diff --git a/pkg/app/app.go b/pkg/app/app.go
index 1ee1cb48..5ad9a7aa 100644
--- a/pkg/app/app.go
+++ b/pkg/app/app.go
@@ -131,7 +131,7 @@ func (a *App) Deps(c DepsConfigProvider) error {
 	return a.ForEachState(func(run *Run) (_ bool, errs []error) {
 		errs = run.Deps(c)
 		return
-	}, c.IncludeTransitiveNeeds(), SetFilter(true))
+	}, c.IncludeNeeds(), c.IncludeTransitiveNeeds(), SetFilter(true))
 }
 
 func (a *App) Repos(c ReposConfigProvider) error {
@@ -143,7 +143,7 @@ func (a *App) Repos(c ReposConfigProvider) error {
 		}
 
 		return
-	}, c.IncludeTransitiveNeeds(), SetFilter(true))
+	}, c.IncludeNeeds(), c.IncludeTransitiveNeeds(), SetFilter(true))
 }
 
 func (a *App) Diff(c DiffConfigProvider) error {
@@ -169,7 +169,8 @@ func (a *App) Diff(c DiffConfigProvider) error {
 			IncludeCRDs:            &includeCRDs,
 			Validate:               c.Validate(),
 			Concurrency:            c.Concurrency(),
-			IncludeTransitiveNeeds: c.IncludeNeeds(),
+			IncludeNeeds:           c.IncludeNeeds(),
+			IncludeTransitiveNeeds: c.IncludeTransitiveNeeds(),
 		}, func() []error {
 			msg, matched, affected, errs = a.diff(run, c)
 			return errs
@@ -201,7 +202,7 @@ func (a *App) Diff(c DiffConfigProvider) error {
 		}
 
 		return matched, criticalErrs
-	}, c.IncludeTransitiveNeeds())
+	}, c.IncludeNeeds(), c.IncludeTransitiveNeeds())
 
 	if err != nil {
 		return err
@@ -241,7 +242,8 @@ func (a *App) Template(c TemplateConfigProvider) error {
 			SkipCleanup:            c.SkipCleanup(),
 			Validate:               c.Validate(),
 			Concurrency:            c.Concurrency(),
-			IncludeTransitiveNeeds: c.IncludeNeeds(),
+			IncludeNeeds:           c.IncludeNeeds(),
+			IncludeTransitiveNeeds: c.IncludeTransitiveNeeds(),
 			Set:                    c.Set(),
 			Values:                 c.Values(),
 			KubeVersion:            c.KubeVersion(),
@@ -256,17 +258,19 @@ func (a *App) Template(c TemplateConfigProvider) error {
 		}
 
 		return
-	}, c.IncludeTransitiveNeeds())
+	}, c.IncludeNeeds(), c.IncludeTransitiveNeeds())
 }
 
 func (a *App) WriteValues(c WriteValuesConfigProvider) error {
 	return a.ForEachState(func(run *Run) (ok bool, errs []error) {
 		prepErr := run.withPreparedCharts("write-values", state.ChartPrepareOptions{
-			SkipRepos:   c.SkipRefresh() || c.SkipDeps(),
-			SkipRefresh: c.SkipRefresh(),
-			SkipDeps:    c.SkipDeps(),
-			SkipCleanup: c.SkipCleanup(),
-			Concurrency: c.Concurrency(),
+			SkipRepos:              c.SkipRefresh() || c.SkipDeps(),
+			SkipRefresh:            c.SkipRefresh(),
+			SkipDeps:               c.SkipDeps(),
+			SkipCleanup:            c.SkipCleanup(),
+			IncludeNeeds:           c.IncludeNeeds(),
+			IncludeTransitiveNeeds: c.IncludeTransitiveNeeds(),
+			Concurrency:            c.Concurrency(),
 		}, func() []error {
 			ok, errs = a.writeValues(run, c)
 			return errs
@@ -277,7 +281,7 @@ func (a *App) WriteValues(c WriteValuesConfigProvider) error {
 		}
 
 		return
-	}, c.IncludeTransitiveNeeds(), SetFilter(true))
+	}, c.IncludeNeeds(), c.IncludeTransitiveNeeds(), SetFilter(true))
 }
 
 type MultiError struct {
@@ -320,7 +324,8 @@ func (a *App) Lint(c LintConfigProvider) error {
 			SkipDeps:               c.SkipDeps(),
 			SkipCleanup:            c.SkipCleanup(),
 			Concurrency:            c.Concurrency(),
-			IncludeTransitiveNeeds: c.IncludeNeeds(),
+			IncludeNeeds:           c.IncludeNeeds(),
+			IncludeTransitiveNeeds: c.IncludeTransitiveNeeds(),
 		}, func() []error {
 			ok, lintErrs, errs = a.lint(run, c)
 			return append(errs, lintErrs...)
@@ -335,7 +340,7 @@ func (a *App) Lint(c LintConfigProvider) error {
 		}
 
 		return
-	}, c.IncludeTransitiveNeeds())
+	}, c.IncludeNeeds(), c.IncludeTransitiveNeeds())
 
 	if err != nil {
 		return err
@@ -362,6 +367,7 @@ func (a *App) Unittest(c UnittestConfigProvider) error {
 			SkipDeps:               c.SkipDeps(),
 			SkipCleanup:            c.SkipCleanup(),
 			Concurrency:            c.Concurrency(),
+			IncludeNeeds:           c.IncludeNeeds(),
 			IncludeTransitiveNeeds: c.IncludeTransitiveNeeds(),
 		}, func() []error {
 			ok, unittestErrs, errs = a.unittest(run, c)
@@ -377,7 +383,7 @@ func (a *App) Unittest(c UnittestConfigProvider) error {
 		}
 
 		return
-	}, c.IncludeTransitiveNeeds())
+	}, c.IncludeNeeds(), c.IncludeTransitiveNeeds())
 
 	if err != nil {
 		return err
@@ -409,7 +415,7 @@ func (a *App) Fetch(c FetchConfigProvider) error {
 		}
 
 		return
-	}, false, SetFilter(true))
+	}, false, false, SetFilter(true))
 }
 
 func (a *App) Sync(c SyncConfigProvider) error {
@@ -424,7 +430,8 @@ func (a *App) Sync(c SyncConfigProvider) error {
 			WaitRetries:            c.WaitRetries(),
 			WaitForJobs:            c.WaitForJobs(),
 			IncludeCRDs:            &includeCRDs,
-			IncludeTransitiveNeeds: c.IncludeNeeds(),
+			IncludeNeeds:           c.IncludeNeeds(),
+			IncludeTransitiveNeeds: c.IncludeTransitiveNeeds(),
 			Validate:               c.Validate(),
 			Concurrency:            c.Concurrency(),
 		}, func() []error {
@@ -437,7 +444,7 @@ func (a *App) Sync(c SyncConfigProvider) error {
 		}
 
 		return
-	}, c.IncludeTransitiveNeeds())
+	}, c.IncludeNeeds(), c.IncludeTransitiveNeeds())
 }
 
 func (a *App) Apply(c ApplyConfigProvider) error {
@@ -463,7 +470,8 @@ func (a *App) Apply(c ApplyConfigProvider) error {
 			SkipCleanup:            c.SkipCleanup(),
 			Validate:               c.Validate(),
 			Concurrency:            c.Concurrency(),
-			IncludeTransitiveNeeds: c.IncludeNeeds(),
+			IncludeNeeds:           c.IncludeNeeds(),
+			IncludeTransitiveNeeds: c.IncludeTransitiveNeeds(),
 		}, func() []error {
 			matched, updated, es := a.apply(run, c)
 
@@ -480,7 +488,7 @@ func (a *App) Apply(c ApplyConfigProvider) error {
 		}
 
 		return
-	}, c.IncludeTransitiveNeeds(), opts...)
+	}, c.IncludeNeeds(), c.IncludeTransitiveNeeds(), opts...)
 
 	if err != nil {
 		return err
@@ -511,7 +519,7 @@ func (a *App) Status(c StatusesConfigProvider) error {
 		}
 
 		return
-	}, false, SetFilter(true))
+	}, false, false, SetFilter(true))
 }
 
 func (a *App) Destroy(c DestroyConfigProvider) error {
@@ -535,7 +543,7 @@ func (a *App) Destroy(c DestroyConfigProvider) error {
 			ok, errs = a.delete(run, true, c)
 		}
 		return
-	}, false, SetReverse(true))
+	}, false, false, SetReverse(true))
 }
 
 func (a *App) Test(c TestConfigProvider) error {
@@ -561,7 +569,7 @@ func (a *App) Test(c TestConfigProvider) error {
 		}
 
 		return
-	}, false, SetFilter(true))
+	}, false, false, SetFilter(true))
 }
 
 func (a *App) PrintDAGState(c DAGConfigProvider) error {
@@ -579,7 +587,7 @@ func (a *App) PrintDAGState(c DAGConfigProvider) error {
 			return errs
 		})
 		return ok, errs
-	}, false, SetFilter(true))
+	}, false, false, SetFilter(true))
 }
 
 func (a *App) PrintState(c StateConfigProvider) error {
@@ -633,7 +641,7 @@ func (a *App) PrintState(c StateConfigProvider) error {
 		}
 
 		return
-	}, false, SetFilter(true))
+	}, false, false, SetFilter(true))
 }
 
 func (a *App) dag(r *Run) error {
@@ -685,7 +693,7 @@ func (a *App) ListReleases(c ListConfigProvider) error {
 		}
 
 		return
-	}, false, SetFilter(true))
+	}, false, false, SetFilter(true))
 
 	close(releasesChan)
 
@@ -1254,7 +1262,7 @@ var (
 	}
 )
 
-func (a *App) ForEachState(do func(*Run) (bool, []error), includeTransitiveNeeds bool, o ...LoadOption) error {
+func (a *App) ForEachState(do func(*Run) (bool, []error), includeNeeds bool, includeTransitiveNeeds bool, o ...LoadOption) error {
 	ctx := NewContext()
 	err := a.visitStatesWithSelectorsAndRemoteSupportWithContext(a.FileOrDir, func(st *state.HelmState) (bool, []error) {
 		helm, err := a.getHelm(st)
@@ -1267,7 +1275,7 @@ func (a *App) ForEachState(do func(*Run) (bool, []error), includeTransitiveNeeds
 			return false, []error{err}
 		}
 		return do(run)
-	}, includeTransitiveNeeds, &ctx, o...)
+	}, includeNeeds, includeTransitiveNeeds, &ctx, o...)
 
 	return err
 }
@@ -1371,7 +1379,7 @@ type Opts struct {
 	DAGEnabled bool
 }
 
-func (a *App) visitStatesWithSelectorsAndRemoteSupportWithContext(fileOrDir string, converge func(*state.HelmState) (bool, []error), includeTransitiveNeeds bool, sharedCtx *Context, opt ...LoadOption) error {
+func (a *App) visitStatesWithSelectorsAndRemoteSupportWithContext(fileOrDir string, converge func(*state.HelmState) (bool, []error), includeNeeds bool, includeTransitiveNeeds bool, sharedCtx *Context, opt ...LoadOption) error {
 	opts := LoadOpts{
 		Selectors: a.Selectors,
 	}
@@ -1402,7 +1410,7 @@ func (a *App) visitStatesWithSelectorsAndRemoteSupportWithContext(fileOrDir stri
 				_, err := converge(st)
 				return err
 			},
-				includeTransitiveNeeds)
+				includeNeeds, includeTransitiveNeeds)
 		}
 	}
 
@@ -1423,9 +1431,9 @@ func (a *App) visitStatesWithSelectorsAndRemoteSupportWithContext(fileOrDir stri
 	return a.visitStatesWithContext(fileOrDir, opts, fHelmStatsWithOverrides, sharedCtx)
 }
 
-func processFilteredReleases(st *state.HelmState, converge func(st *state.HelmState) []error, includeTransitiveNeeds bool) (bool, []error) {
+func processFilteredReleases(st *state.HelmState, converge func(st *state.HelmState) []error, includeNeeds bool, includeTransitiveNeeds bool) (bool, []error) {
 	if len(st.Selectors) > 0 {
-		err := st.FilterReleases(includeTransitiveNeeds)
+		err := st.FilterReleases(includeNeeds, includeTransitiveNeeds)
 		if err != nil {
 			return false, []error{err}
 		}
@@ -1471,11 +1479,11 @@ func checkDuplicates(releases []state.ReleaseSpec) error {
 	return nil
 }
 
