CBDT Notifies Revised ITR-5 Form for AY 2025-26 [Read Notification]

The Central Board of Direct Taxes (CBDT) has officially notified the revised Income Tax Return (ITR) Form ITR-5 for the Assessment Year (AY) 2025–26 through Notification No. 41/2025 dated April 30, 2025. This revision is introduced as part of the 13th Amendment to the Income-tax Rules, 1962, and takes effect from April 1, 2025. The ITR-5 form is applicable to persons other than individual, HUF, company, and those filing ITR-7 — typically used by LLPs, firms, AOPs, BOIs, and others.

This updated version of ITR-5 introduces a host of new features and modifications aimed at strengthening transparency, tax base expansion, and alignment with legislative changes. Here’s a breakdown of the key changes introduced in the AY 2025–26 form compared to the previous version for AY 2024–25:

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Major Additions and Modifications in ITR-5 for AY 2025–26

1. New Clause for Virtual Digital Assets (VDAs): A new clause (7f) has been inserted in Schedule OI to report expenses related to income under Section 115BBH (VDAs), excluding the cost of acquisition. This enhances traceability of VDA-linked income.

2. Detailed Reporting for Capital Gains Exemptions: The updated Schedule CG now requires year-wise tracking of exemption claims under Sections 54D, 54G, and 54GA. Taxpayers must report:

• Year of asset transfer
• Deduction claimed section
• Amount deposited/used under the Capital Gains Account Scheme

3. Form 16E for TDS on Business Trust Distributions: A new reference to Form No. 16E has been added in the TDS schedule, allowing reporting of income distributed by business trusts under Section 194LBA, streamlining credit claims for such incomes.

4. Expanded Audit Reporting Requirements: The General Information section now seeks additional disclosures regarding audit applicability, including type (44AB or 92E), date of audit report, auditor’s membership number, and firm registration number.

5. Revised Partner/Member Information Table: The form now includes comprehensive fields for all admitted/retired partners or members, capturing:

• PAN
• Date of change
• Share in profit/loss and capital
• Remuneration details

6. Unlisted Equity Shareholding Details Enhanced: The schedule for unlisted equity shares now captures transaction-wise acquisition/sale details, cost, face value, and consideration, strengthening capital flow tracking and beneficial ownership visibility.

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7. Improved TDS/TCS Schedules: The new form offers a more user-friendly format for summarizing and reconciling TDS/TCS claims, cross-referenced with 26AS and AIS data.

8. Expanded Nature of Business Classification: Enhanced classification codes under Schedule BP and QD allow for more granular tracking of business segments, inventory, and production yields for manufacturing/trading entities.

9. Schedule OI – Disallowances Reporting Reorganized: Greater clarity has been introduced in declaring inadmissible expenses under sections 36, 37, 40, 40A, and 43B, including tax disallowances and late payments to employees and vendors.

10. Mandatory Digital Verification & Filing: The updated form retains the requirement for Digital Signature Certificate (DSC) for audit cases, while supporting Aadhaar OTP/net banking for others.

These updates collectively aim to increase precision in tax disclosures, reduce mismatches during processing, and promote voluntary compliance.

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Entities filing ITR-5 are advised to carefully review the revised reporting formats and ensure consistency with financial statements, audit reports, and TDS records before submission.

To Read the full text of the Order CLICK HERE

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