CBDT issues new ITR Form 5 with key updates for assessment year 2025-26
New Delhi: The Central Board of Direct Taxes (CBDT) has notified the new Income Tax Return (ITR) Form 5 for the assessment year (AY) 2025-26 with some key updates.
The Income Tax Department has introduced several changes in the new I-T return form, it said on an X post on Saturday.
A major change involves a bifurcation in Schedule-Capital Gain, requiring taxpayers to separately report capital gains before and after July 23, 2024.
The form also enables reporting of capital loss on share buybacks, subject to specific conditions.
According to other major updates in I-T Form 5, 'Capital loss on share buyback is allowed if corresponding dividend income is shown as income from other sources (post 01.10.2024); reference of sec 44BBC (cruise biz) added; and TDS section code to be reported in Schedule-TDS'.
The new ITR Form 5 includes a specific reference to Section 44BBC of the Income Tax Act. This section deals with the presumptive taxation of income for certain businesses.
Also, taxpayers must now specify the Tax Deducted at Source (TDS) section code within the Schedule-TDS of the return form.
This change seeks to improve transparency and ensure proper classification of TDS deductions.
Earlier, CBDT notified the income tax return forms ITR-1 and ITR-4 for the financial year 2024-25 and the assessment year 2025-26. The returns for incomes earned during the financial year from April 1, 2024, to March 31, 2025, have to be filed using the new forms.
A major change in the ITR forms this year is that ITR-1 (SAHAJ) can be filed for notifying long-term capital gains (LTCG) under section 112A.
This is subject to the condition that the LTCG is not more than Rs 1.25 lakh, and the income tax assessee has no loss to carry forward or set off under the capital gains head.
The notification also stipulates that in cases where income tax assesses have opted out of the new income tax regime in AY 2024–25, they must declare and opt to either continue or reverse the selection.
Those who have opted out of the new income tax regime for the first time in AY 2025–26 must furnish Form 10-IEA acknowledgement details.
Additionally, there must also be a clarification for the late filing of Form 10-IEA.
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