The Indian tax authority has updated the income tax return (ITR) forms for Assessment Year 2026-27, removing the ability for holders of US 401(k) and other foreign retirement accounts to report their income using ITR-1 and ITR-4. Instead, these taxpayers must now file ITR-2 or ITR-3, which require proper disclosure of foreign income and assets. The change aims to streamline the reporting process and align it with existing regulations concerning foreign assets. According to Chartered Accountant Suresh Surana, this adjustment eliminates redundancy and enhances consistency in tax filings. Taxpayers can still defer taxes on income from foreign retirement accounts under Section 89A, provided they file Form 10-EE for accounts maintained in notified countries like the US. Retired individuals are advised to file the appropriate return form and disclose their foreign retirement accounts in Schedule FA, ensuring any related income is reported under Schedule FSI. This compliance is crucial for avoiding tax issues and leveraging potential foreign tax credits.