On April 30, 2025, the Central Board of Direct Taxes (CBDT) released a revised version of ITR-5 via Notification No. 41/2025. This updated form will be used for Assessment Year 2025–26 and is part of the 13th Amendment to the Income-tax Rules, 1962. The changes are effective from April 1, 2025, and apply to certain categories of taxpayers, including LLPs, partnership firms, AOPs, and BOIs, but not individuals, HUFs, or companies.

The goal of this update is to promote transparency, increase tax compliance, and align the return filing process with recent legal and policy developments. Below is a simplified breakdown of what has changed and what taxpayers should be aware of.

Who Can File ITR-5?

The ITR-5 Form is designed for:

  • Limited Liability Partnerships (LLPs)

  • Partnership firms

  • Association of Persons (AOPs)

  • Body of Individuals (BOIs)

  • Artificial Juridical Persons
    Note: It is not applicable for individuals, HUFs, companies, or entities filing ITR-7.

Top 10 Key Changes in the Revised ITR-5 (AY 2025–26)

1. Reporting on Virtual Digital Assets (VDAs)

A new clause (7f) has been added to Schedule OI for reporting expenses related to income from VDAs (like cryptocurrencies) under Section 115BBH, excluding the acquisition cost.

2. Capital Gains Exemption – Year-Wise Disclosure

Schedule CG now mandates year-wise reporting of capital gains exemptions claimed under Sections 54D, 54G, and 54GA, along with related deposit details.

3. Form 16E Added for Business Trust Distributions

A new reference to Form 16E has been introduced to track income distribution by business trusts under Section 194LBA.

4. Audit Disclosures Expanded

Taxpayers must now provide more details if audit is applicable, such as:

  • Audit type (44AB, 92E)

  • Date of audit report

  • Auditor’s membership and firm registration numbers

5. Detailed Partner/Member Information

The updated form asks for more information about all admitted or retired partners/members, including:

  • PAN

  • Date of change

  • Share in profit/loss and capital

  • Remuneration, if any

6. Unlisted Shareholding Reporting Improved

For unlisted equity shares, you now have to mention:

  • Transaction dates

  • Face value

  • Cost of acquisition

  • Consideration received

7. Better TDS/TCS Reconciliation Format

Schedules for TDS and TCS have been redesigned to improve data reconciliation with Form 26AS and AIS.

8. Expanded Nature of Business Codes

Schedule BP now offers more specific codes to define business type and inventory classifications.

9. Reorganized Disallowance Reporting

Schedule OI has clearer instructions for reporting inadmissible expenses under Sections 36, 37, 40, 40A, and 43B.

10. Digital Verification Methods Unchanged

Audit cases still require Digital Signature Certificates (DSC), while others can use Aadhaar OTP or net banking for verification.

FAQs – Revised ITR-5 Form

Q1. Who should file the revised ITR-5 form?
A: Entities like LLPs, firms, AOPs, and BOIs not eligible to file ITR-1 to ITR-4 or ITR-7.

Q2. Is reporting on crypto transactions mandatory?
A: Yes, Schedule OI now requires details of VDA-related income and expenses.

Q3. What is Form 16E and why is it added?
A: It’s used to report income from business trusts (under Sec 194LBA) for TDS purposes.

Q4. Do I need to report unlisted share transactions?
A: Yes, complete transaction-level data is required, including cost and consideration.

Q5. Is audit information mandatory even for small firms?
A: Only if audit is applicable under Section 44AB or 92E. Then yes, full details are needed.

Conclusion

The revised ITR-5 Form for AY 2025–26 introduces detailed, structured reporting across several new areas — from digital assets to partner data and audit details. These updates aim to enhance tax transparency, reduce mismatches, and improve compliance accuracy.

Entities required to file ITR-5 should review these changes thoroughly and begin compiling necessary data early. Working with a qualified tax consultant or CA is strongly recommended to ensure smooth and error-free return filing.