Complete ITR Filing Guide for AY 2026-27: Form Selection, Due Dates, Tax Regime Choice, Rebates and Disclosure Mapping

 By CA Surekha Ahuja

Every filing season brings the same two questions to a CA's desk:

• Which ITR form applies to this client?
• Where exactly does each transaction get reported in the return?

This guide answers both questions comprehensively—from selecting the correct ITR form to mapping property transactions, investments, gifts, foreign assets, and capital gains into the appropriate schedules, together with the applicable tax slabs, rebate provisions, filing deadlines, and practical compliance checkpoints for AY 2026-27.

Executive Summary

This guide provides a practical roadmap for filing income-tax returns for AY 2026-27. It explains:

• Which ITR form should be used in different situations.
• When ITR-1 becomes unavailable despite income being below ₹50 lakh.
• How the new tax regime and section 87A rebate operate.
• Which schedules are relevant for property transactions, investments, gifts, and foreign assets.
• The key compliance checks that can help avoid notices and defective-return proceedings.

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1. Master ITR Form Selection Matrix

Choosing the wrong ITR form is one of the most common reasons for defective returns under section 139(9). The table below is the practical starting point for every filing.

Form	Who can use it?	Cannot be used if...	Due Date (Non-Audit)	Due Date (Audit)
ITR-1 (Sahaj)	Resident individuals with salary/pension, up to 2 house properties, other sources, agricultural income up to ₹5,000, LTCG under section 112A up to ₹1.25 lakh, total income up to ₹50 lakh	NRI/RNOR, business income, any STCG, LTCG exceeding ₹1.25 lakh, 3 or more house properties, foreign assets/income, directorship, unlisted shares, carry-forward loss, income exceeding ₹50 lakh, lottery income, agricultural income above ₹5,000	31 July 2026	Not Applicable
ITR-2	Individuals/HUFs with salary, house property, capital gains, foreign assets, NRI income, directorship, unlisted shares, or income exceeding ₹50 lakh	Business or profession income	31 July 2026	Not Applicable
ITR-3	Individuals/HUFs having business or profession income, including partners in firms and freelancers	No business/profession income at all	31 August 2026	31 October 2026
ITR-4 (Sugam)	Resident individuals, HUFs and firms (other than LLPs) under presumptive taxation under sections 44AD/44ADA, with income up to ₹50 lakh	NRI, LLP, capital gains, foreign assets, directorship, unlisted shares, 3 or more house properties, carry-forward loss, turnover beyond prescribed limits	31 August 2026	Not Applicable
ITR-5	Firms, LLPs, AOPs, BOIs, co-operative societies and local authorities	Individuals, HUFs, companies and charitable entities	31 August 2026	31 October 2026
ITR-6	Companies other than those claiming exemption under section 11	Companies claiming exemption under section 11	31 October 2026	31 October 2026
ITR-7	Trusts, institutions, political parties, educational and medical institutions claiming exemption	Regular individuals, firms or companies not eligible for ITR-7	31 October 2026	31 October 2026

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2. Salaried Individual Decision Matrix

For salaried taxpayers, one additional fact often changes the entire form selection.

Scenario	Correct Form
Salary ₹45 lakh, 1 house property, no capital gains	ITR-1
Salary ₹48 lakh, 2 house properties, no capital gains	ITR-1
Salary ₹48 lakh, 3 house properties	ITR-2
Salary ₹45 lakh, STCG from shares of ₹50,000	ITR-2
Salary ₹45 lakh, LTCG of ₹1.50 lakh	ITR-2
Salary ₹45 lakh, foreign RSUs worth ₹10,000	ITR-2
NRI with salary income in India	ITR-2
Company director with salary income	ITR-2
Salary ₹45 lakh with business income from freelancing	ITR-3 / ITR-4
Salary ₹75 lakh, no business income	ITR-2

Quick Rule: Income below ₹50 lakh alone does not make a taxpayer eligible for ITR-1. The presence of any business income, foreign asset or foreign income, directorship, unlisted shareholding, STCG, carry-forward loss, NRI/RNOR status, or more than two house properties generally requires migration to another ITR form.

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3. Override Rules That Change the Form Immediately

These are the "one-condition changes everything" rules:

• 3 or more house properties → ITR-2
• Any short-term capital gain (STCG) → ITR-2
• LTCG under section 112A above ₹1.25 lakh → ITR-2
• Any foreign asset or foreign income → ITR-2
• Company director → ITR-2
• Holding unlisted equity shares → ITR-2
• Brought-forward or carry-forward loss → ITR-2
• Any business/profession income → ITR-3 or ITR-4
• NRI or RNOR status → ITR-2 or ITR-3

Important: Even where the taxpayer owns only one or two house properties, the existence of a brought-forward or carry-forward house-property loss generally necessitates filing ITR-2 instead of ITR-1.

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4. New Regime Tax Slabs for FY 2025-26 (AY 2026-27)

The new regime under section 115BAC continues as the default tax regime.

Taxable Income	Rate
Up to ₹4,00,000	Nil
₹4,00,001 – ₹8,00,000	5%
₹8,00,001 – ₹12,00,000	10%
₹12,00,001 – ₹16,00,000	15%
₹16,00,001 – ₹20,00,000	20%
₹20,00,001 – ₹24,00,000	25%
Above ₹24,00,000	30%

Note: Health and Education Cess at 4% is payable on the final tax liability after considering rebate, surcharge and marginal relief, wherever applicable.

