The Central Board of Direct Taxes (CBDT) has released the updated Income Tax Return Form ITR-6 for the Assessment Year (AY) 2025–26, effective from April 1, 2025. This change, brought about by Notification No. 44/2025 dated May 6, 2025, brings major changes according to the Finance Act, 2024 amendments. The ITR-6 form mainly applies to firms that do not claim benefits under Section 11 of the Income-tax Act, 1961, for income from property held for charitable or religious purposes.
Key Changes in ITR-6 for AY 2025–26
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Segregation of Capital Gains
New form ITR-6 requires a segregation of capital gains between two different periods:
- Before July 23, 2024: Firms must separately report the benefits availed before this date.
- On or after July 23, 2024: Firms must report income earned according to the new rules introduced by the Finance Act, 2024.
Such separation provides tax calculation clarity and uniformity with the revised tax provisions.
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Reporting of Capital Loss on Share Buybacks
For the transactions after October 1, 2024, companies can now report the capital loss on share buybacks if the matching dividend income is reported under Income from Other Sources. The amendment does not undervalue the tax liability calculation and brings a broader view of the activities of a company.
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Insertion of Section 44BBC for Cruise Business
A new reference to Section 44BBC now applies specifically to the cruise business industry. Firms operating cruise services must disclose their expenses and revenues under this section to ensure better sector-wise compliance and transparency.
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Amendments in Schedule BP (Business Profits)
As per Rule 10TIA, the new Schedule BP mandates business entities that deal in raw diamonds to report profits as a minimum of 4% of gross receipts. Profit reporting on a standardized basis seeks to simplify the reporting of profits and eliminate inconsistency in reporting income.
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Increased Reporting of Housing Loan Interest Deductions
The format now contains certain fields to record deductions made under Section 24(b) for interest on housing loans. The improvement ensures precise reporting of such deductions by firms so that proper tax computation and compliance with Income Tax Act provisions are maintained.
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Mandatory Disclosure of TDS Section Codes
Companies must now specify the exact Tax Deducted at Source (TDS) section codes in their respective schedules. This requirement improves clarity and supports accurate reconciliation of TDS credit, helping to avoid mismatches and disputes.
Implications for Companies
The new ITR-6 form is a response to the government’s efforts to increase tax compliance and make sure corporate entities present accurate and comprehensive financial information. The companies have to adapt to these changes so that they do not face punishment in case of default and are successful in Income Tax Return filing.
FAQs
- Who is obliged to file ITR-6?
Businesses, except those reporting income under Section 11 (revenue from assets held for charitable or religious purposes), must submit ITR-6.
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Why is capital gains segregation under the new ITR-6 important?
Segregation facilitates the reporting of capital gains that take place before and on and after July 23, 2024, based on the Finance Act, 2024 amendments, and allowing correct computation of tax.
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How will the addition of Section 44BBC affect cruise businesses?
Cruise industry organizations must now report their expenses and revenues under Section 44BBC to ensure industry-wide compliance and accurate financial disclosure.
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Why is the TDS section code disclosure mandatory now?
Mandatory TDS section code disclosure allows authorities to gain greater transparency, facilitate proper reconciliation of TDS credits, and reduce the risk of errors in tax records.
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How will businesses disclose profit on raw diamond sales under new Schedule BP?
Businesses dealing in raw diamonds must disclose profits in line with Rule 10TIA, ensuring that reported profits are not less than 4% of gross receipts and that they meet updated tax regulations.
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What are the most important changes in reporting interest on housing loan deductions in the new ITR-6?
The new ITR-6 form has improved fields under Section 24(b) for deducting interest on housing loans. Companies must also provide more detailed information to properly validate their claims and comply with current tax norms.
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Is the electronic filing of ITR-6 compulsory?
Yes, ITR-6 has to be filed online in digital signature mode as required by the Income-tax Department for companies. This guarantees authenticity, enhanced processing, and compliance with regulatory requirements.
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