The Central Board of Direct Taxes (CBDT) has notified a revised ITR-5 form for the Assessment Year 2026-27 through an official Gazette notification dated March 30, 2026. The changes have been introduced under the powers granted by the Income-tax Act, 1961, and will come into effect from March 31, 2026.
The revised form replaces the existing ITR-5 format and will apply to entities such as firms, LLPs, AOPs, BOIs and other taxpayers who are not required to file ITR-7.
Key Highlights of the New ITR-5 Form
1. Applicability and Effective Date
The updated ITR-5 form will be applicable for returns filed for AY 2026–27 onwards. It aligns with the latest amendments and reporting requirements introduced in recent years.
2. Enhanced Disclosure Requirements
The new form mandates detailed disclosures across various sections, including:
- Business details and nature of activities
- Partner/member information with ownership structure
- Audit-related disclosures and compliance reporting
- Financial statements including balance sheet and profit & loss account
3. Reporting on Tax Regime Selection
A major update is the inclusion of detailed reporting requirements regarding the choice between the old and new tax regimes. Taxpayers must now:
- Disclose whether they have opted for the new tax regime under Section 115BAC
- Provide details of Form 10-IEA/10-IE filing
- Clarify any switching between regimes in prior years
4. Expanded Compliance for Presumptive Taxation
Taxpayers opting for presumptive taxation schemes under sections such as 44AD, 44ADA, and others must provide additional disclosures regarding turnover thresholds and cash transactions.
5. Increased Focus on Financial Transparency
The revised form seeks granular reporting of:
- Cash and non-cash transactions
- Loans, advances, and investments
- Related party transactions
- MSME registration and startup recognition details
6. Audit and Reporting Enhancements
The new ITR-5 requires:
- Detailed audit report information
- Auditor credentials and report acknowledgment numbers
- Disclosure under various sections including transfer pricing and other statutory audits
Impact on Taxpayers
The revised ITR-5 form reflects the government's continued push towards greater transparency, digitization and data-driven tax compliance. While the changes aim to streamline reporting and improve accuracy, they may increase the compliance burden for taxpayers, especially small businesses and partnerships.
Tax professionals and entities are advised to carefully review the updated format and ensure the timely preparation of required documentation to avoid errors or penalties.
Click here to check the official copy of the notification
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