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5. Section 87A Rebate — Why ₹12 Lakh Can Be Tax-Free

Under the new regime, the section 87A rebate can reduce tax to zero for eligible taxpayers having taxable income up to ₹12 lakh.

Total Income	Tax Before Rebate	Rebate under Section 87A	Final Tax
₹7,00,000	₹15,000	₹15,000	Nil
₹12,00,000	₹60,000	₹60,000	Nil
₹12,50,000	₹67,500	Marginal relief applies	₹50,000
Above approximately ₹12,70,588	Full slab tax	Not available	Full tax

Marginal Relief Explained Simply

If your income is just above ₹12 lakh, the tax payable cannot exceed the amount by which the income exceeds ₹12 lakh. This prevents a sudden tax jump merely because the threshold has been crossed.

Practical Takeaway: For eligible taxpayers under the new tax regime, taxable income up to ₹12 lakh can result in a nil tax liability because the rebate under section 87A offsets the tax computed under the slab rates. Marginal relief further ensures a gradual transition immediately above the threshold.

Important Note: The availability and quantum of rebate should always be examined separately where income taxable at special rates, such as certain capital gains, is involved, as specific statutory restrictions may apply.

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6. Old Regime Exemption Limits by Age

Age Category	Basic Exemption Limit
Below 60 Years	₹2,50,000
Senior Citizen (60–80 Years)	₹3,00,000
Super Senior Citizen (80 Years and Above)	₹5,00,000

The old regime also permits deductions and exemptions such as section 80C, section 80D, HRA and home-loan interest, which may make it more beneficial in many cases.

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7. New vs Old Regime — Practical Decision Matrix

Income	Deductions Claimed	Generally Better Regime
₹10,00,000	Nil	New Regime
₹12,00,000	Nil	New Regime
₹15,00,000	₹2,00,000 deductions	Old Regime
₹20,00,000	₹5,00,000 deductions plus HRA	Old Regime
₹50,00,000	Significant deductions and exemptions	Old Regime

General Rule: The new regime typically benefits taxpayers with limited deductions, whereas the old regime often becomes advantageous when total deductions and exemptions exceed approximately ₹2 lakh, particularly where HRA and housing-loan benefits are available.

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8. Due Dates for AY 2026-27

Primary Filing Deadlines

Taxpayer Category	Form	Due Date
Individuals/HUFs without business income	ITR-1 / ITR-2	31 July 2026
Business/Profession (Non-Audit Cases)	ITR-3 / ITR-4	31 August 2026
Audit Cases under Section 44AB	Applicable ITR	31 October 2026
Transfer Pricing Cases (Form 3CEB)	Applicable ITR	30 November 2026

Secondary Deadlines

Return Type	Due Date
Belated Return under Section 139(4)	31 December 2026
Revised Return under Section 139(5)	31 March 2027
Updated Return (ITR-U)	31 March 2028

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9. Property, Investment and Gift Disclosure Mapping

A. Property Transactions

Transaction	Schedule	Applicable Forms
Self-occupied house property	Schedule HP	ITR-1 / ITR-2 / ITR-3 / ITR-4
Let-out property	Schedule HP	ITR-1 / ITR-2 / ITR-3 / ITR-4
Sale of land or property	Schedule CG	ITR-2 / ITR-3
Land held as investment and not sold	No specific disclosure	Not Applicable

Important Clarification: Merely purchasing a property during the year does not, by itself, create a separate reporting requirement in the income-tax return. Disclosure generally arises through Schedule HP, Schedule AL, interest-deduction claims or Schedule CG where income, asset-reporting, deduction or capital-gain implications exist.

B. Investment Income and Gains

Investment	Income Type	Schedule
Fixed Deposits	Interest Income	Schedule OS
Equity Mutual Funds	Dividend / Capital Gains	Schedule OS / Schedule CG
Equity Shares	Dividend / STCG / LTCG	Schedule OS / Schedule CG / Schedule 111A / Schedule 112A
Virtual Digital Assets (Crypto)	Income taxable under applicable VDA provisions	Relevant schedules as applicable

C. Gifts under Section 56(2)(x)

Type of Gift	Taxability	Reporting Schedule
Cash gifts exceeding ₹50,000 from non-relatives	Taxable	Schedule OS
Immovable property received without or for inadequate consideration	Taxable, subject to statutory conditions	Schedule OS
Gift from specified relatives	Exempt	Schedule EI
Marriage gifts	Exempt	Schedule EI
Inheritance / Will	Exempt	Schedule EI

Good Compliance Practice: Although exempt gifts may not always trigger a tax liability, appropriate disclosure in Schedule EI, along with adequate documentation regarding the donor, relationship and nature of the gift, helps avoid future queries and strengthens the taxpayer's position during assessment proceedings.

