ITR utility updated for AY 2026-27: New reporting field added for gifts and rural agricultural land sale receipts

The Income Tax Department has updated the ITR utility and schema for Assessment Year 2026-27, introducing a key change to how taxpayers can disclose certain non-taxable receipts.

For AY 2026-27, the earlier ‘Other Exempt Income’ field in Schedule EI (Exempt Income) has been removed. In its place, the department has now introduced a new reporting option titled ‘Receipts not in the nature of income.’

The change is expected to bring greater clarity in reporting transactions that are not taxable because they do not qualify as income under the Income Tax Act, 1961.

What has changed in ITR utility?

In previous ITR utilities, taxpayers could disclose various tax-exempt receipts under a broad category called 'Other Exempt Income. Taxpayers also used this field to voluntarily report receipts that were not technically exempt income but were also not taxable.

For AY 2026-27, this general category has been replaced with a more specific reporting field, ‘Receipts not in the nature of income.’

The update provides taxpayers with a dedicated place to disclose receipts that fall outside the scope of taxable income, rather than reporting them under a generic exempt income category.

What are receipts not in nature of income?

The new reporting option is meant for amounts received that are not considered income under the Income Tax Act. Since these receipts are not taxable, they are outside the charging provisions of the law.

Some common examples include:

• Gifts received from specified relatives are exempt under the Income Tax Act.
• Sale proceeds from rural agricultural land, as such land is not treated as a capital asset. This means that its sale does not attract capital gains tax.
• Other capital receipts that do not fall within the definition of taxable income.

These transactions do not create a tax liability. However, taxpayers may still choose to disclose them for greater transparency.

Why is the change significant?

Voluntary disclosure in the ITR often helped explain the source of funds and reduced the possibility of unnecessary tax notices or queries.

With the removal of the generic ‘Other Exempt Income’ field, there was uncertainty about where such receipts could be reported. The newly introduced category addressed this issue by providing a dedicated reporting mechanism.

Chartered Accountant Akhil Pachori wrote in a post on X, “The earlier 'Other Exempt Income' catch-all field has been removed. A new specific reporting option — 'Receipts not in the nature of income' — has now been introduced. The new option provides a structured mechanism to report receipts that are not income in the first place.”

Does this create a new tax liability?

The latest update does not change the tax treatment of these receipts. The new field is only a reporting change in the ITR utility. Receipts that are not taxable under the Income Tax Act continue to remain non-taxable.

As taxpayers are filing returns for AY 2026-27, they should carefully review the updated ITR utility and ensure that any eligible non-taxable receipts are disclosed under the newly introduced ‘Receipts not in the nature of income’ category, wherever applicable.

Disclaimer: This is only for informational and educational purposes. Please consult a qualified tax expert for the latest tax laws and regulations.