Bank balance disclosure made mandatory in ITR-4 for AY 2026-27 – Money News | The Financial Express

Clipped from: https://www.financialexpress.com/money/bank-balance-disclosure-made-mandatory-in-itr-4-for-ay-2026-27-4235333/

The Central Board of Direct Taxes (CBDT) has said a major compliance change is mandatory disclosure of bank balances under the revised income tax return forms for taxpayers filing ITR-4 for Assessment Year (AY) 2026-27.

The Central Board of Direct Taxes (CBDT) has said a major compliance change is mandatory disclosure of bank balances under the revised income tax return forms for taxpayers filing ITR-4 for Assessment Year (AY) 2026-27.

The Central Board of Direct Taxes (CBDT) has said a major compliance change is mandatory disclosure of bank balances under the revised income tax return forms for taxpayers filing ITR-4 for Assessment Year (AY) 2026-27. The government has been gradually increasing the disclosure requirements in ITR forms to bring in more transparency and to have a more data-driven tax administration. CBDT has issued Notification No. 45/2026/F. No. 370142/5/2026-TPL dated March 30, 2026 to provide additional reporting of bank balance in ITR-4 AY 2026–2027.

Earlier, the bank account details such as account number, IFSC code and bank name were to be disclosed by taxpayers filing ITR-4, but the disclosure of actual bank balances was optional. However, the latest ITR-4 changes are likely to affect small business owners, professionals, freelancers, consultants, transport operators and salaried individuals earning side income under the presumptive taxation regime covered under Sections 44AD, 44ADA and 44AE of the Income-tax Act.

Could this new rule impact presumptive taxation benefits?

Earlier, certain balances/items such as Sundry Creditors, Inventories, Sundry Debtors and Cash in hand were mandatorily required to be disclosed, resulting in a compliance-driven reporting format even where such elements were not relevant to the taxpayer’s facts.

However, the revised framework now requires the taxpayers to mandatorily disclose all their bank balances which was optional disclosure under Schedule BP – Financial Particulars of the Business till last financial year. 

“It is pertinent to note that even though such disclosure did not form a part of mandatory disclosure under Schedule BP, the taxpayers were nevertheless required to disclose their Bank details under “Part D21 – Bank Account – Details of all Bank Accounts held in India at any time during the previous year (excluding dormant accounts)”,” said CA (Dr.) Suresh Surana.  

In this schedule, the taxpayers were required to provide the details of all the savings/ current accounts held in India during the relevant tax year except dormant accounts which are not operational for more than 3 years.

Is your bank balance now under closer tax scrutiny?

The additional reporting requirements indicate a broader move towards data-driven tax administration and greater financial transparency. Such mandatory reporting of bank balances in ITR-4 is primarily a transparency measure and does not, by itself, imply increased scrutiny. 

However, it enables tax authorities to better correlate income with financial data. Taxpayers should ensure consistency between presumptive income and banking transactions to avoid potential scrutiny.

What does the new ITR-4 disclosure mean for salaried individuals with side income?

For salaried individuals with supplementary income from freelancing, consultancy, digital platforms, or small businesses, the enhanced ITR-4 disclosures may require an additional reporting of the Bank balances as mentioned above. 

“This may lead to greater compliance responsibility, particularly in reconciling side income with bank receipts and other financial records. Individuals earning ancillary income should carefully evaluate whether they continue to qualify for presumptive taxation and ensure accurate reporting to mitigate potential compliance issues,” added CA (Dr.) Suresh Surana. 

Will taxpayers need professional help to file ITR-4 now?

The Government has progressively strengthened disclosure and reporting requirements under the Income-tax Return (ITR) forms to enhance transparency, improve data-driven compliance monitoring, and enable more effective risk-based tax administration. The recent changes in ITR forms, including enhanced disclosures relating to bank accounts are part of this broader compliance framework.

With the tax authorities increasingly relying on technology-driven assessments and automated data matching, even inadvertent errors, omissions, or inconsistencies in return filings may trigger notices or scrutiny proceedings. 

“In this evolving compliance environment, taxpayers particularly small businesses, professionals, freelancers, and individuals with multiple income sources should prefer professional assistance to ensure accurate disclosures, proper tax positions, and consistency across financial records and regulatory filings,” commented CA (Dr.) Suresh Surana.  

While taxpayers with simple financial profiles may continue to file returns independently, the growing complexity of reporting requirements makes professional review increasingly relevant to minimise compliance risks and avoid procedural lapses.