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10. Key Schedules at a Glance

Schedule	Purpose
Schedule HP	House Property Income
Schedule OS	Interest, Dividend, Taxable Gifts and Other Sources Income
Schedule CG	Capital Gains
Schedule 111A	Equity STCG Taxable under Section 111A
Schedule 112A	Equity LTCG Taxable under Section 112A
Schedule EI	Exempt Income and Exempt Gifts
Schedule FA	Foreign assets, foreign income, foreign bank accounts, foreign equity holdings, foreign custodial accounts and foreign signing-authority disclosures, wherever applicable
Schedule AL	Assets and Liabilities disclosure where applicable

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AIS–TIS Reconciliation Is No Longer Optional

Before filing the return, taxpayers should reconcile the reported income with:

• Form 26AS
• Annual Information Statement (AIS)
• Taxpayer Information Summary (TIS)

Mismatches relating to interest income, securities transactions, mutual fund redemptions, property transactions, foreign remittances or TDS credits frequently result in compliance communications from the Income Tax Department. Reconciling these statements before filing is significantly easier than responding to notices later.

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11. Final 15-Point Verification Checklist

Before filing any return, verify the following:

✓ Correct ITR form selected.

✓ Residential status verified.

✓ Business income appropriately identified.

✓ Capital gains correctly reported.

✓ Foreign assets and foreign income disclosed, where applicable.

✓ Directorship status examined.

✓ Unlisted shareholding checked.

✓ Number of house properties verified.

✓ Carry-forward losses identified.

✓ Income threshold conditions reviewed.

✓ Agricultural income limits verified.

✓ Appropriate tax regime selected.

✓ TDS reconciled with Form 26AS, AIS and TIS.

✓ Bank-account disclosures completed.

✓ Return preview reviewed before e-verification.

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Final Word

For AY 2026-27, the most common filing mistakes continue to be:

• Using ITR-1 despite disqualifying conditions.
• Ignoring Schedule FA where foreign assets or foreign income exist.
• Missing disclosures relating to gifts and exempt receipts.
• Choosing a tax regime without comparative computation.
• Filing returns without reconciling AIS, TIS and Form 26AS.

A correctly selected ITR form is the foundation of a valid income-tax return. Even where income has been correctly computed and taxes have been duly paid, an incorrect form selection or incomplete disclosure can result in defective-return proceedings, denial of claims, additional compliance costs and avoidable litigation.

The safest filing approach is simple:

1. Select the correct ITR form.
2. Compare both tax regimes before choosing one.
3. Reconcile income with AIS, TIS and Form 26AS.
4. Map every transaction to the correct schedule.
5. Complete a final compliance review before e-verification.

A few additional minutes spent on form selection, disclosure mapping and reconciliation can prevent months of correspondence with the tax department later.

LTCG under Section 112A after Finance Act 2025: Computation, Basic Exemption Limit, Surcharge, Tax Planning and ITR Reporting for AY 2026-27

 By CA Surekha S. Ahuja

New Tax Regime | AY 2026-27 (FY 2025-26)

Introduction

Part 1 examined the legal framework governing Long-Term Capital Gains taxable under Section 112A and clarified the position following Finance Act 2025 that the enhanced rebate under Section 87A cannot be used to reduce tax payable on such gains.

Once that position is understood, the more important questions become practical.

How should Section 112A gains be computed?

How does the Basic Exemption Limit interact with Long-Term Capital Gains?

What benefits continue to remain available despite the Finance Act 2025 amendment?

What planning opportunities remain permissible within the law?

How should such gains be reported in the Income Tax Return?

This article addresses these practical aspects.

Five Numbers Every Investor Should Know

Particulars	FY 2025-26
Basic Exemption Limit under New Regime	₹4,00,000
Annual Exemption under Section 112A	₹1,25,000
Tax Rate under Section 112A	12.5%
Maximum Surcharge on Section 112A Tax	15%
Maximum Effective Tax Burden on Section 112A Gains	Approximately 14.95%

These five numbers drive most Section 112A computations.

The Most Important Provision Investors Often Miss

While most discussions focus on the 12.5% tax rate and the annual exemption of ₹1.25 lakh, an equally important provision is often overlooked.

Before the special rate under Section 112A is applied, the law requires consideration of the Basic Exemption Limit.

Statutory Provision

The first proviso to Section 112A(2) provides:

"Where the total income as reduced by such long-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such long-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax."

Legislative Intent and Interpretation

The purpose of the proviso is simple.

A taxpayer should not lose the benefit of the Basic Exemption Limit merely because a portion of the income consists of Long-Term Capital Gains taxable under Section 112A.

Accordingly, the law requires a comparison between:

• The Basic Exemption Limit; and
• The taxpayer's income excluding the Long-Term Capital Gains taxable under Section 112A.

Where such income is below the Basic Exemption Limit, the amount of the shortfall must first be reduced from the Long-Term Capital Gains before the special rate under Section 112A is applied.

Only thereafter is the annual exemption of ₹1,25,000 under Section 112A considered.

What the Provision Does Not Mean

The proviso does not create a separate deduction.

It does not provide an additional exemption.

It does not automatically permit every taxpayer to reduce Long-Term Capital Gains by ₹4 lakh.

The relief is available only to the extent that income excluding Long-Term Capital Gains falls short of the Basic Exemption Limit.

Where income chargeable at normal rates already equals or exceeds the Basic Exemption Limit, no benefit remains available under this proviso.

Practical Illustration

Assume a resident individual has:

• Salary Income: ₹2,50,000
• Long-Term Capital Gains taxable under Section 112A: ₹6,00,000

Step 1 – Determine the Shortfall in the Basic Exemption Limit

Particulars	Amount (₹)
Basic Exemption Limit under New Regime	4,00,000
Income excluding LTCG	2,50,000
Shortfall	1,50,000

Since the income excluding Long-Term Capital Gains is below the Basic Exemption Limit, the shortfall of ₹1,50,000 becomes eligible for adjustment under the first proviso to Section 112A(2).

