Updated Income Tax Return Form 5 for the year 2025-26 introduced, featuring significant revisions
Breaking: New Income Tax Return Form 5 Unveiled by CBDT 🔍
Get ready, taxpayers! The Central Board of Direct Taxes (CBDT) has dropped a bombshell with therollout of Notification No. 42/2025 on May 1st, 2025, introducing the fresh Income Tax Return (ITR) Form 5 for the Assessment Year 2025-26. And guess what? It ain't just a facelift – this bad boy introduces some major changes that you gotta know about! 👊
First up, the Schedule-Capital Gain is getting a makeover with a good ol' split – taxpayers are now required to report their capital gains, divvied into two separate categories: gains before and after July 23rd, 2024. This new separator aims to bring clarity to the game by making it crystal clear when each gain occurred. 🔢
Another noteworthy change is the green light for reporting capital loss incurred on share buybacks. Here's the catch, though – this blessing is only valid if the accompanying dividend income from these buybacks is declared under "income from other sources," and that applies for transactions taking place after October 1st, 2024. 💸
In addition to this, the updated form now includes a special call-out for section 44BBC of the Income Tax Act. Moreover, the Schedule-TDS requires the taxpayer to specify their Tax Deducted at Source (TDS) section code. 💕
In recent times, the Income Tax Department has been on a mission to streamline the filing processes, debuting the 'e-Pay Tax' feature on their official online portal to make life easier for us folks. And in case you missed it, back in July 2024, the government presented a comprehensive review proposal for the Income-tax Act of 1961, with the main purpose being to simplify the Act and decrease disputes and litigation. 📝
On March 25, Union Finance and Corporate Affairs Minister Nirmala Sitharaman shared exciting news: the new Income Tax Bill will soon be up for discussion in the upcoming monsoon session of Parliament. And don't forget, the government opened its virtual doors to feedback from stakeholders earlier this month, inviting suggestions for the newly proposed Income Tax Bill 2025. The current status: the Bill is undergoing detailed scrutiny by the Select Committee. 🗣️
Never a dull moment, right? Stay tuned for more updates on this evolving tax landscape! 👀💡💣
[Tip: If you need more deets on these changes, take a look at recent legislative amendments from the Finance Act, 2024, or check out the Income-tax Act of 1961. Feel free to get a deeper understanding of how these changes affect you!] 🌟📚📝
- Stakeholders might find it beneficial to familiarize themselves with the new capital gain reporting categories, as the ITR Form 5 for Assessment Year 2025-26, introduced by CBDT on May 1st, 2025, requires the reporting of capital gains to be divided into two separate categories: gains before and after July 23rd, 2024.
- Taxpayers can now report capital loss incurred on share buybacks, but only for transactions taking place after October 1st, 2024, provided the accompanying dividend income from these buybacks is declared under "income from other sources."
- In addition to these changes, the updated ITR Form 5 also includes a section for section 44BBC of the Income Tax Act and a requirement for the taxpayer to specify their Tax Deducted at Source (TDS) section code in the Schedule-TDS.
- As the government moves towards simplifying the Income-tax Act of 1961, it's worth noting that a new Income Tax Bill is currently undergoing detailed scrutiny by the Select Committee, with the aim of being discussed during the upcoming monsoon session of Parliament. The government also welcomed feedback from stakeholders earlier this month on the newly proposed Income Tax Bill 2025.
