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Key Points

The Central Board of Direct Taxes has released the new ITR Form 5 with significant modifications for the assessment year 2025-26. Key changes include a detailed bifurcation of capital gains reporting and new provisions for share buyback losses. Taxpayers must now specify TDS section codes and make specific declarations about their tax regime choices. These updates aim to enhance transparency and provide more comprehensive tax reporting mechanisms.

Key Points: CBDT Unveils ITR Form 5 with Major Tax Reporting Changes

  • CBDT updates ITR Form 5 with detailed capital gains reporting requirements
  • New provisions for share buyback and TDS section reporting
  • Specific changes for tax regime options and declarations
2 min read

CBDT issues new ITR Form 5 with key updates for assessment year 2025-26

CBDT introduces key updates in ITR Form 5 for AY 2025-26, including capital gains reporting and new TDS section requirements

"Capital loss on share buyback is allowed if corresponding dividend income is shown - CBDT Notification"

New Delhi, May 3

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.

- IANS

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Reader Comments

R
Rajesh K.
Good move by CBDT to bring more clarity in capital gains reporting! The bifurcation before/after July 23 will help track tax implications better. Though I wish they'd simplify the forms further - still too complex for common taxpayers like me 😅
P
Priya M.
As a small business owner, I appreciate the reference to Section 44BBC for cruise businesses. Shows the government is considering niche sectors. But the multiple form changes every year make compliance stressful. Can we have stability for at least 3 years?
A
Amit S.
The new TDS section code requirement is excellent! Will reduce mismatches and refund delays. But CBDT should conduct more awareness campaigns in regional languages - many taxpayers in tier 2/3 cities struggle with these technical updates.
S
Sunita R.
Why such complicated rules for share buyback losses? This will only benefit big corporates while small investors like us get more compliance headaches. The ₹1.25 lakh LTCG limit in ITR-1 is too low for metro cities where property values are high.
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Vikram J.
Positive steps towards transparency, but the real test is implementation. Last year my ITR got stuck for 6 months due to system glitches. Hope the portal is upgraded to handle these new requirements smoothly. #DigitalIndia should mean seamless tax filing!
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Neha P.
The opt-in/opt-out clarification for new tax regime is much needed! Was confused last year. But can we please have a comparison calculator built into the ITR portal? Would save taxpayers from running between CAs and online tools to make informed choices.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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