreign assets or virtual digital assets.
Simplification of ITR-1
Complexity of ITR-2
Eligibility and Scope
Simplification of ITR-1
ITR-1 eligibility expanded to include salaried filers with long-term capital gains up to ₹1.25 lakh and income from up to two house properties.
Complexity of ITR-2
ITR-2 now requires detailed reporting of foreign assets, virtual digital assets, and assets and liabilities for incomes above ₹50 lakh.
Pre-fill and Data Entry
Simplification of ITR-1
ITR-1 benefits from pre-fill features, reducing data entry time and effort.
Complexity of ITR-2
ITR-2 requires manual entry and detailed disclosure of complex financial transactions.
Refund and Verification
Simplification of ITR-1
ITR-1 filers experience faster refund cycles and easier verification processes.
Complexity of ITR-2
ITR-2 filers face more stringent verification and potential delays due to complex reporting requirements.
- ITR-1 Eligibility
- Salaried filers with long-term capital gains up to ₹1.25 lakh and income from up to two house properties.
- Pre-fill Features
- Form 26AS, AIS, and TIS populate salary, TDS, savings-account interest, dividends, and brokerage-reported capital gains.
- Refund Cycle
- Average time from e-verification to refund credit fell to under three weeks for ITR-1 filers in AY26.
- Foreign Assets Reporting
- ITR-2 requires disclosure of foreign assets, ESOPs from parent companies listed abroad, and offshore mutual funds.
- Virtual Digital Assets
- ITR-2 mandates line-by-line disclosure of crypto transactions with a 30% tax on gains.
- Assets and Liabilities
- Schedule AL kicks in for incomes above ₹50 lakh, requiring declaration of assets and liabilities.
- Due Dates
- Staggered due dates: July 31 for salaried/ITR-1 and ITR-2 filers, August 31 for ITR-3/ITR-4 filers.