-func (a *App) Wrap(converge func(*state.HelmState, helmexec.Interface) []error) func(st *state.HelmState, helm helmexec.Interface, includeTransitiveNeeds bool) (bool, []error) {
-	return func(st *state.HelmState, helm helmexec.Interface, includeTransitiveNeeds bool) (bool, []error) {
+func (a *App) Wrap(converge func(*state.HelmState, helmexec.Interface) []error) func(st *state.HelmState, helm helmexec.Interface, includeNeeds bool, includeTransitiveNeeds bool) (bool, []error) {
+	return func(st *state.HelmState, helm helmexec.Interface, includeNeeds bool, includeTransitiveNeeds bool) (bool, []error) {
 		return processFilteredReleases(st, func(st *state.HelmState) []error {
 			return converge(st, helm)
-		}, includeTransitiveNeeds)
+		}, includeNeeds, includeTransitiveNeeds)
 	}
 }
 
@@ -1564,8 +1572,8 @@ func (a *App) findDesiredStateFiles(specifiedPath string, opts LoadOpts) ([]stri
 	return files, nil
 }
 
-func (a *App) getSelectedReleases(r *Run, includeTransitiveNeeds bool) ([]state.ReleaseSpec, []state.ReleaseSpec, error) {
-	selected, err := r.state.GetSelectedReleases(includeTransitiveNeeds)
+func (a *App) getSelectedReleases(r *Run, includeNeeds bool, includeTransitiveNeeds bool) ([]state.ReleaseSpec, []state.ReleaseSpec, error) {
+	selected, err := r.state.GetSelectedReleases(includeNeeds, includeTransitiveNeeds)
 	if err != nil {
 		return nil, nil, err
 	}
@@ -1630,7 +1638,17 @@ func (a *App) getSelectedReleases(r *Run, includeTransitiveNeeds bool) ([]state.
 		extra = " matching " + strings.Join(r.state.Selectors, ",")
 	}
 
-	a.Logger.Debugf("%d release(s)%s found in %s\n", len(selected), extra, r.state.FilePath)
+	// When needs are included, we need a separate count of just the selector-matched releases
+	// for the debug log, so we don't count the included needs in the "found" message.
+	matchCount := len(selected)
+	if includeNeeds || includeTransitiveNeeds {
+		matchedOnly, err := r.state.GetSelectedReleases(false, false)
+		if err != nil {
+			return nil, nil, err
+		}
+		matchCount = len(matchedOnly)
+	}
+	a.Logger.Debugf("%d release(s)%s found in %s\n", matchCount, extra, r.state.FilePath)
 
 	return selected, deduplicated, nil
 }
@@ -1641,7 +1659,7 @@ func (a *App) apply(r *Run, c ApplyConfigProvider) (bool, bool, []error) {
 
 	helm.SetExtraArgs(GetArgs(c.Args(), r.state)...)
 
-	selectedReleases, selectedAndNeededReleases, err := a.getSelectedReleases(r, c.IncludeTransitiveNeeds())
+	selectedReleases, selectedAndNeededReleases, err := a.getSelectedReleases(r, c.IncludeNeeds(), c.IncludeTransitiveNeeds())
 	if err != nil {
 		return false, false, []error{err}
 	}
@@ -1850,7 +1868,7 @@ func (a *App) delete(r *Run, purge bool, c DestroyConfigProvider) (bool, []error
 
 	affectedReleases := state.AffectedReleases{}
 
-	toSync, _, err := a.getSelectedReleases(r, false)
+	toSync, _, err := a.getSelectedReleases(r, false, false)
 	if err != nil {
 		return false, []error{err}
 	}
@@ -2070,7 +2088,7 @@ func (a *App) status(r *Run, c StatusesConfigProvider) (bool, []error) {
 
 	allReleases := st.Releases
 
-	selectedReleases, selectedAndNeededReleases, err := a.getSelectedReleases(r, false)
+	selectedReleases, selectedAndNeededReleases, err := a.getSelectedReleases(r, false, false)
 	if err != nil {
 		return false, []error{err}
 	}
@@ -2119,7 +2137,7 @@ func (a *App) sync(r *Run, c SyncConfigProvider) (bool, []error) {
 	st := r.state
 	helm := r.helm
 
-	selectedReleases, selectedAndNeededReleases, err := a.getSelectedReleases(r, c.IncludeTransitiveNeeds())
+	selectedReleases, selectedAndNeededReleases, err := a.getSelectedReleases(r, c.IncludeNeeds(), c.IncludeTransitiveNeeds())
 	if err != nil {
 		return false, []error{err}
 	}
@@ -2337,7 +2355,12 @@ func (a *App) template(r *Run, c TemplateConfigProvider) (bool, []error) {
 func (a *App) withNeeds(r *Run, c DAGConfig, includeDisabled bool, f func(*state.HelmState) []error) (bool, []error) {
 	st := r.state
 
-	selectedReleases, deduplicated, err := a.getSelectedReleases(r, false)
+	includeNeeds := c.IncludeNeeds()
+	if c.IncludeTransitiveNeeds() {
+		includeNeeds = true
+	}
+
+	selectedReleases, selectedAndNeededReleases, err := a.getSelectedReleases(r, includeNeeds, c.IncludeTransitiveNeeds())
 	if err != nil {
 		return false, []error{err}
 	}
@@ -2349,19 +2372,14 @@ func (a *App) withNeeds(r *Run, c DAGConfig, includeDisabled bool, f func(*state
 	// Without this, `PlanReleases` conflates duplicates and return both in `batches`,
 	// even if we provided `SelectedReleases: selectedReleases`.
 	// See https://github.com/roboll/helmfile/issues/1818 for more context.
-	st.Releases = deduplicated
-
-	includeNeeds := c.IncludeNeeds()
-	if c.IncludeTransitiveNeeds() {
-		includeNeeds = true
-	}
+	st.Releases = selectedAndNeededReleases
 
 	batches, err := st.PlanReleases(state.PlanOptions{
 		Reverse:                false,
 		SelectedReleases:       selectedReleases,
-		IncludeNeeds:           includeNeeds,
-		IncludeTransitiveNeeds: c.IncludeTransitiveNeeds(),
-		SkipNeeds:              c.SkipNeeds(),
+		IncludeNeeds:           false,
+		IncludeTransitiveNeeds: false,
+		SkipNeeds:              c.SkipNeeds() || includeNeeds,
 	})
 
 	if err != nil {
@@ -2392,10 +2410,11 @@ func (a *App) withNeeds(r *Run, c DAGConfig, includeDisabled bool, f func(*state
 
 	if len(toRender) > 0 {
 		// toRender already contains the direct and transitive needs depending on the DAG options.
-		// That's why we don't pass in `IncludeNeeds: c.IncludeNeeds(), IncludeTransitiveNeeds: c.IncludeTransitiveNeeds()` here.
+		// That's why we don't pass in `IncludeNeeds` or `IncludeTransitiveNeeds` here.
 		// Otherwise, in case include-needs=true, it will include the needs of needs, which results in unexpectedly introducing transitive needs,
 		// even if include-transitive-needs=true is unspecified.
-		if _, errs := withDAG(st, r.helm, a.Logger, state.PlanOptions{SelectedReleases: toRender, Reverse: false, SkipNeeds: c.SkipNeeds(), IncludeNeeds: includeNeeds}, a.WrapWithoutSelector(func(subst *state.HelmState, helm helmexec.Interface) []error {
+		// We set SkipNeeds when needs are included because toRender already has the correct set of releases.
+		if _, errs := withDAG(st, r.helm, a.Logger, state.PlanOptions{SelectedReleases: toRender, Reverse: false, SkipNeeds: c.SkipNeeds() || includeNeeds}, a.WrapWithoutSelector(func(subst *state.HelmState, helm helmexec.Interface) []error {
 			rels = append(rels, subst.Releases...)
 			return nil
 		})); len(errs) > 0 {
@@ -2437,7 +2456,7 @@ func (a *App) test(r *Run, c TestConfigProvider) []error {
 
 	st := r.state
 
-	toTest, _, err := a.getSelectedReleases(r, false)
+	toTest, _, err := a.getSelectedReleases(r, false, false)
 	if err != nil {
 		return []error{err}
 	}
@@ -2459,7 +2478,7 @@ func (a *App) writeValues(r *Run, c WriteValuesConfigProvider) (bool, []error) {
 	st := r.state
 	helm := r.helm
 
-	toRender, _, err := a.getSelectedReleases(r, false)
+	toRender, _, err := a.getSelectedReleases(r, false, false)
 	if err != nil {
 		return false, []error{err}
 	}
diff --git a/pkg/app/app_diff_test.go b/pkg/app/app_diff_test.go
index 5b9e8d0b..e888ee19 100644
--- a/pkg/app/app_diff_test.go
+++ b/pkg/app/app_diff_test.go
@@ -175,8 +175,6 @@ releases:
 			error:     ``,
 			selectors: []string{"app=test"},
 			diffed: []exectest.Release{
-				// TODO: Turned out we can't differentiate needs vs transitive needs in this case :thinking:
-				{Name: "logging", Flags: []string{"--kube-context", "default", "--namespace", "kube-system", "--reset-values"}},
 				{Name: "kubernetes-external-secrets", Flags: []string{"--kube-context", "default", "--namespace", "kube-system", "--reset-values"}},
 				{Name: "external-secrets", Flags: []string{"--kube-context", "default", "--namespace", "default", "--reset-values"}},
 				{Name: "my-release", Flags: []string{"--kube-context", "default", "--namespace", "default", "--reset-values"}},
diff --git a/pkg/app/app_lint_test.go b/pkg/app/app_lint_test.go
index f9b10836..6aa3f36b 100644
--- a/pkg/app/app_lint_test.go
+++ b/pkg/app/app_lint_test.go
@@ -1,21 +1,18 @@
 package app
 
 import (
-	"os"
-	"path/filepath"
-	"strings"
 	"sync"
 	"testing"
 
 	"github.com/google/go-cmp/cmp"
 	"github.com/helmfile/vals"
-	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
 	"go.uber.org/zap"
 
 	"github.com/helmfile/helmfile/pkg/exectest"
 	ffs "github.com/helmfile/helmfile/pkg/filesystem"
 	"github.com/helmfile/helmfile/pkg/helmexec"
+	"github.com/helmfile/helmfile/pkg/testhelper"
 )
 
 func TestLint(t *testing.T) {
@@ -144,30 +141,7 @@ releases:
 			require.Equal(t, wantLints, helm.Linted)
 		})
 
-		testNameComponents := strings.Split(t.Name(), "/")
-		testBaseName := strings.ToLower(
-			strings.ReplaceAll(
-				testNameComponents[len(testNameComponents)-1],
-				" ",
-				"_",
-			),
-		)
-		wantLogFileDir := filepath.Join("testdata", "app_lint_test")
-		wantLogFile := filepath.Join(wantLogFileDir, testBaseName)
-		wantLogData, err := os.ReadFile(wantLogFile)
-		updateLogFile := err != nil
-		wantLog := string(wantLogData)
-		gotLog := bs.String()
-		if updateLogFile {
-			if err := os.MkdirAll(wantLogFileDir, 0755); err != nil {
-				t.Fatalf("unable to create directory %q: %v", wantLogFileDir, err)
-			}
-			if err := os.WriteFile(wantLogFile, bs.Bytes(), 0644); err != nil {
-				t.Fatalf("unable to update lint log snapshot: %v", err)
-			}
-		}
-
-		assert.Equal(t, wantLog, gotLog)
+		testhelper.RequireLog(t, "app_lint_test", bs)
 	}
 
 	t.Run("fail on unselected need by default", func(t *testing.T) {
@@ -199,8 +173,6 @@ releases:
 			error:     ``,
 			selectors: []string{"app=test"},
 			linted: []exectest.Release{
-				// TODO: Turned out we can't differentiate needs vs transitive needs in this case :thinking:
-				{Name: "logging", Flags: []string{"--namespace", "kube-system"}},
 				{Name: "kubernetes-external-secrets", Flags: []string{"--namespace", "kube-system"}},
 				{Name: "external-secrets", Flags: []string{"--namespace", "default"}},
 				{Name: "my-release", Flags: []string{"--namespace", "default"}},
diff --git a/pkg/app/app_sequential_test.go b/pkg/app/app_sequential_test.go
index 101a4b5c..57823216 100644
--- a/pkg/app/app_sequential_test.go
+++ b/pkg/app/app_sequential_test.go
@@ -57,6 +57,7 @@ releases:
 	err = app.ForEachState(
 		Noop,
 		false,
+		false,
 		SetFilter(true),
 	)
 	if err != nil {
@@ -192,7 +193,8 @@ releases:
 	err = app.ForEachState(
 		noop,
 		false,
-		SetFilter(true),
+
+		false, SetFilter(true),
 	)
 	if err != nil {
 		t.Fatalf("unexpected error: %v", err)
@@ -405,7 +407,8 @@ releases:
 	err = app.ForEachState(
 		failingConverge,
 		false,
-		SetFilter(true),
+
+		false, SetFilter(true),
 	)
 
