ITR-3 Form: Wait is over, Finally The Income Tax Department has released the new ITR-3 form for the assessment year 2025-26. Many changes have been made in this form, which will make tax filing easier and reduce paperwork, especially for middle-income people. Let’s know what’s new and what it means for you.

Who will fill the ITR-3 form?

The ITR-3 form is for people who:

Earn from business or profession (like freelancer, doctor, lawyer, consultant).

Are part of Hindu Undivided Family (HUF).

Simple forms like ITR-1 or ITR-4 are not eligible to be filled.

What is new in ITR-3 ?

The limit for disclosing assets and liabilities has increased. Earlier, if your annual income was more than Rs 50 lakh, you had to give details of your assets (such as property, bank balance) and liabilities (such as loans). Now this limit has been increased to Rs 1 crore.

Is it important for you?

If your income is less than 1 crore, then now you do not need to provide these details. This will provide great relief to middle-income business owners and professionals, as there will be less paperwork.

Capital gains need to be disclosed separately

If you have sold property or any long-term capital asset (such as shares), you will now have to show the income before and after July 23, 2024 separately.

Why? Because Budget 2024 has introduced new rules:

12.5% ​​long-term capital gains tax (LTCG) without indexation on sales after July 23, 2024.

Or the old rule: 20% tax, but benefit of indexation (increase in cost according to inflation).

If you purchased the property before July 23, 2024, you can choose whichever of the two is beneficial for you.

Claiming deduction made easy

The new form has added dropdown menus for deductions like Section 80C, 80GG. This will make claiming deductions to save tax easier and cleaner.

TDS details have to be given section-wise

Now the information of Tax Deducted at Source (TDS) will have to be given separately for each section. This will make things easier for both the taxpayer and the tax department to understand.

Why are these changes necessary?

According to Sandeep Sehgal, tax expert, AKM Global Partner-Tax, “These changes make tax filing easier for business owners and professionals. Dropdown menus and section-wise TDS reporting will increase transparency and reduce errors.”

These changes are part of an effort to make tax filing user-friendly and align with new tax rules (such as LTCG).

Impact of Budget 2024: What to keep in mind?

Selling property? You now have two options: 12.5% ​​tax without indexation or 20% tax with indexation.

Earnings before July 23, 2024 will come under the old rules.

Keep the sales documents, purchase cost and date ready for accurate reporting.