Step 2 – Reduce the Shortfall from LTCG

Particulars	Amount (₹)
LTCG under Section 112A	6,00,000
Less: Adjustment under first proviso to Section 112A(2)	(1,50,000)
Balance LTCG	4,50,000

Step 3 – Apply the Annual Exemption under Section 112A

Particulars	Amount (₹)
Balance LTCG	4,50,000
Less: Annual Exemption under Section 112A	(1,25,000)
Taxable LTCG	3,25,000

Step 4 – Compute Tax

Particulars	Amount (₹)
Taxable LTCG	3,25,000
Tax @ 12.5%	40,625
Health and Education Cess @ 4%	1,625
Total Tax Liability	42,250

Understanding How Much LTCG Can Escape Tax

A common oversimplification is that ₹5.25 lakh of Long-Term Capital Gains is always tax-free.

That is not what the law provides.

The amount of LTCG that escapes tax depends on the extent to which the Basic Exemption Limit remains unutilised.

Income Excluding LTCG	Shortfall in Basic Exemption Limit	Section 112A Exemption	Total LTCG Escaping Tax
Nil	₹4,00,000	₹1,25,000	₹5,25,000
₹1,00,000	₹3,00,000	₹1,25,000	₹4,25,000
₹2,50,000	₹1,50,000	₹1,25,000	₹2,75,000
₹4,00,000 or more	Nil	₹1,25,000	₹1,25,000

Thus, the benefit under the first proviso to Section 112A(2) gradually reduces as income chargeable at normal rates increases.

Benefits That Continue To Remain Available

Annual Exemption of ₹1.25 Lakh

The first ₹1,25,000 of eligible Long-Term Capital Gains continues to remain exempt every financial year.

Unlike the rebate under Section 87A, this exemption is not linked to any income threshold and remains available irrespective of the taxpayer's income level.

Grandfathering Continues

For eligible equity investments acquired before 31 January 2018, the grandfathering provisions introduced when Section 112A was enacted continue to apply.

Accordingly, appreciation accrued up to 31 January 2018 remains protected in accordance with the statutory computation mechanism.

No Change in Indexation Position

Section 112A continues to tax gains without the benefit of indexation.

Surcharge Cap Continues

The surcharge on tax attributable to gains under Section 112A continues to remain capped at 15%.

Why the Surcharge Cap Matters

A taxpayer with very high ordinary income may otherwise be exposed to surcharge rates of up to 37%.

However, tax attributable to Long-Term Capital Gains taxable under Section 112A continues to enjoy a statutory surcharge ceiling of 15%.

As a result, the effective tax burden on such gains remains substantially lower than the maximum rate applicable to ordinary income.

Tax Planning Opportunities Within the Law

Annual Exemption Utilisation

The annual exemption of ₹1.25 lakh under Section 112A resets every financial year.

Investors may consider periodic review of their portfolios to ensure efficient utilisation of the available exemption.

Low-Income Years

Years involving retirement, sabbaticals, business losses, career transitions or temporary reduction in income may allow greater utilisation of both:

• The Basic Exemption Limit; and
• The annual exemption under Section 112A.

Capital Loss Management

Long-Term Capital Losses may be adjusted against eligible Long-Term Capital Gains in accordance with the provisions governing capital gains.

Proper utilisation of carried-forward losses can significantly reduce future tax liability.

Financial Year-End Review

A year-end review of gains, losses, holding periods and exemption utilisation remains one of the most effective tax planning exercises available to long-term investors.

Important Clarifications for Investors and Taxpayers

Rebate Eligibility and LTCG Taxation Are Two Different Concepts

A taxpayer may satisfy the conditions for rebate under Section 87A and yet remain liable to pay tax on Long-Term Capital Gains taxable under Section 112A.

Eligibility for rebate and computation of LTCG tax operate independently under the Act.

The Basic Exemption Limit Does Not Automatically Reduce LTCG

The benefit under the first proviso to Section 112A(2) arises only where income excluding Long-Term Capital Gains falls below the Basic Exemption Limit.

Once income chargeable at normal rates equals or exceeds the Basic Exemption Limit, no relief is available under the proviso.

The Annual Exemption of ₹1.25 Lakh Is Available Regardless of Income Level

Unlike the rebate under Section 87A, the annual exemption under Section 112A is not linked to income thresholds.

The exemption remains available even where the taxpayer's income runs into several crores.

Chapter VI-A Deductions Do Not Reduce Section 112A Gains

Deductions available under Sections 80C, 80D, 80G and other provisions of Chapter VI-A do not reduce Long-Term Capital Gains taxable under Section 112A.

The 15% Surcharge Cap Continues To Protect Equity Investors

Even where a taxpayer falls within a higher surcharge bracket, tax attributable to gains under Section 112A continues to enjoy the statutory surcharge ceiling of 15%.

Accurate Reporting in Schedule CG Remains Critical

The annual exemption under Section 112A should be claimed through the prescribed computation mechanism.

Investors should avoid reporting only the net gain figure and should carefully reconcile disclosures with AIS, broker statements and demat records.