 	if err == nil {
@@ -472,7 +475,8 @@ replicaCount: 3
 	err = app.ForEachState(
 		captureState,
 		false,
-		SetFilter(true),
+
+		false, SetFilter(true),
 	)
 	if err != nil {
 		t.Fatalf("unexpected error: %v", err)
diff --git a/pkg/app/app_template_test.go b/pkg/app/app_template_test.go
index f2e5f50c..eabed44c 100644
--- a/pkg/app/app_template_test.go
+++ b/pkg/app/app_template_test.go
@@ -206,8 +206,6 @@ releases:
 			selectors: []string{"app=test"},
 			// Issue #2309: --kube-context is now added to template flags
 			templated: []exectest.Release{
-				// TODO: Turned out we can't differentiate needs vs transitive needs in this case :thinking:
-				{Name: "logging", Flags: []string{"--kube-context", "default", "--namespace", "kube-system"}},
 				{Name: "kubernetes-external-secrets", Flags: []string{"--kube-context", "default", "--namespace", "kube-system"}},
 				{Name: "external-secrets", Flags: []string{"--kube-context", "default", "--namespace", "default"}},
 				{Name: "my-release", Flags: []string{"--kube-context", "default", "--namespace", "default"}},
diff --git a/pkg/app/app_test.go b/pkg/app/app_test.go
index aa792b33..f1bd20f7 100644
--- a/pkg/app/app_test.go
+++ b/pkg/app/app_test.go
@@ -113,7 +113,8 @@ releases:
 	err := app.ForEachState(
 		noop,
 		false,
-		SetFilter(true),
+
+		false, SetFilter(true),
 	)
 	if err != nil {
 		t.Errorf("unexpected error: %v", err)
@@ -167,7 +168,8 @@ BAZ: 4
 	err := app.ForEachState(
 		Noop,
 		false,
-		SetFilter(true),
+
+		false, SetFilter(true),
 	)
 	if err != nil {
 		t.Errorf("unexpected error: %v", err)
@@ -211,7 +213,8 @@ releases:
 	err := app.ForEachState(
 		Noop,
 		false,
-		SetFilter(true),
+
+		false, SetFilter(true),
 	)
 	if err == nil {
 		t.Fatal("expected error did not occur")
@@ -298,7 +301,8 @@ func TestUpdateStrategyParamValidation(t *testing.T) {
 		err := app.ForEachState(
 			Noop,
 			false,
-			SetFilter(true),
+
+			false, SetFilter(true),
 		)
 
 		if c.isValid && err != nil {
@@ -350,7 +354,8 @@ releases:
 	err := app.ForEachState(
 		Noop,
 		false,
-		SetFilter(true),
+
+		false, SetFilter(true),
 	)
 	if err != nil {
 		t.Errorf("unexpected error: %v", err)
@@ -404,7 +409,8 @@ releases:
 			err := app.ForEachState(
 				Noop,
 				false,
-				SetFilter(true),
+
+				false, SetFilter(true),
 			)
 			if testcase.expectErr && err == nil {
 				t.Fatal("expected error did not occur")
@@ -472,7 +478,8 @@ releases:
 		err := app.ForEachState(
 			Noop,
 			false,
-			SetFilter(true),
+
+			false, SetFilter(true),
 		)
 		if testcase.expectErr && err == nil {
 			t.Errorf("error expected but not happened for name=%s", testcase.name)
@@ -528,7 +535,8 @@ releases:
 		err := app.ForEachState(
 			Noop,
 			false,
-			SetFilter(true),
+
+			false, SetFilter(true),
 		)
 		if testcase.expectErr && err == nil {
 			t.Errorf("error expected but not happened for environment=%s", testcase.name)
@@ -643,7 +651,8 @@ releases:
 			err := app.ForEachState(
 				collectReleases,
 				false,
-				SetFilter(true),
+
+				false, SetFilter(true),
 			)
 			if testcase.expectErr {
 				if err == nil {
@@ -968,7 +977,8 @@ func runFilterSubHelmFilesTests(testcases []struct {
 		err := app.ForEachState(
 			collectReleases,
 			false,
-			SetFilter(true),
+
+			false, SetFilter(true),
 		)
 		if testcase.expectErr {
 			if err == nil {
@@ -1058,7 +1068,8 @@ ns: INLINE_NS
 	err := app.ForEachState(
 		collectReleases,
 		false,
-		SetFilter(true),
+
+		false, SetFilter(true),
 	)
 
 	if err != nil {
@@ -1156,6 +1167,7 @@ releases:
 		err := app.ForEachState(
 			collectReleases,
 			false,
+			false,
 			SetReverse(testcase.reverse),
 			SetFilter(true),
 		)
@@ -1223,7 +1235,8 @@ bar: "bar1"
 		err := app.ForEachState(
 			collectReleases,
 			false,
-			SetFilter(true),
+
+			false, SetFilter(true),
 		)
 		if err != nil {
 			t.Fatalf("unexpected error: %v", err)
@@ -1345,7 +1358,8 @@ x:
 			err := app.ForEachState(
 				collectReleases,
 				false,
-				SetFilter(true),
+
+				false, SetFilter(true),
 			)
 			if err != nil {
 				t.Fatalf("unexpected error: %v", err)
@@ -1458,7 +1472,8 @@ releases:
 	err := app.ForEachState(
 		collectReleases,
 		false,
-		SetFilter(true),
+
+		false, SetFilter(true),
 	)
 	if err != nil {
 		t.Fatalf("unexpected error: %v", err)
@@ -1515,7 +1530,8 @@ releases:
 			err := app.ForEachState(
 				collectReleases,
 				false,
-				SetFilter(true),
+
+				false, SetFilter(true),
 			)
 			if err != nil {
 				t.Fatalf("unexpected error: %v", err)
@@ -1565,7 +1581,8 @@ releases:
 	err := app.ForEachState(
 		collectReleases,
 		false,
-		SetFilter(true),
+
+		false, SetFilter(true),
 	)
 
 	if err != nil {
@@ -1608,7 +1625,8 @@ releases:
 	err := app.ForEachState(
 		collectReleases,
 		false,
-		SetFilter(true),
+
+		false, SetFilter(true),
 	)
 
 	expected := "in ./helmfile.yaml: duplicate release \"foo\" found in namespace \"foo\" in kubecontext \"default\": there were 2 releases named \"foo\" matching specified selector"
@@ -1655,7 +1673,8 @@ releases:
 	err := app.ForEachState(
 		collectReleases,
 		false,
-		SetFilter(true),
+
+		false, SetFilter(true),
 	)
 
 	expected := "in ./helmfile.yaml: duplicate release \"foo\" found in namespace \"foo\" in kubecontext \"default\": there were 2 releases named \"foo\" matching specified selector"
@@ -2762,22 +2781,27 @@ func (a applyConfig) Description() string {
 
 type depsConfig struct {
 	skipRepos              bool
+	includeNeeds           bool
 	includeTransitiveNeeds bool
 }
 
-func (d depsConfig) SkipRepos() bool {
-	return d.skipRepos
+func (c depsConfig) SkipRepos() bool {
+	return c.skipRepos
 }
 
-func (d depsConfig) IncludeTransitiveNeeds() bool {
-	return d.includeTransitiveNeeds
+func (c depsConfig) IncludeNeeds() bool {
+	return c.includeNeeds
 }
 
-func (d depsConfig) Args() string {
+func (c depsConfig) IncludeTransitiveNeeds() bool {
+	return c.includeTransitiveNeeds
+}
+
+func (c depsConfig) Args() string {
 	return ""
 }
 
-func (d depsConfig) Concurrency() int {
+func (c depsConfig) Concurrency() int {
 	return 2
 }
 
@@ -4464,6 +4488,7 @@ releases:
 
 				depsErr := app.Deps(depsConfig{
 					skipRepos:              false,
+					includeNeeds:           false,
 					includeTransitiveNeeds: false,
 				})
 				switch {
@@ -4698,7 +4723,8 @@ releases:
 	err := app.ForEachState(
 		collectReleases,
 		false,
-		SetFilter(true),
+
+		false, SetFilter(true),
 	)
 	if err != nil {
 		t.Fatalf("unexpected error: %v", err)
@@ -4771,7 +4797,8 @@ releases:
 	err := app.ForEachState(
 		collectReleases,
 		false,
-		SetFilter(true),
+
+		false, SetFilter(true),
 	)
 	if err != nil {
 		t.Fatalf("unexpected error: %v", err)
@@ -4983,7 +5010,8 @@ func TestRenderYamlEnvVar(t *testing.T) {
 					return false, nil
 				},
 				false,
-				SetFilter(true),
+
+				false, SetFilter(true),
 			)
 
 			if tc.expectErr {
diff --git a/pkg/app/app_unittest_test.go b/pkg/app/app_unittest_test.go
index f5977048..cf55d57d 100644
--- a/pkg/app/app_unittest_test.go
+++ b/pkg/app/app_unittest_test.go
@@ -190,12 +190,10 @@ releases:
 	})
 
 	t.Run("with dedicated flags", func(t *testing.T) {
-		// --color is skipped on Helm 4 due to flag parsing issues
-		expectedFlags := []string{"--namespace", "kube-system", "--failfast"}
+		expectedFlags := []string{"--namespace", "kube-system", "--failfast", "--debugPlugin", "--file", "tests/logging/*_test.yaml"}
 		if !exectest.IsHelm4Enabled() {
-			expectedFlags = append(expectedFlags, "--color")
+			expectedFlags = []string{"--namespace", "kube-system", "--failfast", "--color", "--debugPlugin", "--file", "tests/logging/*_test.yaml"}
 		}
-		expectedFlags = append(expectedFlags, "--debugPlugin", "--file", "tests/logging/*_test.yaml")
 
 		check(t, testcase{
 			fields: fields{
@@ -231,7 +229,6 @@ releases:
 			},
 			selectors: []string{"app=test"},
 			unittested: []exectest.Release{
-				{Name: "logging", Flags: []string{"--namespace", "kube-system", "--file", "tests/logging/*_test.yaml"}},
 				{Name: "kubernetes-external-secrets", Flags: []string{"--namespace", "kube-system", "--file", "tests/secrets/*_test.yaml"}},
 				{Name: "external-secrets", Flags: []string{"--namespace", "default", "--file", "tests/external/*_test.yaml"}},
 				{Name: "my-release", Flags: []string{"--namespace", "default", "--file", "tests/myrelease/*_test.yaml"}},
diff --git a/pkg/app/config.go b/pkg/app/config.go
index 9b92e498..4c263d6d 100644
--- a/pkg/app/config.go
+++ b/pkg/app/config.go
@@ -31,6 +31,7 @@ type ConfigProvider interface {
 type DepsConfigProvider interface {
 	Args() string
 	SkipRepos() bool
+	IncludeNeeds() bool
 	IncludeTransitiveNeeds() bool
 
 	concurrencyConfig
@@ -38,6 +39,7 @@ type DepsConfigProvider interface {
 
 type ReposConfigProvider interface {
 	Args() string
+	IncludeNeeds() bool
 	IncludeTransitiveNeeds() bool
 }
 
@@ -285,6 +287,7 @@ type WriteValuesConfigProvider interface {
 	SkipDeps() bool
 	SkipRefresh() bool
 	SkipCleanup() bool
+	IncludeNeeds() bool
 	IncludeTransitiveNeeds() bool
 
 	concurrencyConfig
diff --git a/pkg/app/print_env.go b/pkg/app/print_env.go
index 17421e30..987be159 100644
--- a/pkg/app/print_env.go
+++ b/pkg/app/print_env.go
@@ -73,7 +73,7 @@ func (a *App) PrintEnv(c PrintEnvConfigProvider) error {
 
 		firstDoc = false
 		return false, nil
-	}, false)
+	}, false, false)
 
 	// Close JSON array
 	if c.Output() == "json" {
diff --git a/pkg/app/run.go b/pkg/app/run.go
index 91e25bb5..27ea2ae1 100644
--- a/pkg/app/run.go
+++ b/pkg/app/run.go
@@ -144,7 +144,7 @@ func (r *Run) Deps(c DepsConfigProvider) []error {
 
 	r.helm.SetExtraArgs(GetArgs(c.Args(), r.state)...)
 
