Tax Professionals, Income Taxpayers under Confusion as Portal Turns on ITR-2 and ITR-3 for e-Filing Momentarily

At approximately 10:30 a.m. IST, several users attempting to file returns on the incometax.gov.in portal noticed that the “Select ITR Form” dropdown menu, which typically lists only ITR-1 (Sahaj) and ITR-4 (Sugam) in the initial stage, now included ITR-2 and ITR-3 selections as well. Screenshots circulating on social media platforms showed taxpayers confronted with four choices, accompanied by explanatory text outlining the scope of ITR-2—for individuals earning income from multiple sources—and ITR-3—for those carrying on proprietary business or profession. Yet within minutes, the portal reverted to the standard two-form display.

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This unexpected change has caused a great deal of worry. Taxpayers who believed they fell under the simpler ITR-1 or ITR-4 categories are now second-guessing their eligibility. Many want to avoid selecting the wrong form and risking a reassessment notice or late-filing penalty.” Sharma added that his firm received dozens of calls within ten minutes of the glitch, with clients anxious to know whether they should wait for the more complex forms to be formally open for submission.

Implications for Taxpayers

Under income-tax regulations, ITR-1 and ITR-4 are intended for salaried individuals, pensioners, and taxpayers with limited income sources, while ITR-2 and ITR-3 accommodate those with capital gains, multiple house properties, income from business or profession, or share trading. The phased rollout of these forms each year allows the department to manage the influx of filings and updates tailor-made reporting formats. The unanticipated momentary activation of ITR-2 and ITR-3 could therefore disrupt the planned schedule communicated to taxpayers and intermediaries.

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One concern is that if a taxpayer selects ITR-2 or ITR-3 prematurely, they might be prompted to furnish detailed balance-sheet and audit reports before the forms are fully compliant with the latest regulatory changes. This would impose an undue burden on small business owners still awaiting clarity on new disclosures.

Department Response

The Income Tax Department has not issued a formal statement on the incident. However, an official familiar with the system maintenance—speaking on condition of anonymity—indicated that the portal update was part of routine backend testing, inadvertently pushed to the live environment. “The technical team swiftly rolled back the change once they identified it,” the source said, adding that no filings made with the incorrect forms would be processed or accepted.

Meanwhile, the portal’s “Help” section and FAQs continue to advise taxpayers to use ITR-1 or ITR-4 until further notification. The department is expected to announce the formal opening of ITR-2 and ITR-3 e-filing options later this month, along with detailed user guides reflecting recent amendments to audit thresholds and disclosure requirements.

Way Forward

Tax professionals suggest that taxpayers closely monitor official notifications and avoid making form selections based on fleeting interface options. It is best to wait for a clear government circular. In the meantime, ensure your income details and documents are ready so you can file promptly once the correct forms go live.

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Both taxpayers and intermediaries will be watching the Income Tax Department’s portal for definitive guidance, hoping to avoid further confusion and ensure timely, accurate filings.

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