ITR Filing Challenges 2026: AIS, Property, and Foreign Asset Errors
Taxpayers filing income tax returns in 2026 face challenges involving property sale calculations, AIS mismatches, incorrect return forms, foreign asset disclosures and portal glitches. The Income Tax Department has also explained why overseas accounts and investments may now appear in AIS.
Why Accurate Reporting Matters More This Filing Season
New Delhi, July 22, 2026: Filing an Income Tax Return has become more digital and largely pre-filled, but taxpayers are still facing several reporting challenges. The most common ITR filing errors in 2026 involve incorrect figures, incomplete disclosures, mismatches in financial information, and the selection of the wrong return form.
Taxpayers must check whether the interest income shown in their Annual Information Statement matches their bank records, whether capital gains have been calculated correctly, and whether all overseas accounts and investments have been disclosed.
The availability of pre-filled information does not mean every figure is automatically complete or accurate. Taxpayers remain responsible for reviewing the information, correcting errors, and retaining documents that support the figures reported in their returns.
Property Sale Tax Rules Require Careful Comparison
One of the biggest areas of confusion relates to the taxation of residential property sales.
Taxpayers selling residential properties purchased before July 23, 2024, may be able to compare two methods of calculating long-term capital gains tax. These are the earlier 20% tax rate with indexation and the newer 12.5% rate without indexation.
Indexation adjusts the purchase cost of an asset to account for inflation. It can reduce the taxable capital gain, particularly when a property has been held for several years. However, the lower 12.5% rate without indexation may be more beneficial in some cases.
Taxpayers should calculate the liability under both available methods before choosing the more favourable option. They should also manually check any surcharge or interest calculated by the return-filing utility, as incorrect calculations may sometimes require correction before filing.
Purchase agreements, sale deeds, improvement expenses, and other supporting documents should be kept ready when reporting property transactions.
AIS Mismatches Remain a Major Filing Problem
The Annual Information Statement, Taxpayer Information Summary, and Form 26AS are important reference documents, but they should not be treated as the final source of information.
Mismatches may occur because of errors made by banks, employers, deductors, or other reporting organisations. A transaction may also be reported with incomplete information or incorrectly linked to a taxpayer’s PAN.
Common differences can involve:
- Bank interest income
- Sale of shares or mutual funds
- Property transactions
- Tax deducted at source
- Foreign financial transactions
- Dividend income
- High-value investments
Taxpayers should compare AIS entries with bank statements, Form 16, Form 16A, investment statements, broker reports and other personal records.
Where the information is incorrect, the taxpayer may submit feedback through AIS and contact the bank, employer, deductor or reporting entity responsible for the entry. A grievance may also be raised through the income tax portal where necessary.
A mismatch should not simply be ignored. Even when the taxpayer reports the correct amount using supporting records, the difference may lead to a clarification request from the Income Tax Department later.
Why Foreign Accounts and Investments Are Appearing in AIS
Some taxpayers may now notice overseas bank accounts, foreign shares, investments, interest income, or dividends appearing in their AIS.
The Income Tax Department has clarified that the appearance of foreign financial information does not automatically mean that an investigation or scrutiny proceeding has been initiated.
The information is being displayed as part of a taxpayer facilitation initiative. It allows taxpayers to see certain overseas financial details already available to the department and compare them with their own records before filing an income tax return.
India receives financial information from more than 100 countries through international information-sharing arrangements. The information received may include foreign bank accounts, investments, interest payments, and dividend income.
The foreign financial information is available only to the taxpayer through the secure login on the Income Tax e-Filing portal.
The facility is intended to improve transparency, reduce accidental omissions, and help taxpayers complete the relevant foreign income and asset schedules accurately.
How to Check Foreign Assets Information
Taxpayers can check the available foreign financial information by following these steps:
- Log in to the Income Tax e-Filing portal.
- Open the Annual Information Statement.
- Proceed to the Compliance Portal.