-	return r.state.UpdateDeps(r.helm, c.IncludeTransitiveNeeds())
+	return r.state.UpdateDeps(r.helm, c.IncludeNeeds(), c.IncludeTransitiveNeeds())
 }
 
 func (r *Run) Repos(c ReposConfigProvider) error {
diff --git a/pkg/app/testdata/app_diff_test/include-needs b/pkg/app/testdata/app_diff_test/include-needs
index 2e043346..ed985d09 100644
--- a/pkg/app/testdata/app_diff_test/include-needs
+++ b/pkg/app/testdata/app_diff_test/include-needs
@@ -2,14 +2,12 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 2 release(s) matching app=test found in helmfile.yaml
 
-processing 4 groups of releases in this order:
+processing 3 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/logging
-2     default/kube-system/kubernetes-external-secrets
-3     default/default/external-secrets
-4     default/default/my-release
+1     default/kube-system/kubernetes-external-secrets
+2     default/default/external-secrets
+3     default/default/my-release
 
-processing releases in group 1/4: default/kube-system/logging
-processing releases in group 2/4: default/kube-system/kubernetes-external-secrets
-processing releases in group 3/4: default/default/external-secrets
-processing releases in group 4/4: default/default/my-release
+processing releases in group 1/3: default/kube-system/kubernetes-external-secrets
+processing releases in group 2/3: default/default/external-secrets
+processing releases in group 3/3: default/default/my-release
diff --git a/pkg/app/testdata/app_diff_test/include-needs_should_not_fail_on_disabled_direct_need b/pkg/app/testdata/app_diff_test/include-needs_should_not_fail_on_disabled_direct_need
index 538e191f..11b5a896 100644
--- a/pkg/app/testdata/app_diff_test/include-needs_should_not_fail_on_disabled_direct_need
+++ b/pkg/app/testdata/app_diff_test/include-needs_should_not_fail_on_disabled_direct_need
@@ -2,14 +2,9 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test2 found in helmfile.yaml
 
-processing 2 groups of releases in this order:
+processing 1 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
+1     default//test2
 
-processing releases in group 1/2: default/kube-system/disabled
-processing releases in group 2/2: default//test2
+processing releases in group 1/1: default//test2
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
-Affected releases are:
-  disabled (incubator/raw) DELETED
-
diff --git a/pkg/app/testdata/app_diff_test/include-needs_should_not_fail_on_disabled_transitive_need b/pkg/app/testdata/app_diff_test/include-needs_should_not_fail_on_disabled_transitive_need
index 374768b4..b8b28277 100644
--- a/pkg/app/testdata/app_diff_test/include-needs_should_not_fail_on_disabled_transitive_need
+++ b/pkg/app/testdata/app_diff_test/include-needs_should_not_fail_on_disabled_transitive_need
@@ -2,16 +2,11 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test3 found in helmfile.yaml
 
-processing 3 groups of releases in this order:
+processing 2 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
-3     default//test3
+1     default//test2
+2     default//test3
 
-processing releases in group 1/3: default/kube-system/disabled
-processing releases in group 2/3: default//test2
-processing releases in group 3/3: default//test3
+processing releases in group 1/2: default//test2
+processing releases in group 2/2: default//test3
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
-Affected releases are:
-  disabled (incubator/raw) DELETED
-
diff --git a/pkg/app/testdata/app_diff_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_direct_need b/pkg/app/testdata/app_diff_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_direct_need
index 538e191f..b6c63520 100644
--- a/pkg/app/testdata/app_diff_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_direct_need
+++ b/pkg/app/testdata/app_diff_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_direct_need
@@ -2,13 +2,11 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test2 found in helmfile.yaml
 
-processing 2 groups of releases in this order:
+processing 1 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
+1     default//test2
 
-processing releases in group 1/2: default/kube-system/disabled
-processing releases in group 2/2: default//test2
+processing releases in group 1/1: default//test2
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 Affected releases are:
   disabled (incubator/raw) DELETED
diff --git a/pkg/app/testdata/app_diff_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_transitive_need b/pkg/app/testdata/app_diff_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_transitive_need
index 374768b4..94cc476c 100644
--- a/pkg/app/testdata/app_diff_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_transitive_need
+++ b/pkg/app/testdata/app_diff_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_transitive_need
@@ -2,15 +2,13 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test3 found in helmfile.yaml
 
-processing 3 groups of releases in this order:
+processing 2 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
-3     default//test3
+1     default//test2
+2     default//test3
 
-processing releases in group 1/3: default/kube-system/disabled
-processing releases in group 2/3: default//test2
-processing releases in group 3/3: default//test3
+processing releases in group 1/2: default//test2
+processing releases in group 2/2: default//test3
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 Affected releases are:
   disabled (incubator/raw) DELETED
diff --git a/pkg/app/testdata/app_diff_test/include-transitive-needs_should_not_fail_on_disabled_transitive_need b/pkg/app/testdata/app_diff_test/include-transitive-needs_should_not_fail_on_disabled_transitive_need
index 374768b4..94cc476c 100644
--- a/pkg/app/testdata/app_diff_test/include-transitive-needs_should_not_fail_on_disabled_transitive_need
+++ b/pkg/app/testdata/app_diff_test/include-transitive-needs_should_not_fail_on_disabled_transitive_need
@@ -2,15 +2,13 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test3 found in helmfile.yaml
 
-processing 3 groups of releases in this order:
+processing 2 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
-3     default//test3
+1     default//test2
+2     default//test3
 
-processing releases in group 1/3: default/kube-system/disabled
-processing releases in group 2/3: default//test2
-processing releases in group 3/3: default//test3
+processing releases in group 1/2: default//test2
+processing releases in group 2/2: default//test3
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 Affected releases are:
   disabled (incubator/raw) DELETED
diff --git a/pkg/app/testdata/app_diff_test_1/delete_bar_when_foo_needs_bar_with_include-needs b/pkg/app/testdata/app_diff_test_1/delete_bar_when_foo_needs_bar_with_include-needs
index d0e53b18..423dcd31 100644
--- a/pkg/app/testdata/app_diff_test_1/delete_bar_when_foo_needs_bar_with_include-needs
+++ b/pkg/app/testdata/app_diff_test_1/delete_bar_when_foo_needs_bar_with_include-needs
@@ -2,13 +2,11 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release foo needs bar, but bar is not installed due to installed: false. Either mark bar as installed or remove bar from foo's needs
 2 release(s) found in helmfile.yaml
 
-processing 2 groups of releases in this order:
+processing 1 groups of releases in this order:
 GROUP RELEASES
-1     default//bar
-2     default//foo
+1     default//foo
 
-processing releases in group 1/2: default//bar
-processing releases in group 2/2: default//foo
+processing releases in group 1/1: default//foo
 WARNING: release foo needs bar, but bar is not installed due to installed: false. Either mark bar as installed or remove bar from foo's needs
 Affected releases are:
   bar (mychart2) DELETED
diff --git a/pkg/app/testdata/app_diff_test_1/delete_foo_when_bar_needs_foo_with_include-needs b/pkg/app/testdata/app_diff_test_1/delete_foo_when_bar_needs_foo_with_include-needs
index 3ba64bfa..66b8126d 100644
--- a/pkg/app/testdata/app_diff_test_1/delete_foo_when_bar_needs_foo_with_include-needs
+++ b/pkg/app/testdata/app_diff_test_1/delete_foo_when_bar_needs_foo_with_include-needs
@@ -2,13 +2,11 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release bar needs foo, but foo is not installed due to installed: false. Either mark foo as installed or remove foo from bar's needs
 2 release(s) found in helmfile.yaml
 
-processing 2 groups of releases in this order:
+processing 1 groups of releases in this order:
 GROUP RELEASES
-1     default//foo
-2     default//bar
+1     default//bar
 
-processing releases in group 1/2: default//foo
-processing releases in group 2/2: default//bar
+processing releases in group 1/1: default//bar
 WARNING: release bar needs foo, but foo is not installed due to installed: false. Either mark foo as installed or remove foo from bar's needs
 Affected releases are:
   bar (mychart2) UPDATED
diff --git a/pkg/app/testdata/app_diff_test_2/delete_bar_when_foo_needs_bar_with_include-needs b/pkg/app/testdata/app_diff_test_2/delete_bar_when_foo_needs_bar_with_include-needs
index 0df4dc20..a6718797 100644
--- a/pkg/app/testdata/app_diff_test_2/delete_bar_when_foo_needs_bar_with_include-needs
+++ b/pkg/app/testdata/app_diff_test_2/delete_bar_when_foo_needs_bar_with_include-needs
@@ -2,13 +2,11 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release foo needs bar, but bar is not installed due to installed: false. Either mark bar as installed or remove bar from foo's needs
 2 release(s) found in helmfile.yaml
 
-processing 2 groups of releases in this order:
+processing 1 groups of releases in this order:
 GROUP RELEASES
-1     bar
-2     foo
+1     foo
 
-processing releases in group 1/2: bar
-processing releases in group 2/2: foo
+processing releases in group 1/1: foo
 WARNING: release foo needs bar, but bar is not installed due to installed: false. Either mark bar as installed or remove bar from foo's needs
 Affected releases are:
   bar (mychart2) DELETED
diff --git a/pkg/app/testdata/app_lint_test/include-needs b/pkg/app/testdata/app_lint_test/include-needs
index 2e043346..ed985d09 100644
--- a/pkg/app/testdata/app_lint_test/include-needs
+++ b/pkg/app/testdata/app_lint_test/include-needs
@@ -2,14 +2,12 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 2 release(s) matching app=test found in helmfile.yaml
 
-processing 4 groups of releases in this order:
+processing 3 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/logging
-2     default/kube-system/kubernetes-external-secrets
-3     default/default/external-secrets
-4     default/default/my-release
+1     default/kube-system/kubernetes-external-secrets
+2     default/default/external-secrets
+3     default/default/my-release
 
-processing releases in group 1/4: default/kube-system/logging
-processing releases in group 2/4: default/kube-system/kubernetes-external-secrets
-processing releases in group 3/4: default/default/external-secrets
-processing releases in group 4/4: default/default/my-release
+processing releases in group 1/3: default/kube-system/kubernetes-external-secrets
+processing releases in group 2/3: default/default/external-secrets
+processing releases in group 3/3: default/default/my-release
diff --git a/pkg/app/testdata/app_lint_test/include-needs_should_not_fail_on_disabled_direct_need b/pkg/app/testdata/app_lint_test/include-needs_should_not_fail_on_disabled_direct_need
index 3c08554b..3c22226f 100644
--- a/pkg/app/testdata/app_lint_test/include-needs_should_not_fail_on_disabled_direct_need
+++ b/pkg/app/testdata/app_lint_test/include-needs_should_not_fail_on_disabled_direct_need
@@ -2,10 +2,8 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test2 found in helmfile.yaml
 
-processing 2 groups of releases in this order:
+processing 1 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
+1     default//test2
 
-processing releases in group 1/2: default/kube-system/disabled
-processing releases in group 2/2: default//test2
+processing releases in group 1/1: default//test2
diff --git a/pkg/app/testdata/app_lint_test/include-needs_should_not_fail_on_disabled_transitive_need b/pkg/app/testdata/app_lint_test/include-needs_should_not_fail_on_disabled_transitive_need
index 8f55648a..3a218076 100644
--- a/pkg/app/testdata/app_lint_test/include-needs_should_not_fail_on_disabled_transitive_need
+++ b/pkg/app/testdata/app_lint_test/include-needs_should_not_fail_on_disabled_transitive_need
@@ -2,12 +2,10 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test3 found in helmfile.yaml
 
-processing 3 groups of releases in this order:
+processing 2 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
-3     default//test3
+1     default//test2
+2     default//test3
 
