New Delhi: The Central Board of Direct Taxes (CBDT) has released Notification No. 42/2025, dated May 1st, 2025, introducing the new Income Tax Return (ITR) Form 5 for the Assessment Year 2025-26. The Income Tax Department highlighted several changes, including a split within Schedule-Capital Gain, which mandates taxpayers to report capital gains before and after July 23rd, 2024. The form now allows reporting capital losses from share buybacks, but this is conditional on declaring dividend income from these buybacks as "income from other sources" for transactions after October 1st, 2024. Additionally, ITR Form 5 includes a specific reference to section 44BBC of the Income Tax Act and requires specifying the Tax Deducted at Source (TDS) section code within Schedule-TDS.
Recently, the Income Tax Department introduced the ‘e-Pay Tax’ feature on its online portal to simplify various processes. The government also proposed a comprehensive review of the Income Tax Act of 1961 in the July 2024 Budget, aiming to make the Act more concise and reduce disputes and litigation. On March 25, Union Finance and Corporate Affairs Minister Nirmala Sitharaman announced that the new Income Tax Bill will be discussed in the monsoon session of Parliament. Earlier, on March 18, the government encouraged stakeholders to submit suggestions on the newly introduced Income Tax Bill 2025, which is currently under examination by the Select Committee for detailed consideration.
Reference : https://zeenews.india.com/personal-finance/cbdt-notifies-new-itr-form-5-for-2025-26-with-key-updates-2895017.html