ITR Filing Precautions

Use the Correct Return Form

Situation	Applicable Return
Capital gains and no business income	ITR-2
Capital gains along with business income	ITR-3
Taxpayer having capital gains	Not eligible for ITR-1

Report Gross Gains

Gross Long-Term Capital Gains should be disclosed in Schedule CG.

The exemption under Section 112A should be claimed through the prescribed computation mechanism rather than by reporting only a net figure.

Reconcile With AIS and Supporting Records

Before filing the return, reconcile:

• AIS
• Contract notes
• Broker statements
• Demat statements

to minimise mismatch-related notices and adjustments.

Review Grandfathering Computations Carefully

For investments acquired before 31 January 2018, grandfathering computations should be independently verified and not accepted blindly from pre-filled data.

Key Takeaway

While Finance Act 2025 settled the controversy relating to the availability of rebate under Section 87A against Long-Term Capital Gains taxable under Section 112A, the core structure of Section 112A remains largely unchanged.

The annual exemption of ₹1,25,000, the relief embedded in the first proviso to Section 112A(2), grandfathering protection for pre-31 January 2018 acquisitions, capital loss set-off provisions and the statutory surcharge cap of 15% continue to provide meaningful benefits to investors.

For AY 2026-27 onwards, successful tax planning will depend less on rebate-based interpretations and more on understanding the statutory computation mechanism, utilising available reliefs efficiently and ensuring accurate reporting of Long-Term Capital Gains in the Income Tax Return.

Section 87A Rebate and LTCG under Section 112A: What Finance Act 2025 Changed for AY 2026-27

By CA Surekha S. Ahuja

New Tax Regime | AY 2026-27 (FY 2025-26)

Finance Act 2025 Has Clarified the Legislative Position

One of the most debated questions in recent years was whether the rebate under Section 87A could reduce tax payable on Long-Term Capital Gains taxable under Section 112A.

The issue gained prominence after Finance Act 2025 increased the rebate under the new tax regime to Rs.60,000 and raised the income threshold to Rs.12 lakh.

Finance Act 2025 has now addressed the matter through an express statutory amendment.

For AY 2026-27 onwards, the law makes it clear that the enhanced rebate under Section 87A is available only against tax computed under the slab rates of the new tax regime and not against tax payable under special-rate provisions such as Section 112A.

The Three Provisions Every Investor Must Understand

The taxation of equity Long-Term Capital Gains under the new regime is now governed by the interaction of three provisions.

Section 112A

Section 112A applies to Long-Term Capital Gains arising from:

• Listed equity shares satisfying the prescribed STT conditions

• Units of equity-oriented mutual funds

• Units of business trusts

For AY 2026-27:

• Tax rate: 12.5%

• Annual exemption: Rs1,25,000

• Indexation: Not available

• Grandfathering provisions for assets acquired before 31 January 2018 continue to apply

Section 87A

Finance Act 2025 substantially enhanced the rebate available under the new regime.

Particulars	AY 2026-27
Maximum rebate	Rs.60,000
Threshold for rebate eligibility	Normal income taxable at slab rates not exceeding Rs12,00,000
Eligible taxpayer	Resident Individual

However, the enhancement came with an equally important restriction.

Section 115BAC

Section 115BAC(1A) contains the slab rates applicable under the default new tax regime.

The significance of this provision lies in the language used in the newly inserted second proviso to Section 87A.

The Finance Act 2025 Amendment

With effect from AY 2026-27, Finance Act 2025 inserted a second proviso to Section 87A which provides that the rebate shall not exceed the amount of income tax payable at the rates specified under Section 115BAC(1A).

This amendment is the key to understanding the new position.

Since tax under Section 112A is charged at a special rate and not at the slab rates prescribed under Section 115BAC(1A), the rebate cannot be used to reduce tax payable on such gains.

In practical terms:

✓ Rebate may reduce tax on salary income

✓ Rebate may reduce tax on business income

✓ Rebate may reduce tax on house property income

✓ Rebate may reduce tax on other slab-rate income

✗ Rebate cannot reduce tax on LTCG taxable under Section 112A

An Important Distinction Taxpayers Must Understand

The restriction on rebate against Section 112A gains is separate from the determination of rebate eligibility.

A taxpayer may satisfy the conditions of Section 87A and still be liable to pay tax on Long-Term Capital Gains under Section 112A.

For example, a resident individual having salary income within the prescribed rebate threshold and Long-Term Capital Gains taxable under Section 112A may qualify for the rebate in respect of the slab-rate tax. However, the tax payable on the Long-Term Capital Gain will continue to be computed separately under Section 112A and cannot be reduced by the rebate.

This distinction is likely to be one of the most important practical aspects of the amendment.

What Has Not Changed

Annual Exemption of Rs.1.25 Lakh Continues

The first Rs.1,25,000 of eligible Long-Term Capital Gains remains exempt every financial year irrespective of the taxpayer's income level.

Grandfathering Continues

For specified equity investments acquired before 31 January 2018, the grandfathering provisions introduced when Section 112A was enacted continue to apply.

Indexation Remains Unavailable

Section 112A continues to tax gains without the benefit of indexation.

Surcharge Cap of 15% Continues

The surcharge on tax attributable to gains under Section 112A remains capped at 15%, even where the taxpayer falls in a higher surcharge bracket.

Consequently, the effective tax burden on such gains remains substantially lower than the maximum tax burden applicable to ordinary income.

