The Income Tax Department, under the Central Board of Direct Taxes (CBDT), has officially released the ITR-5 Form for Assessment Year (AY) 2025-26, covering income earned during Financial Year (FY) 2024-25. Announced on May 1, 2025, the updated form incorporates several major changes introduced under the Finance Act, 2024, ensuring better compliance and transparency for certain taxpayer categories.
Earlier, ITR-1 and ITR-4 were issued on April 29, followed by ITR-3 on April 30. Now, the launch of ITR-5 aims to facilitate return filing for partnerships, LLPs, and other entities with simplified reporting options—especially for those with long-term capital gains (LTCG) up to Rs. 1.25 lakh from listed shares.
What’s New in ITR-5 for AY 2025-26?
Here are the major updates in the latest ITR-5 form:
1. Capital Gains Classified by Sale Date
To align with changes introduced in the Finance Act, 2024, the ITR-5 now mandates taxpayers to report capital gains based on whether the asset was sold before or after July 23, 2024. This change helps accurately apply the revised taxation rules.
2. Share Buyback Losses Now Allowed (Effective October 1, 2024)
Taxpayers can now claim capital losses from share buybacks, provided the corresponding dividend income was declared as “Income from Other Sources.” This new provision, effective from October 1, 2024, corrects previous inconsistencies in buyback taxation.
3. Cruise Business Income Reporting – Section 44BBC
A new reporting requirement has been added for cruise tourism operators under Section 44BBC. This section introduces a simplified taxation scheme for cruise ship businesses, reflecting the government’s focus on promoting this sector.
4. Mandatory Disclosure of TDS Section Codes
To enhance transparency and improve TDS reconciliation, taxpayers are now required to mention the relevant TDS section code in the TDS schedule. This helps match deductions claimed with data reported by deductors.
Who Should File ITR-5 for AY 2025-26?
The ITR-5 form is applicable to the following entities:
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Firms
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Limited Liability Partnerships (LLPs)
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Association of Persons (AOPs)
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Body of Individuals (BOIs)
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Artificial Juridical Persons (AJPs)
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Estates of deceased or insolvent individuals
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Business trusts
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Investment funds
Who Cannot File ITR-5?
The following taxpayers are not eligible to use ITR-5:
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Individual taxpayers
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Hindu Undivided Families (HUFs)
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Companies
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Entities mandated to file ITR-7 (such as charitable or religious institutions)
When Does ITR Filing Start for AY 2025-26?
With ITR-1, ITR-3, ITR-4, and now ITR-5 already released, the online income tax return filing process is expected to begin shortly—most likely by the first week of May 2025.
Important Deadlines:
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July 31, 2025 – Last date for filing returns without audit.
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October 31, 2025 – Deadline for taxpayers requiring an audit.
Conclusion:
The release of ITR-5 for AY 2025-26 brings several taxpayer-friendly changes, especially for entities engaged in capital markets or the cruise business. Taxpayers falling under eligible categories should prepare their documentation early to ensure smooth and timely filing.