Income Tax Return Filing AY 2026-27: New ‘Receipts Not in The Nature of Income’ Reporting Field Introduced

The Income Tax Department has updated the Income Tax Return (ITR) utility and schema for Assessment Year (AY) 2026-27, introducing a notable change in the reporting of certain non-taxable receipts. The earlier ‘Other Exempt Income’ field under Schedule EI (Exempt Income) has been removed.

In its place, taxpayers will now find a dedicated category called ‘Receipts not in the nature of income’. The change is aimed at improving clarity and accuracy in the disclosure of transactions that are not taxable because they do not qualify as income under the Income Tax Act, 1961.

What Has Changed in the ITR Utility for AY 2026-27?

In previous ITR utilities, taxpayers could use the ‘Other Exempt Income’ field to report a wide range of tax-exempt receipts. Over time, this category was also commonly used to disclose receipts that were not strictly exempt income but were nevertheless non-taxable.

For AY 2026-27, the Income Tax Department has replaced this broad category with a more specific reporting option titled ‘Receipts not in the nature of income’. The update provides a separate mechanism for reporting transactions that fall outside the scope of taxable income.

Receipts Not in the Nature of Income Explained

The newly introduced field is intended for receipts that are not regarded as income under the provisions of the Income Tax Act. Since these receipts do not fall within the charging provisions of the law, they do not attract income tax.

The category broadly covers capital receipts and other amounts that are not classified as taxable income. The change does not alter the tax treatment of such receipts and serves only as a reporting modification within the ITR utility.

Examples Of Non-Taxable Receipts Under the New Category

Several types of receipts may be disclosed under the new reporting field where applicable. Gifts received from specified relatives continue to remain exempt under the provisions of the Income Tax Act.

Sale proceeds from rural agricultural land may also qualify because such land is not treated as a capital asset for capital gains purposes. Other capital receipts that do not fall within the definition of income can also be reported through this dedicated category, helping taxpayers provide additional transparency in their returns.

Significance Of the New Reporting Field

Voluntary disclosure of non-taxable receipts has often helped taxpayers explain the source of funds reported in their returns. Such disclosures can provide additional context when large receipts appear in financial records or bank accounts.

With the removal of the generic ‘Other Exempt Income’ field, questions arose regarding the appropriate place to disclose these transactions. The introduction of the ‘Receipts not in the nature of income’ category addresses this gap by providing a specific reporting avenue within the ITR framework.

Read More: Income Tax Department Revamps ITR Forms for AY 2026-27 With Wider Disclosures.

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Conclusion

The Income Tax Department's updated ITR utility for AY 2026-27 introduces a dedicated reporting field for receipts that do not qualify as income under tax law. This replaces the earlier ‘Other Exempt Income’ category and aims to improve the classification of non-taxable transactions.

The update does not change the underlying tax treatment of such receipts, which continue to remain outside the scope of taxation where eligible. Taxpayers filing returns for AY 2026-27 may review the revised utility carefully and use the new reporting field wherever applicable.

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