What the Amendment Actually Does

The amendment does not:

• Increase the tax rate under Section 112A

• Withdraw the annual exemption of Rs.1,25,000

• Remove grandfathering benefits

• Alter the statutory surcharge cap of 15%

Its primary effect is to restrict the enhanced Section 87A rebate to tax computed under the slab rates of the new tax regime.

Key Takeaway

Finance Act 2025 has provided legislative clarity on the interaction between Section 87A and Section 112A.

From AY 2026-27 onwards, the enhanced rebate of up to Rs.60,000 is available only against tax computed under the slab rates of the new tax regime. Tax payable on Long-Term Capital Gains under Section 112A remains outside the rebate mechanism and continues to be taxed separately at 12.5% after the annual exemption of Rs.1.25 lakh.

For investors and taxpayers, the focus should now move away from rebate-based interpretations and towards understanding the practical implications of Section 112A, including annual exemption utilisation, surcharge treatment, capital loss set-off, tax-efficient exit planning and accurate return reporting—topics that we examine in Part 2.

FORM DPT-3 FOR FY 2025–26 The Ultimate Practical Filing Guide

 By CA Surekha Ahuja

Column-by-Column Reporting - CC, OD & Term Loans - Reconciliation Framework - Compliance Risks - All FAQs Resolved

Filing Deadline Alert

Due Date: 30 June 2026

Particulars	Exposure
Base Penalty for Late Filing	₹5,000
Continuing Default	₹500 per day
Serious Deposit Violations under Section 73	Penalty up to ₹1 Crore or 2× Deposit Amount (subject to statutory limits) and other consequences under the Companies Act

Important: DPT-3 for FY 2025–26 should be filed on or before 30 June 2026. Delayed filing may attract additional fees and continuing default consequences under the Companies Act, 2013.

Introduction & Legal Framework

Form DPT-3 is prescribed under Rule 16 and Rule 16A of the Companies (Acceptance of Deposits) Rules, 2014, read with Sections 73 to 76 of the Companies Act, 2013.

The form is used for reporting:

• Deposits accepted by a company; and/or
• Outstanding receipts of money not treated as deposits under Rule 2(1)(c).

Every company other than a Government company should evaluate its reporting obligation under Rule 16 and Rule 16A as on 31 March. In practice, companies having outstanding deposits and/or receipts of money falling within the reporting framework of the Deposit Rules generally require DPT-3 compliance.

For most private limited companies, DPT-3 primarily involves reporting:

• Director loans
• Bank borrowings
• Cash Credit (CC) facilities
• Overdraft (OD) facilities
• Working capital borrowings
• Inter-corporate borrowings
• Share application money
• Customer advances
• Other exempted receipts

Why DPT-3 Matters

Most DPT-3 errors arise not because of complex law but because of:

• Incorrect purpose selection
• Omission of bank borrowings
• Wrong classification of director loans
• Incorrect reporting of share application money
• Misclassification of customer advances
• Failure to reconcile figures with audited financial statements

A properly prepared DPT-3 should therefore be supported by legal analysis, reconciliation with books of account and verification of exemption conditions under Rule 2(1)(c).

Step 1 – Purpose Selection: The Most Critical Decision

Before entering any figures, select the correct purpose.

For most companies, this is the single most important decision in the entire filing process.

Practical Rule

For the vast majority of private limited companies, the appropriate selection is:

"Particulars of transactions not considered as deposit."

Purpose Option	Select When	Columns to Fill	Auditor Certificate
Onetime Return	Historical outstanding amounts from 01.04.2014 to 31.03.2019 not considered deposits	Column 14	Required
Particulars NOT considered as Deposit	Only exempted receipts such as director loans, bank loans, inter-corporate borrowings etc.	Column 15	Generally Not Required
Return of Deposit + Particulars NOT Deposit	Both deposits and exempted receipts exist	Columns 10, 12, 13, 15	Required
Return of Deposit	Company has reportable deposits	Columns 8(d), 9, 10, 11, 12, 13	Required

Step 2 – Column-by-Column Reference Guide

Basic Information (Columns 1–7)

Column	Field	What to Enter	Important Note
1(a)	CIN	Valid CIN	Mandatory
2	Company Details	Verify pre-filled details	Update email if required
3	Purpose	Select one option only	Determines active fields
4	Company Type	Public / Private	Verify carefully
5	Government Company	Yes / No	Refer Section 2(45)
6	Objects	Verify main objects	Check pre-filled data
7(b)	Date of Last Closing	31 March of relevant FY	Annual reporting date

Financial Information (Columns 8–15)

Column	Particulars	Requirement
8	Net Worth	Based on latest audited financial statements
8(d)	Maximum Deposit Limit	Relevant mainly for eligible public companies
9	Number of Depositors	Applicable where deposits exist
10	Particulars of Deposits	Applicable for deposit reporting
11	Matured but Unclaimed Deposits	Mandatory where applicable
12	Liquid Assets	Applicable where deposits exist
13	Charge Details	Applicable where charge exists
14	Outstanding Amount Not Considered Deposits	One-time return only
15	Particulars Not Considered Deposits	Most important column for private companies

Practical Formula Note – Net Worth

Net Worth = Paid-up Share Capital + Free Reserves + Securities Premium − Accumulated Losses − Deferred/Miscellaneous Expenditure − Unprovided Depreciation

Common Error: Including revaluation reserves in net worth.

