India's New Income Tax Return Forms Impose Separate Disclosure for Non-Resident Indians' Turnover and Income Under Presumptive Income Scheme

New Income Tax Return Forms for Assessment Year 2026-27 Introduced

The revised Income Tax Return (ITR) forms for Assessment Year (AY) 2026-27 now include dedicated fields to report income from businesses covered under Sections 44B, 44BB, 44BBA, 44BBC, and 44BBD. Non-resident taxpayers opting for the presumptive taxation scheme are required to disclose both their total receipts or turnover and the corresponding net profit in these newly introduced columns.

It is essential to note that Assessment Year (AY) 2026-27 is different from Tax Year 2026-27. For AY 2026-27, salaried individuals, pensioners, students, and those not subject to a tax audit are required to file their income tax returns by July 31, 2026. In contrast, for Tax Year 2026-27, the return filing deadline will be July 31, 2027.

Understanding Presumptive Taxation Sections

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These five sections, 44B, 44BB, 44BBA, 44BBC, and 44BBD, apply exclusively to non-residents earning from specific businesses in India. The common thread across all of them is presumptive taxation; instead of maintaining full books of accounts and calculating actual profits, the law fixes a percentage of gross receipts as taxable income. Compliance is simpler, and the deemed income applies regardless of what the actual profit or loss was.

New Presumptive Taxation Scheme for Electronics Manufacturing

The Finance Act, 2025, has introduced Section 44BBD, which offers a presumptive taxation scheme for non-residents involved in providing services or technology for setting up electronics manufacturing facilities or producing electronic goods in India. Effective from Assessment Year 2026-27, the scheme treats 25 percent of the specified receipts as taxable income.

Changes in ITR Forms

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Earlier, while Sections 44B, 44BB, 44BBA, and 44BBC governed presumptive taxation for non-residents, there was no requirement to separately disclose gross receipts or presumptive income in ITR filings.

Additionally, the newly introduced Section 44BBD applies to non-residents providing services or technology for electronics manufacturing in India, taxing 25 percent of gross receipts as income.

Changes in Reporting of Foreign Retirement Accounts

Taxpayers with foreign retirement accounts can no longer file ITR-1 or ITR-4. The specific field for claiming Section 89A relief has also been removed from these simpler forms. As a result, individuals must file ITR-2 or ITR-3 and file Form 10-EE before the ITR deadline to defer annual tax on accruals in their US 401(k), Self-Invested Personal Pension (SIPP), or Registered Retirement Savings Plan (RRSP).