-processing releases in group 1/3: default/kube-system/disabled
-processing releases in group 2/3: default//test2
-processing releases in group 3/3: default//test3
+processing releases in group 1/2: default//test2
+processing releases in group 2/2: default//test3
diff --git a/pkg/app/testdata/app_lint_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_direct_need b/pkg/app/testdata/app_lint_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_direct_need
index 3c08554b..3c22226f 100644
--- a/pkg/app/testdata/app_lint_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_direct_need
+++ b/pkg/app/testdata/app_lint_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_direct_need
@@ -2,10 +2,8 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test2 found in helmfile.yaml
 
-processing 2 groups of releases in this order:
+processing 1 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
+1     default//test2
 
-processing releases in group 1/2: default/kube-system/disabled
-processing releases in group 2/2: default//test2
+processing releases in group 1/1: default//test2
diff --git a/pkg/app/testdata/app_lint_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_transitive_need b/pkg/app/testdata/app_lint_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_transitive_need
index 8f55648a..3a218076 100644
--- a/pkg/app/testdata/app_lint_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_transitive_need
+++ b/pkg/app/testdata/app_lint_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_transitive_need
@@ -2,12 +2,10 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test3 found in helmfile.yaml
 
-processing 3 groups of releases in this order:
+processing 2 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
-3     default//test3
+1     default//test2
+2     default//test3
 
-processing releases in group 1/3: default/kube-system/disabled
-processing releases in group 2/3: default//test2
-processing releases in group 3/3: default//test3
+processing releases in group 1/2: default//test2
+processing releases in group 2/2: default//test3
diff --git a/pkg/app/testdata/app_lint_test/include-transitive-needs_should_not_fail_on_disabled_transitive_need b/pkg/app/testdata/app_lint_test/include-transitive-needs_should_not_fail_on_disabled_transitive_need
index 8f55648a..3a218076 100644
--- a/pkg/app/testdata/app_lint_test/include-transitive-needs_should_not_fail_on_disabled_transitive_need
+++ b/pkg/app/testdata/app_lint_test/include-transitive-needs_should_not_fail_on_disabled_transitive_need
@@ -2,12 +2,10 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test3 found in helmfile.yaml
 
-processing 3 groups of releases in this order:
+processing 2 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
-3     default//test3
+1     default//test2
+2     default//test3
 
-processing releases in group 1/3: default/kube-system/disabled
-processing releases in group 2/3: default//test2
-processing releases in group 3/3: default//test3
+processing releases in group 1/2: default//test2
+processing releases in group 2/2: default//test3
diff --git a/pkg/app/testdata/app_template_test/include-needs b/pkg/app/testdata/app_template_test/include-needs
index 2e043346..ed985d09 100644
--- a/pkg/app/testdata/app_template_test/include-needs
+++ b/pkg/app/testdata/app_template_test/include-needs
@@ -2,14 +2,12 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 2 release(s) matching app=test found in helmfile.yaml
 
-processing 4 groups of releases in this order:
+processing 3 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/logging
-2     default/kube-system/kubernetes-external-secrets
-3     default/default/external-secrets
-4     default/default/my-release
+1     default/kube-system/kubernetes-external-secrets
+2     default/default/external-secrets
+3     default/default/my-release
 
-processing releases in group 1/4: default/kube-system/logging
-processing releases in group 2/4: default/kube-system/kubernetes-external-secrets
-processing releases in group 3/4: default/default/external-secrets
-processing releases in group 4/4: default/default/my-release
+processing releases in group 1/3: default/kube-system/kubernetes-external-secrets
+processing releases in group 2/3: default/default/external-secrets
+processing releases in group 3/3: default/default/my-release
diff --git a/pkg/app/testdata/app_template_test/include-needs_should_not_fail_on_disabled_direct_need b/pkg/app/testdata/app_template_test/include-needs_should_not_fail_on_disabled_direct_need
index 0b468ae0..11b5a896 100644
--- a/pkg/app/testdata/app_template_test/include-needs_should_not_fail_on_disabled_direct_need
+++ b/pkg/app/testdata/app_template_test/include-needs_should_not_fail_on_disabled_direct_need
@@ -2,11 +2,9 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test2 found in helmfile.yaml
 
-processing 2 groups of releases in this order:
+processing 1 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
+1     default//test2
 
-processing releases in group 1/2: default/kube-system/disabled
-processing releases in group 2/2: default//test2
+processing releases in group 1/1: default//test2
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
diff --git a/pkg/app/testdata/app_template_test/include-needs_should_not_fail_on_disabled_transitive_need b/pkg/app/testdata/app_template_test/include-needs_should_not_fail_on_disabled_transitive_need
index 3bb8007e..b8b28277 100644
--- a/pkg/app/testdata/app_template_test/include-needs_should_not_fail_on_disabled_transitive_need
+++ b/pkg/app/testdata/app_template_test/include-needs_should_not_fail_on_disabled_transitive_need
@@ -2,13 +2,11 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test3 found in helmfile.yaml
 
-processing 3 groups of releases in this order:
+processing 2 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
-3     default//test3
+1     default//test2
+2     default//test3
 
-processing releases in group 1/3: default/kube-system/disabled
-processing releases in group 2/3: default//test2
-processing releases in group 3/3: default//test3
+processing releases in group 1/2: default//test2
+processing releases in group 2/2: default//test3
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
diff --git a/pkg/app/testdata/app_template_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_direct_need b/pkg/app/testdata/app_template_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_direct_need
index 0b468ae0..11b5a896 100644
--- a/pkg/app/testdata/app_template_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_direct_need
+++ b/pkg/app/testdata/app_template_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_direct_need
@@ -2,11 +2,9 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test2 found in helmfile.yaml
 
-processing 2 groups of releases in this order:
+processing 1 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
+1     default//test2
 
-processing releases in group 1/2: default/kube-system/disabled
-processing releases in group 2/2: default//test2
+processing releases in group 1/1: default//test2
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
diff --git a/pkg/app/testdata/app_template_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_transitive_need b/pkg/app/testdata/app_template_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_transitive_need
index 3bb8007e..b8b28277 100644
--- a/pkg/app/testdata/app_template_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_transitive_need
+++ b/pkg/app/testdata/app_template_test/include-needs_with_include-transitive-needs_should_not_fail_on_disabled_transitive_need
@@ -2,13 +2,11 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test3 found in helmfile.yaml
 
-processing 3 groups of releases in this order:
+processing 2 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
-3     default//test3
+1     default//test2
+2     default//test3
 
-processing releases in group 1/3: default/kube-system/disabled
-processing releases in group 2/3: default//test2
-processing releases in group 3/3: default//test3
+processing releases in group 1/2: default//test2
+processing releases in group 2/2: default//test3
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
diff --git a/pkg/app/testdata/app_template_test/include-transitive-needs_should_not_fail_on_disabled_transitive_need b/pkg/app/testdata/app_template_test/include-transitive-needs_should_not_fail_on_disabled_transitive_need
index 3bb8007e..b8b28277 100644
--- a/pkg/app/testdata/app_template_test/include-transitive-needs_should_not_fail_on_disabled_transitive_need
+++ b/pkg/app/testdata/app_template_test/include-transitive-needs_should_not_fail_on_disabled_transitive_need
@@ -2,13 +2,11 @@ merged environment: &{default  map[] map[] map[]}
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
 1 release(s) matching name=test3 found in helmfile.yaml
 
-processing 3 groups of releases in this order:
+processing 2 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/disabled
-2     default//test2
-3     default//test3
+1     default//test2
+2     default//test3
 
-processing releases in group 1/3: default/kube-system/disabled
-processing releases in group 2/3: default//test2
-processing releases in group 3/3: default//test3
+processing releases in group 1/2: default//test2
+processing releases in group 2/2: default//test3
 WARNING: release test2 needs disabled, but disabled is not installed due to installed: false. Either mark disabled as installed or remove disabled from test2's needs
diff --git a/pkg/app/testdata/app_unittest_test/include-needs b/pkg/app/testdata/app_unittest_test/include-needs
index f7f03251..f328fb5b 100644
--- a/pkg/app/testdata/app_unittest_test/include-needs
+++ b/pkg/app/testdata/app_unittest_test/include-needs
@@ -1,14 +1,12 @@
 merged environment: &{default  map[] map[] map[]}
 2 release(s) matching app=test found in helmfile.yaml
 
-processing 4 groups of releases in this order:
+processing 3 groups of releases in this order:
 GROUP RELEASES
-1     default/kube-system/logging
-2     default/kube-system/kubernetes-external-secrets
-3     default/default/external-secrets
-4     default/default/my-release
+1     default/kube-system/kubernetes-external-secrets
+2     default/default/external-secrets
+3     default/default/my-release
 
-processing releases in group 1/4: default/kube-system/logging
-processing releases in group 2/4: default/kube-system/kubernetes-external-secrets
-processing releases in group 3/4: default/default/external-secrets
-processing releases in group 4/4: default/default/my-release
+processing releases in group 1/3: default/kube-system/kubernetes-external-secrets
+processing releases in group 2/3: default/default/external-secrets
+processing releases in group 3/3: default/default/my-release
diff --git a/pkg/app/testdata/testapply_2/include-transitive-needs=true/log b/pkg/app/testdata/testapply_2/include-transitive-needs=true/log
index a4405c6a..d00bbb0d 100644
--- a/pkg/app/testdata/testapply_2/include-transitive-needs=true/log
+++ b/pkg/app/testdata/testapply_2/include-transitive-needs=true/log
@@ -22,7 +22,7 @@ rendering result of "helmfile.yaml.gotmpl.part.0":
 19: 
 
 merged environment: &{default  map[] map[] map[]}
-3 release(s) matching name=serviceA found in helmfile.yaml.gotmpl
+1 release(s) matching name=serviceA found in helmfile.yaml.gotmpl
 
 Affected releases are:
   serviceA (my/chart) UPDATED
diff --git a/pkg/config/deps.go b/pkg/config/deps.go
index f4dd4608..fd1e3e91 100644
--- a/pkg/config/deps.go
+++ b/pkg/config/deps.go
@@ -32,6 +32,11 @@ func (d *DepsImpl) SkipRepos() bool {
 	return d.DepsOptions.SkipRepos
 }
 
+// IncludeNeeds returns the includeNeeds
+func (d *DepsImpl) IncludeNeeds() bool {
+	return false
+}
+
 // IncludeTransitiveNeeds returns the includeTransitiveNeeds
 func (d *DepsImpl) IncludeTransitiveNeeds() bool {
 	return false
diff --git a/pkg/config/repos.go b/pkg/config/repos.go
index 090b8cdf..3d9fe1bd 100644
--- a/pkg/config/repos.go
+++ b/pkg/config/repos.go
@@ -22,6 +22,11 @@ func NewReposImpl(g *GlobalImpl, b *ReposOptions) *ReposImpl {
 	}
 }
 
+// IncludeNeeds returns the include needs
+func (r *ReposImpl) IncludeNeeds() bool {
+	return false
+}
+
 // IncludeTransitiveNeeds returns the include transitive needs
 func (r *ReposImpl) IncludeTransitiveNeeds() bool {
 	return false
diff --git a/pkg/config/write-values.go b/pkg/config/write-values.go
index 5e5c2ffe..fcfda083 100644
--- a/pkg/config/write-values.go
+++ b/pkg/config/write-values.go
@@ -51,6 +51,11 @@ func (c *WriteValuesImpl) SkipCleanup() bool {
 	return false
 }
 