Practical Formula Note – Maximum Deposit Limit

Maximum Deposit Limit = Net Worth × 35%

Applicable primarily to eligible public companies.

Step 3 – Column 15: Complete Exempted Deposit Breakdown

Column 15 is the most important disclosure section for private companies.

Sub-Column	Nature of Transaction	Reportable	Example
15(a)	Government / Statutory Authority Loans	Yes	SIDBI, State Government
15(b)	Foreign Government / Institution Borrowings	Yes	ECB, Foreign Institution
15(c)	Banking Facilities and Borrowings (including CC, OD, Working Capital and Term Loans)	Yes	CC, OD, Working Capital, Term Loan
15(d)	Public Financial Institution Loans	Yes	IFCI, NABARD
15(f)	Inter-Corporate Borrowings	Yes	Loan from another company
15(g)	Share Application Money	Subject to conditions	Pending allotment
15(h)	Director Loans	Yes	Director funding
15(k)	Employee Security Deposit	Subject to conditions	Employee deposit
15(m)	Business Advances	Subject to conditions	Customer advance
Relevant Clauses	Debentures, Convertible Notes, AIF Funding etc.	As applicable	Based on facts

DPT-3 Reporting vs Non-Reporting Matrix

Particulars	Reportable	Column
Bank CC	Yes	15(c)
Bank OD	Yes	15(c)
Bank Term Loan	Yes	15(c)
Working Capital Facility	Yes	15(c)
Director Loan	Yes	15(h)
Inter-Corporate Loan	Yes	15(f)
Share Application Money (within prescribed period)	Yes	15(g)
Customer Advance (within exemption period)	Yes	15(m)
Public Deposits	Yes	10
Trade Creditors	No	NA
MSME Creditors	No	NA
GST Payable	No	NA
TDS Payable	No	NA
PF / ESI Payable	No	NA
Salary Payable	No	NA
Directors' Remuneration Payable	No	NA
Audit Fee Provision	No	NA
Professional Fee Provision	No	NA
Outstanding Expense Provisions	No	NA
MTM Loss	No	NA
Government Grants	Generally No	NA

Critical Exclusions

The following should generally not be disclosed under DPT-3:

• Trade creditors
• MSME creditors
• Directors' remuneration payable
• Salary payable
• Audit fee provisions
• Professional fee provisions
• Outstanding expense provisions
• Interest accrued but not due
• Fully repaid loans
• MTM losses
• Statutory dues

Step 4 – CC, OD & Term Loan Treatment

Bank borrowings are among the most frequently misreported items in DPT-3.

Decision Matrix

Borrowing Type	Reportable	Column
Cash Credit (CC)	Yes	15(c)
Overdraft (OD)	Yes	15(c)
Working Capital Loan	Yes	15(c)
Bank Term Loan	Yes	15(c)
Director Loan	Yes	15(h)
Inter-Corporate Loan	Yes	15(f)

Amount to be Reported

Component	Include
Principal Outstanding	Yes
Interest Accrued and Due	Yes
Interest Accrued but Not Due	No
Fully Repaid Amounts	No

Reporting Formula

Amount Reportable = Principal Outstanding as on 31 March + Interest Accrued and Due

Common Error: Reporting sanctioned limits instead of actual outstanding balances.

CC / OD Practical Note

CC and OD facilities are generally repayable on demand. Accordingly, the outstanding balance as on 31 March is ordinarily considered for reporting.

Director Loan Reporting

Verification Formula

Amount Reportable under Column 15(h) = Outstanding Director Loan as on 31 March + Interest Accrued and Due

Common Error: Reporting original loan amount instead of year-end outstanding balance.

Inter-Corporate Borrowings

Verification Formula

Amount Reportable under Column 15(f) = Outstanding ICD as on 31 March + Interest Accrued and Due

Share Application Money

Position	Treatment
Within prescribed period	Column 15(g)
Beyond prescribed period	Review deposit implications

Practical Verification Note

Every old share application money balance should be separately reviewed before claiming exemption.

Customer Advances

Position	Treatment
Within exemption conditions	Eligible for exemption
Beyond exemption conditions	Re-evaluate classification

Practical Verification Note

Review ageing of every advance outstanding as on 31 March before claiming exemption.

Step 5 – Opening Balance Mismatch Framework

Scenario	Practical Resolution
Opening DPT-3 differs from previous year's closing	Prepare reconciliation and obtain confirmation
Director loan mismatch	Verify ledger balances
ICD mismatch	Verify confirmations
Share application money mismatch	Verify allotment records
CC / OD mismatch	Match with books and bank statements
HUF / LLP loan	Review exemption eligibility separately

Verification Principle

Current Year Opening Balance should ordinarily reconcile with the Previous Year's Closing Balance, subject to documented adjustments and reconciliation.

Step 6 – Balance Sheet Reconciliation Framework

Before filing DPT-3, perform a complete reconciliation with audited financial statements.

Particulars	Amount
Secured Borrowings	XXX
Unsecured Borrowings	XXX
Director Loans	XXX
Inter-Corporate Borrowings	XXX
Other Reportable Receipts	XXX
Less: Non-Reportable Liabilities	XXX
Amount Reportable in DPT-3	XXX

Reconciliation Formula

Amount Reportable in DPT-3 = Reportable Borrowings and Receipts − Non-Reportable Liabilities

Common Error: Assuming Balance Sheet liabilities automatically equal DPT-3 disclosures.

