Official Update
On April 11, 2026, the Central Board of Direct Taxes (CBDT) issued Notification No. 57/2026 [F. No. 370142/5/2026-TPL] / GSR 262(E), introducing a corrigendum to the earlier notification of Income Tax Return (ITR) Forms 1 and 4. This correction impacts how individual and HUF taxpayers with small incomes file their returns for AY 2026โ27.
If you’re an Indian taxpayer using ITR-1 (Sahaj) or ITR-4 (Sugam), this update is critical. The government has made subtle but significant changes to the form structure, eligibility criteria, and reporting requirementsโespecially concerning income from digital assets, foreign remittances, and revised tax computation methods under the new tax regime.
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Letโs break down what changed, why it matters, and how you should respond when filing your ITR this year.
A corrigendum is an official correction issued to amend errors or omissions in a previously published documentโin this case, the original notification that introduced ITR Forms 1 and 4 for Assessment Year 2026โ27. Unlike a new notification, a corrigendum does not replace the entire form but revises specific clauses, fields, or instructions.
Source: incometaxindia.gov.in
ITR-1 (Sahaj): Designed for resident individuals with total income up to โน50 lakh, earning only from salary, one house property, and other sources (excluding lottery and racehorse income).
ITR-4 (Sugam): For individuals, HUFs, and firms (other than LLPs) with presumptive income under Sections 44AD, 44ADA, or 44AE, and total income up to โน75 lakh.
Source: Income Tax Department โ Forms
Key Changes Introduced by Notification No. 57/2026
The corrigendum addresses several inconsistencies and gaps in the original notification dated March 15, 2026. Here are the most important updates:
1. Clarification on Digital Asset Reporting (Crypto & Airdrops)
Previously, ITR-1 and ITR-4 did not explicitly require disclosure of income from virtual digital assets (VDAs), including cryptocurrency, NFTs, and airdrops. The corrigendum now mandates that any gains from such assets must be reported under โIncome from Other Sourcesโ if they fall within the scope of Section 115BBH.
Key Statistics
Example:
Rahul, a salaried employee in Mumbai, earned โน1.2 lakh from selling Bitcoin in FY 2025โ26. Under the new corrigendum, he must report this amount in ITR-1, even though itโs not salary or house property income. Failure to do so may attract scrutiny under Section 271F.
2. Revised Eligibility Criteria for ITR-4
The original notification allowed taxpayers with foreign income up to โน5 lakh to use ITR-4. The corrigendum revises this: now, any foreign incomeโregardless of amountโdisqualifies a taxpayer from using ITR-4. This aligns with CBDTโs push to ensure cross-border income is reported only through ITR-2 or ITR-3.
Important Warning
If you have received any foreign remittanceโeven as a gift from a relativeโabove โน50,000 in FY 2025โ26, you are not eligible for ITR-4. You must file ITR-2 or ITR-3 instead.
3. Updated Computation of Tax Under New Regime (Section 115BAC)
The corrigendum introduces a revised tax computation table for individuals opting for the new tax regime. The original form had a miscalculation in the โน12โ15 lakh slab, where the tax was shown as โน1,20,000 instead of โน1,25,000 (including cess).
The corrected slab-wise tax (including 4% health and education cess) is now:
| Income Slab (โน) | Tax Rate | Tax Payable (โน) |
|---|---|---|
| Up to 3,00,000 | Nil | 0 |
| 3,00,001 โ 6,00,000 | 5% | 15,000 |
| 6,00,001 โ 9,00,000 | 10% | 45,000 |
| 9,00,001 โ 12,00,000 | 15% | 90,000 |
| 12,00,001 โ 15,00,000 | 20% | 1,25,000 |
| Above 15,00,000 | 30% | As per slab |
Calculation Example:
Priya has a total income of โน13.5 lakh and opts for the new regime. Her tax calculation is:
– Up to โน3 lakh: โน0
– โน3โ6 lakh: 5% of โน3 lakh = โน15,000
– โน6โ9 lakh: 10% of โน3 lakh = โน30,000
– โน9โ12 lakh: 15% of โน3 lakh = โน45,000
– โน12โ13.5 lakh: 20% of โน1.5 lakh = โน30,000
– Total = โน1,20,000 + 4% cess (โน4,800) = โน1,24,800 (rounded to โน1,25,000 in form)
4. Mandatory Disclosure of Bank Account Details
The corrigendum now requires all taxpayers filing ITR-1 or ITR-4 to provide details of at least one active bank account where refunds (if any) can be credited. Previously, this was optional for small refunds below โน10,000.
โThis change is aimed at reducing refund delays and curbing fraudulent claims. The CBDT is tightening data validation between banks and the ITR portal. Taxpayers must ensure their bank account is Aadhaar-seeded and pre-validated on the e-Filing portal.โ
Tax Consultant & Founder
20+ Years Experience
Who Is Affected by This Corrigendum?