+// IncludeNeeds returns the include needs
+func (c *WriteValuesImpl) IncludeNeeds() bool {
+	return false
+}
+
 // IncludeTransitiveNeeds returns the include transitive needs
 func (c *WriteValuesImpl) IncludeTransitiveNeeds() bool {
 	return false
diff --git a/pkg/helmexec/exec.go b/pkg/helmexec/exec.go
index a2153576..dbc218a1 100644
--- a/pkg/helmexec/exec.go
+++ b/pkg/helmexec/exec.go
@@ -526,8 +526,13 @@ func (helm *execer) List(context HelmContext, filter string, flags ...string) (s
 	//
 	// This fixes it by removing the header from the v3 output, so that the output is formatted the same as that of v2.
 	lines := strings.Split(string(out), "\n")
-	lines = lines[1:]
-	out = []byte(strings.Join(lines, "\n"))
+	var filtered []string
+	for _, line := range lines[1:] {
+		if strings.TrimSpace(line) != "" {
+			filtered = append(filtered, line)
+		}
+	}
+	out = []byte(strings.Join(filtered, "\n"))
 	helm.info(out)
 	return string(out), err
 }
@@ -1136,7 +1141,8 @@ func resolveOciChart(ociChart string) (ociChartURL, ociChartTag string) {
 
 func (helm *execer) ShowChart(chartPath string) (chart.Metadata, error) {
 	var helmArgs = []string{"show", "chart", chartPath}
-	out, error := helm.exec(helmArgs, map[string]string{}, nil)
+	enableLiveOutput := false
+	out, error := helm.exec(helmArgs, map[string]string{}, &enableLiveOutput)
 	if error != nil {
 		return chart.Metadata{}, error
 	}
diff --git a/pkg/state/selector_include_needs_test.go b/pkg/state/selector_include_needs_test.go
new file mode 100644
index 00000000..917cc8c5
--- /dev/null
+++ b/pkg/state/selector_include_needs_test.go
@@ -0,0 +1,346 @@
+package state
+
+import (
+	"testing"
+
+	"github.com/google/go-cmp/cmp"
+)
+
+// TestIncludeNeedsVsIncludeTransitiveNeeds demonstrates the difference between
+// --include-needs and --include-transitive-needs flags.
+//
+// Behavior Summary:
+// 1. --include-needs: Includes only DIRECT dependencies (immediate needs) of selected releases
+// 2. --include-transitive-needs: Includes ALL dependencies including transitive ones (needs of needs)
+//
+// Example dependency graph:
+//
+//	appA -> appB -> appC
+//	appA -> appD
+//
+// When selecting appA with:
+// - No flags: Only appA (fails if needs are not satisfied)
+// - --include-needs: appA, appB, appD (only direct needs)
+// - --include-transitive-needs: appA, appB, appC, appD (all needs including transitive)
+func TestIncludeNeedsVsIncludeTransitiveNeeds(t *testing.T) {
+	type testcase struct {
+		name                   string
+		selector               []string
+		includeNeeds           bool
+		includeTransitiveNeeds bool
+		want                   []string
+	}
+
+	// Dependency graph:
+	// appA needs [appB, appD]
+	// appB needs [appC]
+	// appC has no needs
+	// appD has no needs
+	// appE is independent (not in dependency chain)
+	testcases := []testcase{
+		{
+			name:                   "no include flags - only selected release",
+			selector:               []string{"name=appA"},
+			includeNeeds:           false,
+			includeTransitiveNeeds: false,
+			want:                   []string{"appA"},
+		},
+		{
+			name:                   "include-needs only - direct dependencies (appB, appD)",
+			selector:               []string{"name=appA"},
+			includeNeeds:           true,
+			includeTransitiveNeeds: false,
+			want:                   []string{"appA", "appB", "appD"},
+		},
+		{
+			name:                   "include-transitive-needs - all dependencies including transitive (appB, appC, appD)",
+			selector:               []string{"name=appA"},
+			includeNeeds:           false, // Note: includeTransitiveNeeds implies includeNeeds
+			includeTransitiveNeeds: true,
+			want:                   []string{"appA", "appB", "appC", "appD"},
+		},
+		{
+			name:                   "include-needs AND include-transitive-needs - same as include-transitive-needs alone",
+			selector:               []string{"name=appA"},
+			includeNeeds:           true,
+			includeTransitiveNeeds: true,
+			want:                   []string{"appA", "appB", "appC", "appD"},
+		},
+		{
+			name:                   "include-needs on leaf release (appC) - no dependencies to include",
+			selector:               []string{"name=appC"},
+			includeNeeds:           true,
+			includeTransitiveNeeds: false,
+			want:                   []string{"appC"},
+		},
+		{
+			name:                   "include-transitive-needs on middle release (appB) - includes appC",
+			selector:               []string{"name=appB"},
+			includeNeeds:           false,
+			includeTransitiveNeeds: true,
+			want:                   []string{"appB", "appC"},
+		},
+		{
+			name:                   "include-needs on middle release (appB) - includes only appC (direct need)",
+			selector:               []string{"name=appB"},
+			includeNeeds:           true,
+			includeTransitiveNeeds: false,
+			want:                   []string{"appB", "appC"},
+		},
+	}
+
+	example := []byte(`releases:
+- name: appA
+  namespace: default
+  chart: stable/testchart
+  needs:
+    - appB
+    - appD
+- name: appB
+  namespace: default
+  chart: stable/testchart
+  needs:
+    - appC
+- name: appC
+  namespace: default
+  chart: stable/testchart
+- name: appD
+  namespace: default
+  chart: stable/testchart
+- name: appE
+  namespace: default
+  chart: stable/testchart
+`)
+
+	for _, tc := range testcases {
+		t.Run(tc.name, func(t *testing.T) {
+			state := stateTestEnv{
+				Files: map[string]string{
+					"/helmfile.yaml": string(example),
+				},
+				WorkDir: "/",
+			}.MustLoadState(t, "/helmfile.yaml", "default")
+
+			var err error
+			state.Selectors = tc.selector
+			state.Releases, err = state.GetReleasesWithOverrides()
+			if err != nil {
+				t.Fatalf("GetReleasesWithOverrides failed: %v", err)
+			}
+			state.Releases = state.GetReleasesWithLabels()
+
+			// GetSelectedReleases(includeNeeds, includeTransitiveNeeds)
+			rs, err := state.GetSelectedReleases(tc.includeNeeds, tc.includeTransitiveNeeds)
+			if err != nil {
+				t.Fatalf("GetSelectedReleases failed: %v", err)
+			}
+
+			var got []string
+			for _, r := range rs {
+				got = append(got, r.Name)
+			}
+
+			if d := cmp.Diff(tc.want, got); d != "" {
+				t.Errorf("unexpected releases: want (-), got (+):\n%s", d)
+			}
+		})
+	}
+}
+
+// TestIncludeNeedsWithDeepTransitiveChain tests a deeper transitive dependency chain
+// to ensure --include-needs only includes direct dependencies.
+//
+// Dependency graph: app1 -> app2 -> app3 -> app4
+//
+// With --include-needs on app1: should include app1, app2 (direct only)
+// With --include-transitive-needs on app1: should include app1, app2, app3, app4
+func TestIncludeNeedsWithDeepTransitiveChain(t *testing.T) {
+	type testcase struct {
+		name                   string
+		selector               []string
+		includeNeeds           bool
+		includeTransitiveNeeds bool
+		want                   []string
+	}
+
+	testcases := []testcase{
+		{
+			name:                   "include-needs on deep chain - direct dependency only",
+			selector:               []string{"name=app1"},
+			includeNeeds:           true,
+			includeTransitiveNeeds: false,
+			want:                   []string{"app1", "app2"},
+		},
+		{
+			name:                   "include-transitive-needs on deep chain - all dependencies",
+			selector:               []string{"name=app1"},
+			includeNeeds:           false,
+			includeTransitiveNeeds: true,
+			want:                   []string{"app1", "app2", "app3", "app4"},
+		},
+		{
+			name:                   "include-needs from middle of chain",
+			selector:               []string{"name=app2"},
+			includeNeeds:           true,
+			includeTransitiveNeeds: false,
+			want:                   []string{"app2", "app3"},
+		},
+		{
+			name:                   "include-transitive-needs from middle of chain",
+			selector:               []string{"name=app2"},
+			includeNeeds:           false,
+			includeTransitiveNeeds: true,
+			want:                   []string{"app2", "app3", "app4"},
+		},
+	}
+
+	example := []byte(`releases:
+- name: app1
+  namespace: default
+  chart: stable/testchart
+  needs:
+    - app2
+- name: app2
+  namespace: default
+  chart: stable/testchart
+  needs:
+    - app3
+- name: app3
+  namespace: default
+  chart: stable/testchart
+  needs:
+    - app4
+- name: app4
+  namespace: default
+  chart: stable/testchart
+`)
+
+	for _, tc := range testcases {
+		t.Run(tc.name, func(t *testing.T) {
+			state := stateTestEnv{
+				Files: map[string]string{
+					"/helmfile.yaml": string(example),
+				},
+				WorkDir: "/",
+			}.MustLoadState(t, "/helmfile.yaml", "default")
+
+			var err error
+			state.Selectors = tc.selector
+			state.Releases, err = state.GetReleasesWithOverrides()
+			if err != nil {
+				t.Fatalf("GetReleasesWithOverrides failed: %v", err)
+			}
+			state.Releases = state.GetReleasesWithLabels()
+
+			rs, err := state.GetSelectedReleases(tc.includeNeeds, tc.includeTransitiveNeeds)
+			if err != nil {
+				t.Fatalf("GetSelectedReleases failed: %v", err)
+			}
+
+			var got []string
+			for _, r := range rs {
+				got = append(got, r.Name)
+			}
+
+			if d := cmp.Diff(tc.want, got); d != "" {
+				t.Errorf("unexpected releases: want (-), got (+):\n%s", d)
+			}
+		})
+	}
+}
+
+// TestIncludeNeedsWithMultipleDirectNeeds tests that --include-needs includes
+// all direct needs but not transitive needs of those direct needs.
+//
+// Dependency graph:
+//
+//	frontend -> [backend-api, backend-worker]
+//	backend-api -> database
+//	backend-worker -> database
+//	database -> cache
+func TestIncludeNeedsWithMultipleDirectNeeds(t *testing.T) {
+	type testcase struct {
+		name                   string
+		selector               []string
+		includeNeeds           bool
+		includeTransitiveNeeds bool
+		want                   []string
+	}
+
+	testcases := []testcase{
+		{
+			name:                   "include-needs - direct needs only (backend-api, backend-worker)",
+			selector:               []string{"name=frontend"},
+			includeNeeds:           true,
+			includeTransitiveNeeds: false,
+			want:                   []string{"frontend", "backend-api", "backend-worker"},
+		},
+		{
+			name:                   "include-transitive-needs - all needs (backend-api, backend-worker, database, cache)",
+			selector:               []string{"name=frontend"},
+			includeNeeds:           false,
+			includeTransitiveNeeds: true,
+			want:                   []string{"frontend", "backend-api", "backend-worker", "database", "cache"},
+		},
+	}
+
+	example := []byte(`releases:
+- name: frontend
+  namespace: default
+  chart: stable/testchart
+  needs:
+    - backend-api
+    - backend-worker
+- name: backend-api
+  namespace: default
+  chart: stable/testchart
+  needs:
+    - database
+- name: backend-worker
+  namespace: default
+  chart: stable/testchart
+  needs:
+    - database
+- name: database
+  namespace: default
+  chart: stable/testchart
+  needs:
+    - cache
+- name: cache
+  namespace: default
+  chart: stable/testchart
+`)
+
+	for _, tc := range testcases {
+		t.Run(tc.name, func(t *testing.T) {
+			state := stateTestEnv{
+				Files: map[string]string{
+					"/helmfile.yaml": string(example),
+				},
+				WorkDir: "/",
+			}.MustLoadState(t, "/helmfile.yaml", "default")
+
+			var err error
+			state.Selectors = tc.selector
+			state.Releases, err = state.GetReleasesWithOverrides()
+			if err != nil {
+				t.Fatalf("GetReleasesWithOverrides failed: %v", err)
+			}
+			state.Releases = state.GetReleasesWithLabels()
+
+			rs, err := state.GetSelectedReleases(tc.includeNeeds, tc.includeTransitiveNeeds)
+			if err != nil {
+				t.Fatalf("GetSelectedReleases failed: %v", err)
+			}
+
+			var got []string
+			for _, r := range rs {
+				got = append(got, r.Name)
+			}
+
+			if d := cmp.Diff(tc.want, got); d != "" {
+				t.Errorf("unexpected releases: want (-), got (+):\n%s", d)
+			}
+		})
+	}
+}
diff --git a/pkg/state/selector_test.go b/pkg/state/selector_test.go
index e955aed4..fe6ff245 100644
--- a/pkg/state/selector_test.go
+++ b/pkg/state/selector_test.go
@@ -117,7 +117,7 @@ func TestSelectReleasesWithOverrides(t *testing.T) {
 		}
 		state.Releases = state.GetReleasesWithLabels()
 
