Latest Income Tax Return (ITR) Forms update

Latest Income Tax Return (ITR) Forms update for the financial Year 2025-26

These updates in the ITR forms for FY 2025-26 aim to simplify the tax filing process, enhance transparency, and ensure compliance with evolving tax regulations. Make sure to incorporate these changes while preparing your ITR to avoid any discrepancies and ensure accurate reporting. Share this information with peers to help them navigate the updated tax filing process effectively.

Below mention are detailed breakdown of the key changes:

• Taxpayer required to report Dividend Income Reporting: dividend income received from a unit in an International Financial Service Centre shall be taxed at a reduced tax rate of 10% instead of 20%. Schedule OS has been amended in new Income tax return forms to incorporate such change in Form ITR 2, 3, 5 and 6
• Income tax Filing Deadlines: Taxpayers now have a new column in income tax Forms ITR 3, 5 and 6 where they specify the deadline for filing income returns.
• Taxpayer required to report Employee Stock Option Plans Tax Benefits: Enhanced reporting requirements for ESOPs required to disclosure of Permanent Account Number & Department for Promotion of Industry and Internal Trade Registration Numbers in Form ITR 2and 3.
• You required to update on Adjustment of Unabsorbed Depreciation: The new provisions allow for the adjustment of unabsorbed depreciation in Form ITR 3 and 5.
• Deduction under Section 80CCH for Agniveer Corpus Fund : A new column is introduced to claim deductions under Section 80CCH for Agniveer Corpus Fund in Form ITR 1, 2, 3 and 4.
• Taxpayer required to report Cash Receipts Reporting: A new column for cash receipts reporting has been added to claim an enhanced turnover limit in Form ITR 3, 4 and 5.
• Taxpayer required additional reporting on maintenance and medical treatment of dependents with disabilities in Schedule 80DD: Similar to Schedule 80U, Schedule 80DD is added to claim deductions for maintenance and medical treatment of dependents with disabilities in Form ITR 2 & 3.
• Income tax Capital Gains Accounts Scheme Reporting: Detailed disclosure of deposits in the CGAS Scheme is now required in Form ITR 2, 3, 5 and 6.
• You are needed to report on Start-up Deduction Details: New Schedules for claiming deductions under Sections 80-IAC & 80LA have been introduced in Form ITR 5 and 6.
• Taxpayer required to report Legal Entity Identifier Details: LEI disclosure is now Compulsory for income tax refunds exceeding Rs. 50,00,00,000/- in Form ITR 2, 3, 5 and 6.
• Now Taxpayer can verify tax audit via use of Electronic Verification Code: Individuals & HUFs under tax audits (ITR 3) can now verify returns using EVC. This simplifies the verification process & enhances ease of income tax compliance.
• Now Taxpayer required to report Reasons for Tax Audit: Additional details are required from audited companies in Form ITR 3, 5 & 6 regarding the circumstances necessitating tax audits. This change enhances transparency and accountability in tax reporting the circumstances necessitating tax audits.
• Online Gaming Winnings Taxation: Schedule OS has been amended to include reporting of income from online gaming in form ITR 2, 3, 5 & 6.
• Taxpayer now report on Business Trust Sums : A new column under Schedule OS additionally added to allows for reporting sums received by unitholders distributed by business trust to avoid non-taxation in Form ITR 2, 3 & 5.
• Taxpayer required to report Contributions to Political Party: Schedule 80GGC will require detailed disclosure of political party contributions in Form ITR 2, 3, 5 & 6.
• Assesses report on all the Bank Account Disclosure: Taxpayers compulsory disclose all bank his accounts held, except dormant accounts in Form ITR 2, 3 & 5.
• New Schedule 80U for reporting who claiming disabilities: Schedule 80U is added for claiming deductions for persons with disabilities, seeking detailed information in Form ITR 3.

All the above changes & updates purpose to simplify income tax reporting, enhance transparency, & align with evolving income tax regulations. Save this comprehensive overview for future reference and share it with your peers to help them navigate the tax filing process effectively.

Stock Market Taxation in India: Quick Summary (FY 2025-26 | AY 2026-27)

Correct classification of trading and investment income is crucial for accurate ITR filing, proper loss set-off, and avoiding tax notices or penalties. It summarizes how different types of stock market transactions are taxed and how losses can be adjusted.

Intraday Equity Trading

• Treated as Speculative Business Income.
• Taxed at your normal slab rates.
• Loss can be set off only against speculative profits.
• Loss can be carried forward for 4 Assessment Years.
• Example: Buy and sell shares on the same day without taking delivery.

Futures & Options (F&O)

• Treated as Non-Speculative Business Income.
• Taxed at normal slab rates.
• Loss can be adjusted against any business income (subject to tax provisions).
• Loss can be carried forward for 8 Assessment Years.
• F&O profit/loss is business income, not capital gains.

Equity STCG (Section 111A)

• Applies when listed equity shares/equity-oriented mutual funds are sold within the short-term holding period.
• Tax Rate: 20%.
• STCL (Short-Term Capital Loss) can be set off against both STCG and LTCG.
• Loss can be carried forward for 8 Assessment Years.

Equity LTCG (Section 112A)

• Applies to long-term gains on listed equity shares and equity-oriented mutual funds.
• Tax Rate: 12.5% after the first ₹1.25 lakh of gains in a financial year.
• LTCL (Long-Term Capital Loss) can be adjusted only against LTCG.
• Loss can be carried forward for 8 Assessment Years.

Other Capital Assets – STCG

• Taxed at normal slab rates unless a special provision applies.
• STCL can be set off against both STCG and LTCG.
• Carry forward allowed for 8 Assessment Years.

Debt Mutual Funds – Section 50AA : 

Special taxation for specified debt mutual funds:

• Always treated as Short-Term Capital Gains (STCG) irrespective of the holding period.
• Taxed at normal slab rates. : No LTCG treatment, no 12.5% concessional LTCG rate. And no indexation benefit.
• STCL can be adjusted against STCG and LTCG.
• Losses can be carried forward for 8 assessment years.

Memory Formula

• Intraday = Speculative Business = 4 Years Carry Forward
• F&O = Non-Speculative Business = 8 Years Carry Forward
• Equity STCG = 20%
• Equity LTCG = 12.5% after ₹1.25 lakh exemption
• STCL → Set off against STCG + LTCG
• LTCL → Set off only against LTCG

Common Mistakes to Avoid

• Treating F&O losses as capital losses: F&O losses are business losses.
• Treating intraday profits as STCG: Intraday income is speculative business income.
• Assuming debt mutual funds become LTCG after a long holding period. : Specified Debt Mutual Funds under Section 50AA are always taxed as STCG.
• Assuming all capital losses can be adjusted interchangeably: LTCL can only be set off against LTCG.

Can updating ITR cost you more than a reassessment?

Which is Better- Old vs New Tax Regime Comparison 2026 ?

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