The Central Board of Direct Taxes (CBDT) has notified the revised ITR-5 and ITR-6 forms for Assessment Year (AY) 2026–27, introducing several important compliance changes for firms, LLPs, associations, and companies. While many of the revisions aim to simplify reporting, they also increase the level of detail taxpayers must disclose, particularly in areas such as tax payments, Futures and Options (FandO) transactions, corporate restructuring, and digital compliance.

Another important aspect of this filing season is that although the Income Tax Act, 2025 has come into force for current operations, returns for AY 2026–27 (FY 2025–26) continue to be governed by the Income Tax Act, 1961. This makes AY 2026–27 a transitional year where taxpayers must remain careful about the provisions that apply while preparing their returns.

This guide explains the key changes introduced in ITR-5 and ITR-6, important due dates, and the practical steps businesses should take to ensure accurate and timely compliance.

Who Should File ITR-5?

Form ITR-5 applies to entities such as:

• Partnership Firms

• Limited Liability Partnerships (LLPs)

• Association of Persons (AOPs)

• Body of Individuals (BOIs)

• Artificial Juridical Persons

• Business trusts and investment funds where applicable

Individual taxpayers and companies do not file ITR-5.

Who Should File ITR-6?

Form ITR-6 is meant for companies that are not claiming exemption under Sections relating to charitable or religious purposes.

Most private limited companies, public limited companies, and other taxable corporate entities are required to file this return.

Major Changes Applicable to Both ITR-5 and ITR-6

Before looking at the individual forms, businesses should understand three important changes that affect almost all non-individual taxpayers.

1. AY 2026–27 Continues Under the Income Tax Act, 1961

Although the Income Tax Act, 2025 became operational from 1 April 2026, returns for AY 2026–27 must still be filed under the Income Tax Act, 1961.

This transitional arrangement ensures continuity for income earned during FY 2025–26 and provides taxpayers sufficient time to adapt to the new legislative framework.

2. Extended Timeline for Revised Returns

Taxpayers now have a longer window to revise their returns.

A revised return can be filed up to 31 March 2027, providing additional time to correct genuine errors.

However, there is an important condition.

Any revised return filed after 31 December 2026 attracts the applicable late fee, and new reporting fields have been added to capture this information.

3. Protection for Loss Carry Forward

Businesses reporting eligible business losses or capital losses within the prescribed timelines for AY 2026–27 can continue carrying those losses forward into the new tax regime.

This provides certainty during the transition from the Income Tax Act, 1961 to the Income Tax Act, 2025.

Key Changes in ITR-5

The revised ITR-5 introduces several structural improvements aimed at improving transparency and reducing mismatches between taxpayer disclosures and the Income Tax Department's records.

1. Separate Reporting for Futures and Options (FandO) Transactions

One of the biggest changes affects taxpayers engaged in Futures and Options (FandO) trading.

Earlier, many businesses reported trading income together.

The revised Schedule Part A – Trading Account now requires taxpayers to separately disclose:

• FandO turnover

• Absolute gross income from FandO

• Other business trading income

This segregation enables the Income Tax Department to analyse speculative and non-speculative business transactions more accurately.

2. Simplified Capital Gains Reporting

The CBDT has simplified capital gains reporting by removing multiple transitional reporting fields that previously required taxpayers to split gains based on different legislative timelines.

This change makes Schedule CG easier to complete while reducing unnecessary complexity during return preparation.

3. More Detailed Tax Payment Reporting

Businesses can no longer rely on summary information while reporting tax payments.

The revised Schedule-IT now requires taxpayers to provide detailed information for every tax payment, including:

• BSR Code

• Challan Serial Number

• Date of Payment

This additional level of reporting helps reduce mismatches between the return and records available in Form 26AS and the Annual Information Statement (AIS).

4. Mandatory Secondary Contact Details

To improve communication between taxpayers and the Income Tax Department, ITR-5 now requires additional contact information, including:

• Alternate mobile number

• Backup email address

• Secondary correspondence address

These additional communication details help reduce the possibility of taxpayers missing important notices or departmental communications.

5. Enhanced Business Information

The revised ITR-5 also seeks more detailed information regarding:

• Partner remuneration

• Interest paid to partners

• Capital contributions

• Changes in partnership structure

• Nature of business operations

These disclosures provide greater transparency and improve consistency between tax returns and statutory records.

Key Changes in ITR-6 for AY 2026–27

The revised ITR-6 places greater emphasis on transparency, digital reporting, and detailed disclosures for corporate taxpayers.

Companies should carefully review these changes before preparing their returns to avoid mismatches and notices.

1. Greater Focus on Digital Economy Reporting

Companies that have international transactions or a digital business presence in India will now have to provide more detailed disclosures relating to their Significant Economic Presence (SEP).

