Salaried taxpayers: Key checks to make in 2026 for your next ITR — expert explains changes under Income Tax Act 2025
From 1 April 2026, the Income-tax Act, 2025, has come into effect. This means the new law will apply to the income-tax return (ITR) you file in 2027 for tax year 2026-27.
While income-tax rates remain unchanged, several section references, forms, and reporting requirements have changed. Salaried taxpayers need to understand these changes when checking their salary and tax records this year and filing their next ITR.
What section changes should salaried taxpayers know?
Isha Sekhri, Founder, Isha Sekhri & Associates LLP, has listed the key changes in section references from the Income-tax Act, 1961, to the Income-tax Act, 2025:
| Subject | Old section | New section | Key change |
| Salary: meaning, perquisites | 17(1), 17(2) | 16, 17 | Renumbered |
| Charging section for salary | 15 | 15 | No change |
| Profits in lieu of salary | 18 | 18 | No change |
| Deductions from salary | 16 | 19 | Standard deduction: ₹75,000 / ₹50,000 |
| Gratuity, leave encashment, commuted pension | 10 | 19(1) table | Deductions, not exclusions |
| HRA | 10(13A) | Schedule III | Rule 279 |
| LTA | 10(5) | Schedule III | — |
| Default regime | 115BAC | 202 | Renumbered |
| Rebate | 87A | 156 | ₹60,000 up to ₹12 lakh |
| 80C, 80D | 80C, 80D | 123, 126 | Section 123 not allowed in default regime |
| Additional NPS deduction | 80CCD(1B) | 124(3) | ₹50,000 |
| TDS: salary, other TDS, TCS | 192, 194-series, 206C | 392, 393, 394 | Renumbered |
| Capital gains | 111A, 112, 112A | 196, 197, 198 | Renumbered |
| Return of income | 139 | 263 | Renumbered |
What should salaried taxpayers check this year?
Sekhri has suggested that taxpayers should check the following points:
- Payroll TDS: Confirm the tax regime selected, with the default regime applying unless Form 122 is submitted. Check that old-regime items are not given under the default regime.
- HRA: Check the city classification and landlord details in Form 124. Keep the rent agreement and rent receipts on record.
- Declarations: Compare Form 124 with the documents submitted as proof. Check NPS, health insurance, and the ₹1.5 lakh deduction under Section 123.
- Tax credits: Reconcile Form 168 (the new Form 26AS) and AIS with your payslips. Also verify interest, dividend, and broker-provided capital-gains statements.
- Job changes: Ensure that salary and TDS from your previous employer have been correctly reported to your new employer.
Sekhri said taxpayers should write to the payroll team early if there are discrepancies so that TDS can be corrected in time. For credit gaps, ask the employer to file a Form 138 correction. The July-September TDS return is due by 31 October.
Taxpayers should also use AIS feedback to flag incorrect entries, pay advance tax on income on which no TDS has been deducted, and retain supporting documents, she added.
Which tax forms have changed under the Income Tax Act 2025?
Sekhri said the key change is in the numbering of tax forms, with Form 16 being replaced by Form 130, which you receive from your employer.
| Old form | New form | Purpose |
| Form 16 | Form 130 | TDS certificate for salary income, issued by the employer to the employee |
| Form 12BB / 12BA | Form 124 / 123 | Form 124: employee’s declaration of claims such as HRA, deductions and tax-saving investments; Form 123: details of perquisites provided by the employer |
| Regime declaration | Form 122 | Declaration of the tax regime chosen by the taxpayer for TDS purposes |
| Form 26AS | Form 168 | Annual tax-credit statement, showing TDS/TCS and other tax-related information |
| Forms 24Q / 26Q / 27Q | Forms 138 / 140 / 144 | TDS statements/returns: Form 138 for salary TDS; Form 140 for TDS other than salary; Form 144 for TDS on payments to non-residents |
| Forms 15G / 15H | Form 121 | Declaration for non-deduction of TDS where the taxpayer meets the prescribed conditions |
However, it is not yet clear whether the new ITR forms will retain the existing ITR-1 and ITR-2 names and formats. “Return forms for tax year 2026-27 are not yet notified,” Sekhri said.
Do section references need to be correct in their salary slips?
Yes.
Sekhri said TDS returns must carry the new Section 392/393 codes, as incorrect codes could result in problems with tax-credit matching in Form 168. Form 130 should also reflect the new 2025 Act references.
Old references such as Section 80C appearing on payslips are largely cosmetic, Sekhri said, but taxpayers should still ask their employer to correct the regime flag, the section applicable to each deduction, HRA city and landlord details, perquisite values in Form 123, and previous-employer information.
What will change when salaried taxpayers file their ITR in 2027?
Sekhri said taxpayers should keep the following points in mind:
- For filing ITR under Section 263, the due date of 31 July stays the same.
- Section 202 is the default, and non-business filers can switch regimes each year in the ITR.
- Gratuity and leave encashment are reported through the Section 19 table.
- Reconcile Form 130 with Form 168 and AIS, and report capital gains under 196/197/198.
Taxpayers should prepare this year’s tax computation using the 2025 Act structure, compare the two tax regimes before the March payroll cut-off, and keep proofs, copies of Forms 122 and 124, and AIS snapshots together.
Brought-forward losses will continue with their existing character and without a fresh carry-forward period under the new IT Act. Taxpayers should take the opening balances from the carry-forward schedule of their AY 2026-27 return and retain the computation and acknowledgement, Sekhri added.
Disclaimer: This is only for informational and educational purposes. Please consult a qualified expert for the latest laws and regulations.
