ITR Form 3- Big news for Income Taxpayers. After notifying ITR Form-1 and 4, the Income Tax Department has now also notified ITR Form-3. The Income Tax Department issued a post stating that ITR Form-3 has been notified for those individuals and HUFs whose income comes from business or profession. Earlier, the department had also notified ITR Form 1 and 4.
According to the post of the Income Tax Department, ITR-3 has been notified for the assessment year 2025-26. ITR-3 is filed by individuals and HUFs who own a business or do professional work. The limit for reporting assets and liabilities under ‘Schedule AL’ of the Income Tax Act has been increased from Rs 50 lakh to Rs 1 crore, reducing the burden of asset disclosure on middle-income group taxpayers.
Changes on Capital Gains
In the Schedule Capital Gain of the ITR form, now capital gains will have to be divided on the basis of whether they have arisen before or after 23 July 2024. In the budget presented on 24 July 2024, the government had proposed to reduce the long term capital gains tax on real estate from 20 per cent to 12.5 per cent, which will not include the benefit of indexation. Indexation benefit helps taxpayers to determine the cost price of the property after adjusting for inflation. This will help a lot in saving tax.
How to fill details in ITR
Individuals or HUFs who have purchased houses before July 23, 2024, can pay long-term capital gains (LTCG) tax without indexation at the rate of 12.5 per cent under the new scheme or pay 20 per cent tax by claiming indexation benefits. Sandeep Sehgal, Partner-Tax, tax consultancy firm AKM Global, says that the Central Board of Direct Taxes (CBDT) has made important updates in ITR Form 3 for assessment year 2025-26, making it easier for individuals and HUFs earning from business or profession to comply with it.
Dropdowns for deductions like section 80C of Income Tax and section wise TDS reporting have also been introduced, increasing transparency, accuracy and ease of filing. Earlier on April 29, the government had notified Income Tax Return (ITR) Forms 1 and 4 for the assessment year 2025-26, and made it easier to file returns for individuals with long-term capital gains of up to Rs 1.25 lakh from listed equities. The government has also made some changes in the form regarding tax deductions claimed under 80C, 80GG and other sections and has also provided a dropdown menu for ITR filers. Taxpayers will also have to fill section wise details regarding TDS deductions in ITR.