CBDT announces new ITR-6 forms for AY 2025-26; what domestic, foreign companies should note

The Central Board of Direct Taxes (CBDT) has unveiled a new ITR-6 form for the 2025-26 Assessment Year, marking a significant shift in the way companies file their tax returns. The changes were detailed in a notification issued on May 6, 2025, under CBDT Notification No. 44/2025.

Several key adjustments have been made to how companies report their income and deductions in this updated form. This development is part of an ongoing effort to modernise India's tax system, facilitating easier compliance for businesses. 

ITR form 6

> The updated form is mandatory for all companies operating in India, both domestic and foreign, that do not claim exemptions under Section 11 of the Income Tax Act. Companies registered in India and liable for corporate tax must adhere to this new requirement, which takes effect on April 1, 2025.

> A significant revision in the capital gains tax regime has been implemented, dividing gains into pre and post-July 23, 2024, periods as per amendments in the Finance Act, 2024. This adjustment compels companies to update their tax computations in alignment with the new regulations introduced midway through the year.

> Another notable alteration permits companies to offset capital losses from share buybacks against dividend income categorized under "income from other sources" post October 1, 2024. This modification aims to bring clarity to firms involved in buyback transactions, a step expected to promote transparent financial reporting practices according to tax experts.

> The CBDT has recently introduced a presumptive taxation guideline for non-resident cruise ship operators under Section 44BBC. This rule stipulates that 20% of passenger carriage receipts should be considered as taxable profits for these operators.

> The revised ITR-6 form will replace its predecessor and will demand more comprehensive details from companies. It requires basic company information such as the Permanent Account Number (PAN), Corporate Identification Number (CIN), date of incorporation, and any changes to the company name. 

> Moreover, foreign companies vending uncut diamonds within specified special zones will henceforth be subject to the safe harbor provision (Rule 10TIA), necessitating a minimum profit margin of 4% on total revenues. This initiative, retroactively effective as of April 1, 2024, is designed to streamline transfer pricing within the diamond industry while ensuring adherence to regulations.

> Furthermore, an increased level of transparency is expected with the introduction of new reporting requirements, which include the obligatory divulgence of TDS section codes in Schedule-TDS and deductions claimed under Section 24(b) pertaining to home loans. This aligns with the government's emphasis on detailed income monitoring.

> Also, business details like the exact date of commencement of operations, registered office address, and updated contact information must be provided. Companies need to disclose their filing status, specifying under which section the return is filed, including any details of previous filings or tax notices received.

> The structured format of the new form is intended to streamline the process for tax officials, reducing the likelihood of errors that could lead to notices or penalties. This comprehensive approach helps in monitoring compliance more effectively, thereby aiding the tax authorities in verifying calculations and disclosures.

These changes are not merely procedural but reflect a broader goal of enhancing transparency and efficiency in tax administration. By collecting more specific data, the tax authorities aim to improve their understanding of business operations and compliance verification.  

To prepare for these changes, companies are advised to review their internal data systems to ensure the capability to collect all the required information. Updating record-keeping processes to capture the additional details and training accounting teams on the new requirements are essential steps. Engaging with tax professionals who specialise in corporate tax filing may also be beneficial to navigate the transition smoothly. This initiative is part of a larger government strategy to make tax administration more efficient and user-friendly, minimising the administrative burden on businesses. 

The Income Tax (I-T) Department has notified Income Tax Return (ITR) forms 1, 2, 3, 4, and 5. ITR Form-1 (sahaj) and ITR Form-4 (sugam) were released on April 29, 2025, followed by ITR Form 3 on April 30, 2025. Subsequently, ITR Form 5 was released on May 2, 2025, and Form 2 on May 3, 2025. These forms are intended for filing Income Tax Returns for the financial year 2024-25.

The deadline for submitting an income tax return for the financial year 2024-25 is July 31, 2025, for non-audit cases, and October 31 for audit cases.