An increasing number of taxpayers are reporting income from sources beyond their regular salaries, including investments, trading, freelancing and business activities, according to an analysis of income tax returns filed through ClearTax for Assessment Year (AY) 2026-27.
Non-ITR-1 returns accounted for 62% of all filings on the platform in AY 2026-27, up from 53% in AY 2025-26 and 40% in AY 2024-25, pointing to a growing share of taxpayers reporting income that requires more detailed tax returns.
ITR-2 and ITR-3 filings, which cover taxpayers with capital gains and other income sources, together accounted for 57.2% of ClearTax filings in AY 2026-27, compared with 36.2% two years earlier.
The trend is also visible in the number of taxpayers reporting multiple income sources. According to ClearTax, 47% of self-filers reported income from investments, business, freelancing or cryptocurrency in AY 2026-27, compared with 9.5% in AY 2022-23.
The share of self-filers reporting at least two such non-salary income sources increased from 3.5% to 24% during the same period.
Younger taxpayers filing complex returns
The shift towards more complex tax filings is particularly pronounced among younger taxpayers.
Among self-filers below the age of 25, 75% filed complex returns in AY 2026-27, compared with 60% in the previous assessment year. The share of ITR-3 filings in this age group increased from 28% to 44%, while ITR-1 filings declined from 41% to 25%.
ITR-4 filings among under-25 taxpayers also increased, with their share rising from 8.9% in AY 2024-25 to 15.2% in AY 2026-27. ITR-4 is applicable to eligible individuals and businesses opting for the presumptive taxation scheme.
Middle-income taxpayers also reporting more complex income
The trend is not limited to higher-income households. Nearly half (49.6%) of self-filers in the annual income bracket of ₹5 lakh to ₹10 lakh filed complex returns in AY 2026-27, compared with 36.2% in AY 2025-26, ClearTax data showed.
The platform also reported an increase in women taxpayers declaring capital gains. Around 30.5% of women filers reported capital gains in AY 2026-27, up from 26.1% a year earlier.
Meanwhile, 40% of taxpayers above 60 years of age reported capital gains, compared with 35% in the 40-50 age group.
Capital market participation also brings tax reporting responsibilities
The growing share of ITR-3 filings, which rose from 20.6% in AY 2025-26 to 28.4% in AY 2026-27, also points to increasing complexity in tax reporting.
ClearTax’s data shows that among self-filers below 25 who reported capital gains or losses, 37% reported a loss. The corresponding share among taxpayers above 60 was 21%.
Investors need to account for both gains and losses while filing returns and ensure that their income from different sources is reported under the applicable heads.
The findings suggest that income tax filing is reflecting a wider range of financial activities, extending beyond regular employment income to investments and independent work.
However, the figures represent returns filed through ClearTax and should not be read as a nationwide estimate of taxpayer behaviour.