- Select the Reports section.
- Choose Foreign Assets Information.
- Select the relevant reporting year.
- Download and review the report.
The downloaded information should be compared with foreign bank statements, broker statements, dividend records, and investment documents.
Foreign Assets Must Be Reported Even If Missing From AIS
The foreign asset report is a verification facility and not a replacement for the taxpayer’s disclosure responsibility.
Taxpayers who are required to report foreign assets must disclose all applicable overseas accounts, investments, and other assets in Schedule FA. Relevant foreign income must also be reported in the appropriate income schedules.
An overseas asset should not be omitted merely because it does not appear in AIS. The information received from another jurisdiction may be incomplete, delayed or limited to particular types of accounts and transactions.
Taxpayers may also need to review Schedule FSI for income earned outside India and Schedule TR when claiming relief for foreign taxes paid, depending on their circumstances.
Foreign asset reporting requirements can depend on the taxpayer’s residential status. Taxpayers with foreign employee stock options, overseas bank accounts, foreign shares or complex international income may need professional assistance.
Choosing the Wrong ITR Form Can Make a Return Defective
Selecting the correct income tax return form has become increasingly important as taxpayers invest in shares, cryptocurrency, foreign securities and other assets.
A salaried person with straightforward income may qualify for a simpler return form. However, taxpayers with capital gains, business income, foreign assets or foreign income may need to use a different form.
Common mistakes include:
- Using a form that does not permit foreign asset reporting
- Failing to report capital gains
- Omitting cryptocurrency income
- Missing overseas bank accounts or investments
- Claiming deductions not allowed under the selected tax regime
- Reporting rental income or tax deductions incorrectly
- Failing to disclose mandatory financial information
Taxpayers should review all income sources and disclosures before selecting a return form. Using an incorrect form could result in the return being treated as defective or requiring revision.
New Income Tax Act Has Created Some Confusion
Some taxpayers filing returns for the 2025–26 financial year may be uncertain about whether they should follow the Income Tax Act, 2025 or the terminology used under the Income-tax Act, 1961.
The current filing utilities and return forms continue to guide taxpayers through the applicable assessment year, schedules, and filing requirements. The transition has created some uncertainty about terminology, but taxpayers should use the latest return utility and official filing instructions available for the relevant year.
Using an older return utility may lead to validation problems or missing disclosure fields. Taxpayers should also review the official frequently asked questions and instructions before completing complex schedules.
Portal Glitches Can Delay Return Filing
Although the e-Filing portal offers pre-filled returns, online verification, and improved taxpayer services, users may still encounter technical problems.
Common complaints include:
- Slow portal response
- Login failures
- OTP delays
- Validation errors
- Failed document uploads
- E-verification problems
- Difficulty accessing AIS or tax statements
These problems may become more frequent close to the filing deadline because of increased portal traffic.
Taxpayers should begin preparing their returns early instead of waiting until the final few days. Trying the portal during non-peak hours may also help when the system is experiencing heavy demand.
After submitting the return, taxpayers must complete e-verification within the permitted period. Filing without completing verification does not finish the return-filing process.
Final Checks Before Submitting the ITR
Before submitting an income tax return, taxpayers should:
- Reconcile AIS, TIS, and Form 26AS with personal records
- Confirm salary, interest, and dividend income
- Review property and investment capital gains
- Select the correct ITR form
- Report cryptocurrency transactions where applicable
- Disclose all required foreign assets and foreign income
- Check deductions under the selected tax regime
- Verify tax payments and TDS credits
- Review surcharge and interest calculations
- Complete e-verification after filing
The biggest risk during the 2026 filing season is not always an incorrect tax payment. In many cases, incomplete reporting, data mismatches or missed disclosures may cause greater difficulty.
Beginning the process early, retaining supporting records, and checking every entry before submission can reduce the possibility of notices, revised returns and prolonged correspondence with the tax department.
