Tax & ITR
The New "Receipts Not in the Nature of Income" Field in the ITR (AY 2026-27)
In short
While updating the ITR utilities for AY 2026-27, the income tax department has added a new row under Schedule EI (Exempt Income) called "Receipts not in the nature of income." It is a place to disclose money you received that is not income at all — think loans, gifts from close relatives, inheritance, or the sale of agricultural land that isn't a capital asset. The one thing to be clear about: reporting here does not make the money taxable. It is a transparency tool that helps your return match the bank credits the department already sees in your AIS, reducing the odds of a scrutiny notice. Use of the field is optional, and it mainly appears in ITR-2 and ITR-3, which carry the full Schedule EI.
Every filing season brings a few quiet tweaks to the ITR forms that never make the headlines but change how you should fill your return. This year one of them is worth understanding properly, because it touches a question that trips up honest taxpayers again and again: "A large amount came into my bank account, but it isn't my income — where do I show it?" The department's answer for AY 2026-27 is a new field titled "Receipts not in the nature of income."
What exactly has changed
When the CBDT first notified the ITR forms for AY 2026-27 and then updated the filing utilities and schema, Schedule EI — the schedule where you disclose income that is exempt from tax — was reorganised. The older, loosely defined "Other Exempt Income" style entry was replaced with more specific reporting, and a distinct row for "Receipts not in the nature of income" was carved out. The intent is to stop taxpayers from dumping true non-income receipts into an "exempt income" box where they never belonged.
It is a small change on screen and a meaningful one in principle. For the first time there is a clearly labelled home in the return for money that is neither taxable income nor exempt income — it is simply not income.
The distinction that matters: exempt income vs. not income at all
These two ideas sound similar and are constantly confused. They are not the same thing.
| Exempt income | Receipt not in the nature of income | |
|---|---|---|
| What it is | Income that the Act specifically exempts from tax | Money that was never "income" under the Act in the first place |
| Examples | Agricultural income, PPF interest, tax-free dividends, certain allowances | Loans, gifts from relatives, inheritance, sale of rural agricultural land, sale of personal effects |
| Why it isn't taxed | A section of the law grants an exemption | There is nothing to tax — it falls outside the definition of income |
| Where it now goes | The exempt-income rows of Schedule EI | The new "Receipts not in the nature of income" row of Schedule EI |
The practical upshot: a gift of Rs 5 lakh from your father and Rs 5 lakh of agricultural income are both tax-free, but for different reasons — and the form now wants you to place them in different rows.
What you can report under the new field
The receipts that typically belong here are capital or personal receipts that never had the character of income. Common examples flagged by tax professionals include:
- Loans received — a housing loan, a personal loan, or money borrowed from a relative or friend. A loan is a liability, not income, so it is never taxable.
- Gifts from specified relatives — money received from parents, spouse, siblings, children and other relatives covered by Section 56(2)(x). These are outside the gift-tax net entirely.
- Inheritance and bequests — money or assets received on the death of a person, or under a will. Inheritance is expressly excluded from tax.
- Sale of rural agricultural land — land that does not qualify as a "capital asset," so its sale produces no capital gain.
- Sale of personal effects — proceeds from selling personal-use items that are not capital assets.
- Other capital receipts that clearly fall outside the meaning of income.
These are the classic situations where a big credit hits your account but no tax is due — and until now there was no clean place to say so.
The rule you must not get wrong: this adds no tax
It is worth repeating in bold because it is the point people panic about. Disclosing a receipt under this field does not make it taxable. A loan does not become income because you mention it. A gift from your mother does not attract tax because you list it. The row is a disclosure, not a charge. If anything, it protects you — it puts the non-taxable nature of the money on record in your own return.
Why the department added it — and why you might want to use it
The tax department today sees far more than most people realise. Through the Annual Information Statement (AIS) and the Statement of Financial Transactions (SFT), high-value bank credits, property deals and investments are already visible against your PAN. A mismatch between what lands in your bank account and what appears in your return is one of the most common triggers for an enquiry under Section 143 or a "please explain" communication.
This field lets you close that gap on your own terms. As one common way of putting it goes: the disclosure does not create a liability — it prevents the question from being asked. If Rs 20 lakh came in as a loan and Rs 8 lakh as a gift from your father, showing them here means your return already explains those credits, and the department has little reason to knock. For anyone whose bank inflows are much larger than their taxable income in a given year, that reconciliation is genuinely useful.
But don't over-report either
Reporting here is optional and a matter of judgement. The presence of the row does not mean every rupee of non-taxable money must be itemised. Routine, small or easily explained credits generally don't need to go in. The field earns its keep when a receipt is large, visible in your AIS or bank statement, and could look like unexplained income to an outsider. The skill is in deciding which receipts actually need the spotlight — reporting too much can create as many questions as it answers, and mis-classifying a taxable receipt as "not income" is a real risk.
Where you'll find the field, and how to use it
Schedule EI appears in the more detailed returns — chiefly ITR-2 (for those with capital gains, multiple properties or no business income) and ITR-3 (business or professional income), among other forms that carry the schedule. The very simple ITR-1 (Sahaj) does not carry a full Schedule EI, so most salaried filers with only Form 16 income won't see it. If you file ITR-2 or ITR-3 and had a genuine non-income credit this year, this is the box to consider.
Before you fill it, do three things:
- Reconcile your AIS and bank statement and identify which large credits are not income.
- Classify each receipt correctly — is it truly outside the definition of income, or is it actually taxable or merely exempt? This is where a wrong call hurts.
- Keep the paperwork — loan agreement, gift deed or relationship proof, will or succession document, sale deed — so you can substantiate the entry if ever asked.
The bottom line
The new "Receipts not in the nature of income" field is a small, sensible piece of housekeeping that finally gives honest non-income receipts a proper home in the return. It adds no tax, it is optional, and used well it is a quiet shield against unnecessary notices. Used carelessly — by misclassifying a receipt or over-disclosing — it can do the opposite. As with most things in the ITR, the value is in getting the classification right.
This is general information, not tax advice. The correct treatment of any receipt depends on its exact facts, and the ITR schema can change during the season — confirm with a qualified professional before you file.
How Startup Advisory Can Help
Startup Advisory is a CA-led firm in Saket, New Delhi that files income tax returns for individuals, founders, freelancers and businesses across Delhi NCR. The "is this money income or not?" question is exactly where our team adds value:
- We reconcile your AIS and bank statements and correctly classify every large credit before we file.
- We decide what genuinely needs disclosure under the new Schedule EI row — and what doesn't — so your return is clean without over-reporting.
- End-to-end ITR filing and tax advisory with the right form, every eligible deduction, filed on time.
- A named CA who reviews your return and handles any notice that follows.
Call 9311972982 or book a free consultation to get your AY 2026-27 return filed correctly.