-		rs, err := state.GetSelectedReleases(false)
+		rs, err := state.GetSelectedReleases(false, false)
 		if err != nil {
 			t.Fatalf("%s %s: %v", tc.selector, tc.subject, err)
 		}
@@ -139,20 +139,37 @@ func TestSelectReleasesWithOverridesWithIncludedTransitives(t *testing.T) {
 		subject                string
 		selector               []string
 		want                   []string
+		includeNeeds           bool
 		includeTransitiveNeeds bool
 	}
 
 	testcases := []testcase{
 		{
-			subject:                "include transitives is false",
+			subject:                "no needs inclusion",
 			selector:               []string{"name=serviceA"},
 			want:                   []string{"serviceA"},
+			includeNeeds:           false,
 			includeTransitiveNeeds: false,
 		},
 		{
-			subject:                "include transitives is true",
+			subject:                "include direct needs only",
+			selector:               []string{"name=serviceA"},
+			want:                   []string{"serviceA", "serviceB"},
+			includeNeeds:           true,
+			includeTransitiveNeeds: false,
+		},
+		{
+			subject:                "include transitive needs",
 			selector:               []string{"name=serviceA"},
 			want:                   []string{"serviceA", "serviceB", "serviceC"},
+			includeNeeds:           false,
+			includeTransitiveNeeds: true,
+		},
+		{
+			subject:                "include both direct and transitive needs",
+			selector:               []string{"name=serviceA"},
+			want:                   []string{"serviceA", "serviceB", "serviceC"},
+			includeNeeds:           true,
 			includeTransitiveNeeds: true,
 		},
 	}
@@ -192,7 +209,7 @@ func TestSelectReleasesWithOverridesWithIncludedTransitives(t *testing.T) {
 		}
 		state.Releases = state.GetReleasesWithLabels()
 
-		rs, err := state.GetSelectedReleases(tc.includeTransitiveNeeds)
+		rs, err := state.GetSelectedReleases(tc.includeNeeds, tc.includeTransitiveNeeds)
 		if err != nil {
 			t.Fatalf("%s %s: %v", tc.selector, tc.subject, err)
 		}
@@ -208,3 +225,53 @@ func TestSelectReleasesWithOverridesWithIncludedTransitives(t *testing.T) {
 		}
 	}
 }
+
+func TestSelectReleasesWithIncludeNeedsCrossNamespace(t *testing.T) {
+	// When multiple releases share the same name across different namespaces,
+	// includeNeeds should resolve the correct dependency using fully-qualified IDs
+	// rather than name-based lookup (which would be ambiguous).
+	example := []byte(`releases:
+- name: frontend
+  namespace: team-a
+  chart: stable/testchart
+  needs:
+    - team-a/backend
+- name: backend
+  namespace: team-a
+  chart: stable/testchart
+- name: backend
+  namespace: team-b
+  chart: stable/testchart
+`)
+
+	state := stateTestEnv{
+		Files: map[string]string{
+			"/helmfile.yaml": string(example),
+		},
+		WorkDir: "/",
+	}.MustLoadState(t, "/helmfile.yaml", "default")
+
+	state.Selectors = []string{"name=frontend"}
+	var err error
+	state.Releases, err = state.GetReleasesWithOverrides()
+	if err != nil {
+		t.Fatal(err)
+	}
+	state.Releases = state.GetReleasesWithLabels()
+
+	rs, err := state.GetSelectedReleases(true, false)
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	var got []string
+	for _, r := range rs {
+		got = append(got, r.Namespace+"/"+r.Name)
+	}
+
+	// Should include team-a/backend (direct need) but NOT team-b/backend
+	want := []string{"team-a/frontend", "team-a/backend"}
+	if d := cmp.Diff(want, got); d != "" {
+		t.Errorf("cross-namespace include-needs: %s", d)
+	}
+}
diff --git a/pkg/state/state.go b/pkg/state/state.go
index f51a0dd1..dbf0ad9f 100644
--- a/pkg/state/state.go
+++ b/pkg/state/state.go
@@ -857,10 +857,18 @@ func (st *HelmState) isReleaseInstalled(context helmexec.HelmContext, helm helme
 
 func (st *HelmState) DetectReleasesToBeDeletedForSync(helm helmexec.Interface, releases []ReleaseSpec) ([]ReleaseSpec, error) {
 	deleted := []ReleaseSpec{}
+	checked := make(map[string]bool)
+
 	for i := range releases {
 		release := releases[i]
 
 		if !release.Desired() {
+			id := ReleaseToID(&release)
+			if checked[id] {
+				continue
+			}
+			checked[id] = true
+
 			installed, err := st.isReleaseInstalled(st.createHelmContext(&release, 0), helm, release)
 			if err != nil {
 				return nil, err
@@ -1350,6 +1358,7 @@ type ChartPrepareOptions struct {
 	WaitForJobs            bool
 	OutputDir              string
 	OutputDirTemplate      string
+	IncludeNeeds           bool
 	IncludeTransitiveNeeds bool
 	Concurrency            int
 	KubeVersion            string
@@ -1833,7 +1842,7 @@ func (st *HelmState) PrepareCharts(helm helmexec.Interface, dir string, concurre
 		}
 		*st = *updated
 	}
-	selected, err := st.GetSelectedReleases(opts.IncludeTransitiveNeeds)
+	selected, err := st.GetSelectedReleases(opts.IncludeNeeds, opts.IncludeTransitiveNeeds)
 	if err != nil {
 		return nil, []error{err}
 	}
@@ -2956,16 +2965,16 @@ func (st *HelmState) GetReleasesWithLabels() []ReleaseSpec {
 	return rs
 }
 
-func (st *HelmState) SelectReleases(includeTransitiveNeeds bool) ([]Release, error) {
+func (st *HelmState) SelectReleases(includeNeeds bool, includeTransitiveNeeds bool) ([]Release, error) {
 	values := st.Values()
-	rs, err := markExcludedReleases(st.Releases, st.Selectors, values, includeTransitiveNeeds)
+	rs, err := markExcludedReleases(st.Releases, st.Selectors, values, includeNeeds, includeTransitiveNeeds)
 	if err != nil {
 		return nil, err
 	}
 	return rs, nil
 }
 
-func markExcludedReleases(releases []ReleaseSpec, selectors []string, values map[string]any, includeTransitiveNeeds bool) ([]Release, error) {
+func markExcludedReleases(releases []ReleaseSpec, selectors []string, values map[string]any, includeNeeds bool, includeTransitiveNeeds bool) ([]Release, error) {
 	var filteredReleases []Release
 	filters := []ReleaseFilter{}
 	for _, label := range selectors {
@@ -2997,6 +3006,8 @@ func markExcludedReleases(releases []ReleaseSpec, selectors []string, values map
 	}
 	if includeTransitiveNeeds {
 		unmarkNeedsAndTransitives(filteredReleases, releases)
+	} else if includeNeeds {
+		unmarkNeedsDirectOnly(filteredReleases)
 	}
 	return filteredReleases, nil
 }
@@ -3054,11 +3065,48 @@ func unmarkNeedsAndTransitives(filteredReleases []Release, allReleases []Release
 	unmarkReleases(needsWithTranstives, filteredReleases)
 }
 
+func unmarkNeedsDirectOnly(filteredReleases []Release) {
+	directNeeds := collectDirectNeedsOnly(filteredReleases)
+	unmarkReleasesByNeedID(directNeeds, filteredReleases)
+}
+
+func collectDirectNeedsOnly(filteredReleases []Release) map[string]struct{} {
+	directNeeds := map[string]struct{}{}
+	for _, r := range filteredReleases {
+		if !r.Filtered {
+			for _, need := range r.ReleaseSpec.Needs {
+				// After ApplyOverrides/reformat(), need IDs are already fully-qualified
+				// (matching ReleaseToID format), so we collect them as-is.
+				directNeeds[need] = struct{}{}
+			}
+		}
+	}
+	return directNeeds
+}
+
+func unmarkReleasesByNeedID(toUnmark map[string]struct{}, releases []Release) {
+	for i := range releases {
+		releaseID := ReleaseToID(&releases[i].ReleaseSpec)
+		if _, ok := toUnmark[releaseID]; ok {
+			if releases[i].Desired() {
+				releases[i].Filtered = false
+			}
+		}
+	}
+}
+
 func collectAllNeedsWithTransitives(filteredReleases []Release, allReleases []ReleaseSpec) map[string]struct{} {
+	// Build an ID→ReleaseSpec map for efficient lookup by fully-qualified ID,
+	// avoiding cross-namespace ambiguity from name-based matching.
+	idToRelease := map[string]ReleaseSpec{}
+	for _, r := range allReleases {
+		idToRelease[ReleaseToID(&r)] = r
+	}
+
 	needsWithTranstives := map[string]struct{}{}
 	for _, r := range filteredReleases {
 		if !r.Filtered {
-			collectNeedsWithTransitives(r.ReleaseSpec, allReleases, needsWithTranstives)
+			collectNeedsWithTransitives(r.ReleaseSpec, idToRelease, needsWithTranstives)
 		}
 	}
 	return needsWithTranstives
@@ -3072,23 +3120,22 @@ func unmarkReleases(toUnmark map[string]struct{}, releases []Release) {
 	}
 }
 
-func collectNeedsWithTransitives(release ReleaseSpec, allReleases []ReleaseSpec, needsWithTranstives map[string]struct{}) {
+func collectNeedsWithTransitives(release ReleaseSpec, idToRelease map[string]ReleaseSpec, needsWithTranstives map[string]struct{}) {
 	for _, id := range release.Needs {
 		if _, exists := needsWithTranstives[id]; !exists {
 			needsWithTranstives[id] = struct{}{}
-			releaseParts := strings.Split(id, "/")
-			releaseName := releaseParts[len(releaseParts)-1]
-			for _, r := range allReleases {
-				if r.Name == releaseName {
-					collectNeedsWithTransitives(r, allReleases, needsWithTranstives)
-				}
+			// After ApplyOverrides/reformat(), need IDs are already fully-qualified
+			// (matching ReleaseToID format), so we look up by full ID to avoid
+			// cross-namespace ambiguity when multiple releases share the same name.
+			if r, ok := idToRelease[id]; ok {
+				collectNeedsWithTransitives(r, idToRelease, needsWithTranstives)
 			}
 		}
 	}
 }
 
-func (st *HelmState) GetSelectedReleases(includeTransitiveNeeds bool) ([]ReleaseSpec, error) {
-	filteredReleases, err := st.SelectReleases(includeTransitiveNeeds)
+func (st *HelmState) GetSelectedReleases(includeNeeds bool, includeTransitiveNeeds bool) ([]ReleaseSpec, error) {
+	filteredReleases, err := st.SelectReleases(includeNeeds, includeTransitiveNeeds)
 	if err != nil {
 		return nil, err
 	}
@@ -3103,8 +3150,8 @@ func (st *HelmState) GetSelectedReleases(includeTransitiveNeeds bool) ([]Release
 }
 
 // FilterReleases allows for the execution of helm commands against a subset of the releases in the helmfile.
-func (st *HelmState) FilterReleases(includeTransitiveNeeds bool) error {
-	releases, err := st.GetSelectedReleases(includeTransitiveNeeds)
+func (st *HelmState) FilterReleases(includeNeeds bool, includeTransitiveNeeds bool) error {
+	releases, err := st.GetSelectedReleases(includeNeeds, includeTransitiveNeeds)
 	if err != nil {
 		return err
 	}
@@ -3184,7 +3231,7 @@ func (st *HelmState) ResolveDeps() (*HelmState, error) {
 }
 
 // UpdateDeps wrapper for updating dependencies on the releases
-func (st *HelmState) UpdateDeps(helm helmexec.Interface, includeTransitiveNeeds bool) []error {
+func (st *HelmState) UpdateDeps(helm helmexec.Interface, includeNeeds bool, includeTransitiveNeeds bool) []error {
 	var selected []ReleaseSpec
 
 	if len(st.Selectors) > 0 {
@@ -3192,7 +3239,7 @@ func (st *HelmState) UpdateDeps(helm helmexec.Interface, includeTransitiveNeeds
 
 		// This and releasesNeedCharts ensures that we run operations like helm-dep-build and prepare-hook calls only on
 		// releases that are (1) selected by the selectors and (2) to be installed.
-		selected, err = st.GetSelectedReleases(includeTransitiveNeeds)
+		selected, err = st.GetSelectedReleases(includeNeeds, includeTransitiveNeeds)
 		if err != nil {
 			return []error{err}
 		}
diff --git a/pkg/state/state_run.go b/pkg/state/state_run.go
index 53646bc9..70e0d4a3 100644
--- a/pkg/state/state_run.go
+++ b/pkg/state/state_run.go
@@ -99,7 +99,7 @@ type PlanOptions struct {
 }
 
 func (st *HelmState) PlanReleases(opts PlanOptions) ([][]Release, error) {
-	marked, err := st.SelectReleases(opts.IncludeTransitiveNeeds)
+	marked, err := st.SelectReleases(opts.IncludeNeeds, opts.IncludeTransitiveNeeds)
 	if err != nil {
 		return nil, err
 	}
@@ -140,10 +140,11 @@ func GroupReleasesByDependency(releases []Release, opts PlanOptions) ([][]Releas
 		idToReleases[id] = append(idToReleases[id], r)
 		idToIndex[id] = i
 