Step 7 – Auditor's Certificate

Filing Type	Auditor Certificate
Exempted Receipts Only	Generally Not Required
Deposit Return	Required
Combined Filing	Required
One-Time Return	Required

Best Practice

Even where not mandatory, obtain independent verification of balances before filing.

Step 8 – Key Compliance Risk Checkpoints

Risk Area	Preventive Action
Late Filing	File before 30 June
Incorrect Purpose Selection	Review before submission
Omission of Bank Borrowings	Verify all facilities
Wrong Director Loan Classification	Verify exemption conditions
Share Application Delays	Review timelines
Customer Advance Ageing	Review periodically
Unreconciled Figures	Match with audited books

Penalty Formula

Penalty = ₹5,000 + ₹500 per day of continuing default

Professional Documentation File

Maintain the following documents along with DPT-3 working papers:

Document	Purpose
Audited Financial Statements	Source of disclosures
Loan Confirmations	Verification of balances
Director Loan Declarations	Support for exemption claims
Share Application Records	Verification of timelines
Customer Advance Ageing Report	Verification of exemption conditions
Previous Year's DPT-3	Opening balance reconciliation
Internal Reconciliation Working Papers	Audit trail and documentation
Auditor Verification Note	Internal compliance support

Best Practice

Maintain a complete DPT-3 compliance file even where an auditor's certificate is not mandatory.

Private Company Filing Checklist – FY 2025–26

☐ Purpose selected correctly

☐ Date of closing entered as 31.03.2026

☐ Net worth verified from audited Balance Sheet

☐ All CC / OD facilities reviewed

☐ Working capital facilities reviewed

☐ Bank term loans reviewed

☐ Director loans verified

☐ Inter-corporate borrowings identified

☐ Share application money reviewed

☐ Customer advance ageing reviewed

☐ Opening balances reconciled

☐ DPT-3 matched with audited books

☐ Exclusions verified

☐ Auditor confirmation obtained

☐ DSC validity checked

☐ Filing completed before 30 June 2026

Frequently Asked Questions

Q1. Should a company with no loans or deposits file DPT-3?

Companies should evaluate their filing obligation based on facts and applicable requirements. Many professionals adopt a conservative NIL filing approach to avoid future MCA queries.

Q2. Are CC, OD and Working Capital facilities reportable?

Yes. Outstanding banking facilities generally require reporting under the applicable exempted category.

Q3. Should interest be included?

Interest accrued and due is generally included. Interest accrued but not due is generally excluded.

Q4. Does resignation of a director affect an existing director loan exemption?

Generally no. The position at the time of receipt is critical.

Q5. Is a loan from a director's HUF covered under the director loan exemption?

Generally no. The exemption applies to the director in an individual capacity.

Q6. How should customer advances outstanding beyond the exemption period be evaluated?

Such cases require separate examination as exemption conditions may cease to be satisfied.

Q7. Is share application money exempt indefinitely?

No. Applicable timelines must be monitored carefully.

Q8. What if the opening balance does not match last year's closing DPT-3?

Prepare a proper reconciliation and obtain confirmation before filing.

Q9. Is an auditor's certificate required where only bank loans exist?

Generally not, if only exempted receipts are being reported.

Q10. Are trade creditors and salary payable reportable?

No. These are generally outside the DPT-3 reporting framework.

Q11. How should corporate credit card dues be treated?

Review the underlying banking arrangement and accounting classification. Where they represent an outstanding banking facility, reporting under Column 15(c) may be appropriate.

Q12. Is a fully repaid loan reportable?

No. DPT-3 generally reports outstanding balances as on 31 March.

Q13. Are MTM losses reportable?

No. MTM losses are accounting adjustments and generally do not represent receipts of money.

Q14. How should loans from RBI-regulated NBFCs be evaluated?

Such loans should be examined under the relevant exemption category based on the nature of the lender and transaction.

Q15. Are Government grants and incentives reportable?

Generally no. These are ordinarily not treated as deposits or borrowings for DPT-3 purposes.

Five Numbers Every DPT-3 Filer Must Verify

Particulars	Verification Point
Net Worth	Column 8
CC / OD Outstanding	Column 15(c)
Director Loan Outstanding	Column 15(h)
Opening vs Previous Closing	Reconciliation
Advances Outstanding	Ageing Review

Conclusion

Form DPT-3 is no longer a routine ROC filing. It has evolved into a significant disclosure mechanism through which regulators assess a company's borrowing profile, exempted receipts, deposit compliance and overall financial reporting discipline.

Most filing disputes arise from incorrect purpose selection, omission of bank borrowings, misclassification of director loans, ageing issues relating to advances and share application money, and failure to reconcile disclosures with audited financial statements.

A robust DPT-3 filing should therefore be supported by detailed reconciliation, verification of exemption conditions, proper documentation of outstanding balances and timely filing before the statutory deadline.

A few hours spent on reconciliation and review today can prevent substantial compliance exposure and regulatory scrutiny tomorrow.

Legal References: Rule 2(1)(c), Rule 16 and Rule 16A of the Companies (Acceptance of Deposits) Rules, 2014; Sections 73 to 76 of the Companies Act, 2013; MCA Guidance; Professional Guidance and FAQs on DPT-3 Reporting.