For assessment year 2026–27, eligible taxpayers can report income from up to two house properties in ITR-1. The Income Tax Department’s current filing guidance says the form has expanded from one property to two and includes a specific field for rent that cannot be realised. The change affects which return form some taxpayers may use; it does not by itself create a new tax exemption. (Income Tax Department ITR-1 guidance)
The Central Board of Direct Taxes notified the corresponding amendment in March 2026, applicable to returns filed for AY 2026–27. The Department’s online FAQ repeats the two-property limit and describes the updated house-property reporting fields. (CBDT Notification No. 45/2026)
The two-property limit is only one eligibility condition
The Department’s ITR-1 guidance lists income from more than two house properties among the reasons a taxpayer cannot use the form. It also lists a total-income limit of ₹50 lakh, alongside other restrictions involving types of income and personal circumstances. The two-property allowance should therefore not be read as a blanket rule that every owner of one or two homes qualifies for ITR-1.
The form is about reporting income from house property. A person may need a different return if another eligibility condition applies, such as specified capital gains, business income or other circumstances listed by the Department. The relevant question is not only “How many properties do I own?” but whether the taxpayer and all income sources meet the current form’s eligibility conditions.
What property owners should check
The filing guidance identifies a field for unrealised rent and asks for details connected with interest on borrowed capital, including loan information. Property owners reporting rental income should compare their records with the current online return and the Department’s instructions before filing.
BestProp.ai has also explained a separate home-sale tax provision in the Income-tax Act 2025. That topic concerns a different part of property taxation. The ITR-1 amendment is a form-eligibility and reporting change; it should not be confused with a change to the tax rate or an exemption on property income.
The Department’s current guidance is the controlling source for filing eligibility and fields. Taxpayers with multiple income types, ownership arrangements or unusual property facts should check the full rules or seek individual tax advice rather than relying on the property count alone.