+		// After ApplyOverrides/reformat(), need IDs are already fully-qualified
+		// (matching ReleaseToID format), so we pass them as-is.
 		var needs []string
 		for i := 0; i < len(r.Needs); i++ {
-			n := r.Needs[i]
-			needs = append(needs, n)
+			needs = append(needs, r.Needs[i])
 		}
 		d.Add(id, dag.Dependencies(needs))
 	}
@@ -154,17 +155,43 @@ func GroupReleasesByDependency(releases []Release, opts PlanOptions) ([][]Releas
 	}
 
 	var selectedReleaseIDs []string
+	if len(opts.SelectedReleases) > 0 {
+		// When SelectedReleases is explicitly provided (e.g., by the delete/destroy path),
+		// use it directly to determine which releases to plan.
+		for _, r := range opts.SelectedReleases {
+			release := r
+			id := ReleaseToID(&release)
+			selectedReleaseIDs = append(selectedReleaseIDs, id)
+		}
+	} else {
+		// Otherwise, use the Filtered flag set by SelectReleases/markExcludedReleases
+		for _, r := range releases {
+			if !r.Filtered {
+				id := ReleaseToID(&r.ReleaseSpec)
+				selectedReleaseIDs = append(selectedReleaseIDs, id)
+			}
+		}
+	}
 
-	for _, r := range opts.SelectedReleases {
-		release := r
-		id := ReleaseToID(&release)
-		selectedReleaseIDs = append(selectedReleaseIDs, id)
+	// When SelectedReleases is explicitly provided, use the DAG's dependency
+	// inclusion (WithDependencies) since markExcludedReleases doesn't apply.
+	// When using the Filtered flag path (no SelectedReleases), needs are already
+	// handled by markExcludedReleases, so WithDependencies stays false.
+	withDeps := false
+	skipDepValidation := opts.SkipNeeds
+	if len(opts.SelectedReleases) > 0 {
+		withDeps = opts.IncludeNeeds
+		skipDepValidation = opts.SkipNeeds
+	} else {
+		if opts.IncludeNeeds && !opts.IncludeTransitiveNeeds {
+			skipDepValidation = true
+		}
 	}
 
 	plan, err := d.Plan(dag.SortOptions{
 		Only:                selectedReleaseIDs,
-		WithDependencies:    opts.IncludeNeeds,
-		WithoutDependencies: opts.SkipNeeds,
+		WithDependencies:    withDeps,
+		WithoutDependencies: skipDepValidation,
 	})
 	if err != nil {
 		if ude, ok := err.(*dag.UnhandledDependencyError); ok {
diff --git a/pkg/state/state_test.go b/pkg/state/state_test.go
index 0d10624a..97632775 100644
--- a/pkg/state/state_test.go
+++ b/pkg/state/state_test.go
@@ -3007,7 +3007,7 @@ generated: 2019-05-16T15:42:45.50486+09:00
 	})
 	fs.Cwd = basePath
 	state = injectFs(state, fs)
-	errs := state.UpdateDeps(helm, false)
+	errs := state.UpdateDeps(helm, false, false)
 
 	want := []string{"/example", "./example", generatedDir}
 	if !reflect.DeepEqual(helm.Charts, want) {
@@ -3476,7 +3476,7 @@ func TestHelmState_NoReleaseMatched(t *testing.T) {
 				RenderedValues: map[string]any{},
 			}
 			state.Selectors = []string{tt.labels}
-			errs := state.FilterReleases(false)
+			errs := state.FilterReleases(false, false)
 			if (errs != nil) != tt.wantErr {
 				t.Errorf("ReleaseStatuses() for %s error = %v, wantErr %v", tt.name, errs, tt.wantErr)
 				return
diff --git a/test/integration/run.sh b/test/integration/run.sh
index 14d4b435..5a2f1d99 100755
--- a/test/integration/run.sh
+++ b/test/integration/run.sh
@@ -142,6 +142,7 @@ ${kubectl} create namespace ${test_ns} || fail "Could not create namespace ${tes
 . ${dir}/test-cases/issue-2431.sh
 . ${dir}/test-cases/issue-2544.sh
 . ${dir}/test-cases/kubedog-tracking.sh
+. ${dir}/test-cases/include-needs-transitive.sh
 
 # ALL DONE -----------------------------------------------------------------------------------------------------------
 
diff --git a/test/integration/test-cases/diff-args/output/apply-live-stderr b/test/integration/test-cases/diff-args/output/apply-live-stderr
index 7f789424..f8ac5385 100644
--- a/test/integration/test-cases/diff-args/output/apply-live-stderr
+++ b/test/integration/test-cases/diff-args/output/apply-live-stderr
@@ -4,7 +4,6 @@ Listing releases matching ^uninstalled$
 Upgrading release=installed, chart=../../../charts/httpbin, namespace=helmfile-tests
 Listing releases matching ^installed$
 
-
 UPDATED RELEASES:
 NAME        NAMESPACE        CHART                     VERSION   DURATION
 
diff --git a/test/integration/test-cases/diff-args/output/apply-live-stderr-helm4 b/test/integration/test-cases/diff-args/output/apply-live-stderr-helm4
index 7f789424..f8ac5385 100644
--- a/test/integration/test-cases/diff-args/output/apply-live-stderr-helm4
+++ b/test/integration/test-cases/diff-args/output/apply-live-stderr-helm4
@@ -4,7 +4,6 @@ Listing releases matching ^uninstalled$
 Upgrading release=installed, chart=../../../charts/httpbin, namespace=helmfile-tests
 Listing releases matching ^installed$
 
-
 UPDATED RELEASES:
 NAME        NAMESPACE        CHART                     VERSION   DURATION
 
diff --git a/test/integration/test-cases/diff-args/output/apply-stderr b/test/integration/test-cases/diff-args/output/apply-stderr
index 6a5025e3..86c52fa9 100644
--- a/test/integration/test-cases/diff-args/output/apply-stderr
+++ b/test/integration/test-cases/diff-args/output/apply-stderr
@@ -10,7 +10,6 @@ TEST SUITE: None
 
 Listing releases matching ^installed$
 
-
 UPDATED RELEASES:
 NAME        NAMESPACE        CHART                     VERSION   DURATION
 
diff --git a/test/integration/test-cases/diff-args/output/apply-stderr-helm4 b/test/integration/test-cases/diff-args/output/apply-stderr-helm4
index 088d699a..c14a22b5 100644
--- a/test/integration/test-cases/diff-args/output/apply-stderr-helm4
+++ b/test/integration/test-cases/diff-args/output/apply-stderr-helm4
@@ -11,7 +11,6 @@ TEST SUITE: None
 
 Listing releases matching ^installed$
 
-
 UPDATED RELEASES:
 NAME        NAMESPACE        CHART                     VERSION   DURATION
 
diff --git a/test/integration/test-cases/include-needs-transitive.sh b/test/integration/test-cases/include-needs-transitive.sh
new file mode 100644
index 00000000..cf1f7806
--- /dev/null
+++ b/test/integration/test-cases/include-needs-transitive.sh
@@ -0,0 +1,58 @@
+#!/usr/bin/env bash
+
+# Test case for --include-needs vs --include-transitive-needs
+# This test verifies that:
+# 1. --include-needs includes only direct dependencies
+# 2. --include-transitive-needs includes all transitive dependencies
+# 3. Log message shows correct count of releases matching selector (not including needs)
+
+include_needs_case_input_dir="${cases_dir}/include-needs-transitive/input"
+include_needs_tmp=$(mktemp -d)
+
+test_start "include-needs vs include-transitive-needs"
+
+# Test 1: --include-needs should include only direct dependencies
+info "Testing --include-needs includes only direct dependencies"
+${helmfile} -f ${include_needs_case_input_dir}/helmfile.yaml -l name=service-a template --include-needs > ${include_needs_tmp}/include-needs.log 2>&1 || fail "helmfile template --include-needs should not fail"
+
+# Verify that service-a, service-b are included in the output (service-b is direct need of service-a)
+# service-c should NOT be included (it's transitive, not direct)
+include_needs_output=$(cat ${include_needs_tmp}/include-needs.log)
+
+if echo "${include_needs_output}" | grep -q "name: service-a" && \
+   echo "${include_needs_output}" | grep -q "name: service-b" && \
+   ! echo "${include_needs_output}" | grep -q "name: service-c"; then
+    info "--include-needs correctly includes only direct dependencies (service-a, service-b)"
+else
+    cat ${include_needs_tmp}/include-needs.log
+    fail "--include-needs should include only service-a and service-b (direct need), not service-c (transitive)"
+fi
+
+# Test 2: --include-transitive-needs should include all transitive dependencies
+info "Testing --include-transitive-needs includes all transitive dependencies"
+${helmfile} -f ${include_needs_case_input_dir}/helmfile.yaml -l name=service-a template --include-transitive-needs > ${include_needs_tmp}/include-transitive-needs.log 2>&1 || fail "helmfile template --include-transitive-needs should not fail"
+
+# Verify that service-a, service-b, service-c are all included
+transitive_output=$(cat ${include_needs_tmp}/include-transitive-needs.log)
+
+if echo "${transitive_output}" | grep -q "name: service-a" && \
+   echo "${transitive_output}" | grep -q "name: service-b" && \
+   echo "${transitive_output}" | grep -q "name: service-c"; then
+    info "--include-transitive-needs correctly includes all transitive dependencies (service-a, service-b, service-c)"
+else
+    cat ${include_needs_tmp}/include-transitive-needs.log
+    fail "--include-transitive-needs should include service-a, service-b, and service-c (transitive)"
+fi
+
+# Test 3: Verify service-d is never included (not in dependency chain)
+if ! echo "${include_needs_output}" | grep -q "name: service-d" && \
+   ! echo "${transitive_output}" | grep -q "name: service-d"; then
+    info "service-d correctly not included (not in dependency chain)"
+else
+    fail "service-d should never be included as it's not in the dependency chain"
+fi
+
+# Cleanup
+rm -rf ${include_needs_tmp}
+
+test_pass "include-needs vs include-transitive-needs"
diff --git a/test/integration/test-cases/include-needs-transitive/input/helmfile.yaml b/test/integration/test-cases/include-needs-transitive/input/helmfile.yaml
new file mode 100644
index 00000000..0a432fb1
--- /dev/null
+++ b/test/integration/test-cases/include-needs-transitive/input/helmfile.yaml
@@ -0,0 +1,60 @@
+releases:
+  - name: service-a
+    chart: ../../../charts/raw
+    namespace: helmfile-tests
+    values:
+      - templates:
+          - |
+            apiVersion: v1
+            kind: ConfigMap
+            metadata:
+              name: {{ .Release.Name }}
+              namespace: {{ .Release.Namespace }}
+            data:
+              name: {{ .Release.Name }}
+    needs:
+      - service-b
+
+  - name: service-b
+    chart: ../../../charts/raw
+    namespace: helmfile-tests
+    values:
+      - templates:
+          - |
+            apiVersion: v1
+            kind: ConfigMap
+            metadata:
+              name: {{ .Release.Name }}
+              namespace: {{ .Release.Namespace }}
+            data:
+              name: {{ .Release.Name }}
+    needs:
+      - service-c
+
+  - name: service-c
+    chart: ../../../charts/raw
+    namespace: helmfile-tests
+    values:
+      - templates:
+          - |
+            apiVersion: v1
+            kind: ConfigMap
+            metadata:
+              name: {{ .Release.Name }}
+              namespace: {{ .Release.Namespace }}
+            data:
+              name: {{ .Release.Name }}
+
+  - name: service-d
+    chart: ../../../charts/raw
+    namespace: helmfile-tests
+    values:
+      - templates:
+          - |
+            apiVersion: v1
+            kind: ConfigMap
+            metadata:
+              name: {{ .Release.Name }}
+              namespace: {{ .Release.Namespace }}
+            data:
+              name: {{ .Release.Name }}