The Central Board of Direct Taxes (CBDT) has introduced the updated ITR-5 form for Assessment Year 2025-26, effective from May 1, 2025. The changes correspond to provisions implemented in the Finance Act of 2024, such as increased reporting requirements and structural revisions.
Also, the income tax department had earlier made available forms ITR-1 and ITR-4 on April 29, 2025, and ITR-3 a day later. The release of ITR-5 is one of a series of upgrades aimed at streamlining the tax filing system, including certain critical updates that taxpayers should be aware of.
Who Can File ITR-5 Form
The ITR-5 form is designed for entities, such as firms, limited liability partnerships (LLPs), associations of persons (AOPs), bodies of individuals (BOIs), artificial juridical persons (AJPs), as well as estates of deceased and insolvent individuals. It also applies to business trusts and investment funds.
It is not meant for individuals, Hindu Undivided Families (HUFs), or companies, nor for those required to file income tax returns under ITR-7 or under sections 139(4A), 139(4B), 139(4C), or 139(4D) of the Income-tax Act, 1961.
Key Changes In ITR-5 Form for AY 2025-26
The form for AY 2025-26 includes key updates to simplify and clarify the tax filing process.
The separation of schedule-Capital Gain which mandates that taxpayers record capital gains for transactions that take place before and after July 23, 2024, is a significant change in the ITR-5 form. This update aligns with the changes introduced in the Finance Act, 2024.
Another significant change allows taxpayers to report capital losses arising from share buybacks. However, this is only applicable if the matching dividend income from these buybacks is declared as “income from other sources”, particularly for transactions occurring after October 1, 2024.
The form has also been modified to incorporate a reference to Section 44BBC, which is applicable to cruise industry enterprises. Lastly, to facilitate more accurate tax filing, taxpayers must now include the TDS section code in Schedule-TDS.
The deadline to file income tax return (ITR) for non-audited cases is July 31, 2025. However, if an audit is required, the last date for filing is October 31, 2025.