The revised form requires reporting of:

• Aggregate transaction values

• Number of Indian users

• Digital business presence, where applicable

These disclosures strengthen the Income Tax Department's ability to monitor taxation of digital businesses operating in India.

2. Revised Reporting for Buyback Transactions

Companies involved in share buybacks must now furnish more detailed information regarding:

• Number of shares bought back

• Buyback consideration

• Premium paid

• Tax computation under the applicable provisions

The objective is to improve transparency around corporate buyback transactions and ensure consistent tax reporting.

3. Enhanced Reporting for Corporate Restructuring

The revised ITR-6 also seeks additional disclosures relating to corporate restructuring events such as:

• Mergers

• Demergers

• Shareholding changes

• Changes in directors

• Other structural reorganizations

Providing complete and accurate information helps the Income Tax Department reconcile tax implications arising from these transactions.

4. Mandatory MAT Credit Sequencing

Companies claiming Minimum Alternate Tax (MAT) credit must now report the sequence of utilization more clearly.

This change aims to reduce disputes and mismatches while claiming MAT credit against regular tax liabilities.

5. Startup and DPIIT Recognition Details

Eligible startups claiming benefits must disclose:

• DPIIT Recognition Number

• Inter-Ministerial Board (IMB) certification, wherever applicable

• Relevant Form-2 information

These disclosures help validate eligibility for startup-related tax incentives.

6. IFSC and Foreign Investor Reporting

The revised form also introduces additional reporting requirements for companies that:

• Operate from an International Financial Services Centre (IFSC)

• Earn income exclusively in foreign exchange

• Are registered as Foreign Institutional Investors (FIIs) or Foreign Portfolio Investors (FPIs)

Such entities may also be required to furnish their SEBI registration details.

7. Representative Assessee Details

Where the return is being signed by an authorized representative instead of the company's principal officer, the revised ITR-6 now captures additional information relating to the representative assessee.

This improves accountability and strengthens the return verification process.

Important Due Dates for AY 2026–27

Meeting statutory deadlines is essential to avoid interest, penalties, and the loss of certain tax benefits.

Common Mistakes Businesses Should Avoid

Even experienced taxpayers can make errors while filing ITR-5 and ITR-6.

Some of the most common mistakes include:

Ignoring New Disclosure Requirements

Many taxpayers continue using last year's checklist and miss newly introduced reporting fields.

Incorrect FandO Reporting

Businesses engaged in Futures and Options trading should ensure FandO income is reported separately instead of combining it with other business income.

Incomplete Challan Information

Missing or incorrect BSR Codes, challan serial numbers, or payment dates may result in tax credit mismatches.

Missing Filing Deadlines

Late filing can lead to:

• Interest

• Late filing fees

• Penalties

• Delays in processing refunds

• Additional compliance notices

Assuming the New Income Tax Act Applies

Although the Income Tax Act, 2025 is now operational, AY 2026–27 returns continue to be governed by the Income Tax Act, 1961.

How Technology Can Help

Managing return preparation today involves much more than simply filling forms.

Accounting firms often need to:

• Track multiple client deadlines

• Collect financial documents

• Monitor audit status

• Follow up for missing information

• Maintain tax payment records

• Coordinate return filing across multiple team members

Managing these activities manually becomes increasingly difficult as the number of clients grows.

A centralized practice management platform helps accounting firms stay organized while reducing manual effort.

Frequently Asked Questions

1. Who should file ITR-5?

ITR-5 is generally applicable to LLPs, partnership firms, AOPs, BOIs, and certain other non-individual entities.

2. Who should file ITR-6?

Companies that are not claiming exemption under charitable or religious provisions generally file ITR-6.

3. Does AY 2026–27 fall under the new Income Tax Act?

No. Returns for AY 2026–27 continue to be governed by the Income Tax Act, 1961.

4. What is the biggest change in ITR-5?

Separate disclosure of Futures and Options transactions and more detailed tax payment reporting are among the major changes.

5. Can businesses revise their return after 31 December 2026?

Yes. Returns may be revised up to 31 March 2027, although revised returns filed after 31 December 2026 attract the applicable late fee.

Key Takeaways

• AY 2026–27 continues to be governed by the Income Tax Act, 1961.

• ITR-5 introduces separate reporting for FandO transactions and more detailed tax payment disclosures.

• ITR-6 strengthens reporting requirements relating to corporate restructuring, buybacks, startups, and digital businesses.

• Revised returns can now be filed until 31 March 2027, subject to applicable late fees.

• Timely preparation and accurate disclosures can help businesses avoid notices, penalties, and processing delays.

A quick reminder: This guide is intended to simplify the key changes in ITR-5 and ITR-6 for AY 2026–27. If you're ever in doubt about a specific provision or its interpretation, always refer to the latest provisions of the Income-tax Act, applicable Rules, CBDT notifications, circulars, and official guidance. These should always be your final point of reference.