The changes primarily impact:
- Salaried individuals with side income from crypto, freelancing, or rental properties
- Small business owners using presumptive taxation under Section 44AD
- NRIs or resident taxpayers who received foreign gifts or remittances
- Taxpayers claiming refunds who previously left bank details blank
✨ Key Highlights
- ITR-1 and ITR-4 now require VDA income disclosure
- Foreign income disqualifies use of ITR-4
- Tax computation corrected for โน12โ15 lakh slab
- Bank account details are now mandatory
- Effective immediately for AY 2026โ27 filings
Step-by-Step Guide: How to File ITR-1 or ITR-4 After the Corrigendum
Step-by-Step Process
Follow these steps to ensure your ITR is compliant with Notification No. 57/2026:
1. Verify Eligibility
Check if you still qualify for ITR-1 or ITR-4. If you have foreign income, capital gains, or income from more than one house property, switch to ITR-2 or ITR-3.
2. Gather All Income Documents
Collect Form 16, bank statements, crypto transaction logs (if any), and foreign remittance proofs. Even small VDA gains must be reported.
3. Pre-validate Bank Account
Log in to e-Filing Portal โ Profile Settings โ Bank Accounts โ Add and validate your account.
4. Use Updated ITR Forms
Download the latest ITR-1 or ITR-4 from the official portal. The forms now include new fields for VDA and foreign income disclosure.
5. Calculate Tax Correctly
Use the revised tax slab for the new regime. Double-check calculations, especially for incomes between โน12โ15 lakh.
6. File and Verify
Upload the return and complete e-Verification via Aadhaar OTP, net banking, or EVC. Keep a copy for records.
Common Mistakes to Avoid
Critical Error Alert
Do not ignore small crypto gains. Even โน5,000 from an airdrop is taxable under Section 115BBH and must be disclosed. Non-disclosure can lead to a notice under Section 143(1) or penalty under Section 271F.
Other common pitfalls:
- Using ITR-4 with foreign income: This will result in form rejection.
- Incorrect tax calculation: Using old slab rates may lead to underpayment and interest under Section 234B.
- Missing bank details: Refunds will be delayed or rejected.
- Filing before form update: Always download the latest version from incometaxindia.gov.in.
Impact on Refunds and Processing Time
With mandatory bank account validation and enhanced data matching, the CBDT expects faster refund processingโdown from 6โ8 months to 3โ4 months in most cases. However, returns with discrepancies (e.g., unreported VDA income) may face extended scrutiny.
โThe corrigendum is a step toward real-time tax compliance. By mandating digital asset reporting and bank validation, the government is building a more transparent and efficient tax ecosystem.โ
Senior Tax Analyst, NIPFP
Ex-CBDT Advisor
What If You Already Filed Before April 11?
If you filed ITR-1 or ITR-4 before the corrigendum and missed reporting VDA income or provided incorrect bank details, you have two options:
- File a revised return: Use the updated form to correct errors. This is allowed anytime before the end of the assessment year (March 31, 2027).
- Respond to notice: If the department raises a query, provide supporting documents and rectify the return.
Pro Tip
Revised returns filed within 3 months of the original filing date are processed faster and less likely to attract scrutiny.
Frequently Asked Questions (FAQs)
Q1: I earned โน8,000 from staking Ethereum. Do I need to report it in ITR-1?
Yes. Under Section 115BBH, all income from virtual digital assetsโincluding staking, airdrops, and miningโis taxable at 30%. You must report it under โIncome from Other Sourcesโ in ITR-1, even if the amount is small.
Q2: My client paid me $500 via PayPal for freelance work. Can I still use ITR-4?
No. Any foreign income, regardless of amount, disqualifies you from using ITR-4. You must file ITR-3 and report the income under โProfits and Gains from Business or Profession.โ
Q3: I donโt have a bank account. Can I still file ITR-1?
No. As per the corrigendum, providing at least one active bank account is mandatory. If you donโt have one, open a basic savings account (BSA) with any bank and link it to your PAN.
Q4: What happens if I use the wrong tax slab in ITR-1?
The system may auto-calculate the correct tax, but discrepancies can trigger a notice under Section 143(1). Always verify your tax computation manually or use the official tax calculator on the e-Filing portal.
Q5: Can I revise my return after the corrigendum if I already filed?
Yes. You can revise your ITR-1 or ITR-4 anytime before March 31, 2027, using the updated form. Ensure all corrections align with Notification No. 57/2026.
Q6: Is the corrigendum applicable to AY 2025โ26 or AY 2026โ27?
It applies only to Assessment Year 2026โ27 (financial year 2025โ26). Returns for AY 2025โ26 (filed in 2025) are not affected.
Final Thoughts
The corrigendum to ITR Forms 1 and 4 is more than a technical correctionโit reflects the governmentโs broader strategy to enhance transparency, curb tax evasion, and streamline refund processing. With digital assets becoming mainstream and cross-border transactions increasing, the CBDT is ensuring that even small taxpayers contribute to a cleaner tax system.
As a taxpayer, your best defense is awareness and compliance. Download the updated forms, report all income accurately, and validate your bank details early. The July 31, 2026, deadline for ITR filing is fast approachingโdonโt let a small oversight lead to a big problem.
About This Article
This article has been prepared with reference to official government sources and is intended for informational purposes only. For the most current information, please refer to the respective government portals.
Key Portals
Last Updated: April 30, 2026
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