The Income Tax Department has rolled out the Excel utility for ITR-3 for the financial year 2024-25 (Assessment Year 2025-26), introducing several crucial updates for taxpayers, particularly stock market traders.
Here’s a breakdown of the key modifications in the ITR-3 Excel utility:
1. Capital Gains Reporting Gets Granular:
- Date-Specific Segregation: A major change requires taxpayers to differentiate if capital gains were realized before or after July 23, 2024. This distinction is vital due to changes in tax and indexation rules effective from that date.
- Specifics for Share Buybacks: The Schedule CG now includes a dedicated row for reporting capital losses from company share buybacks under Section 68 of the Companies Act, 2013. These losses can be claimed if the corresponding dividend income is reported under ‘Income from Other Sources’, applicable to buybacks after October 2024.
2. Enhanced TDS (Tax Deducted at Source) Reporting:
- Section-Wise Clarity: TDS reporting is now mandated on a section-wise basis, aiming for greater transparency in tax credits. Taxpayers must report TDS under the specific section where the tax was deducted.
3. Deductions Require More Detail:
- In-depth Information: Expect to provide more comprehensive information for various deduction claims.
- Sections 80E, 80EE, 80EEA, and 80EEB: Detailed information and supporting documentation are now mandatory.
- Sections 80C and 10(13A) (House Rent Allowance): Additional fields have been introduced for more detailed disclosures, including PAN of the employer or landlord details.
- Section 24(b) (Home Loan Interest): Taxpayers must furnish detailed loan information, such as the lender’s name, sanction date, and loan account number.
4. Asset and Liability Reporting (Schedule AL) Threshold Increased:
- The mandatory reporting threshold for assets and liabilities under Schedule AL has been raised from ₹50 lakh to ₹1 crore. This means only individuals with a total income of ₹1 crore or more are now required to disclose their asset details.
5. Dedicated Row for Dividend Income:
- A new, specific row has been added in the utility for reporting dividend income received as buyback proceeds under Section 2(22)(f).
6. Presumptive Taxation Updates:
- The utility now incorporates new provisions under Section 44BBC for presumptive taxation related to cruise ship operations.
7. Capital Asset Transfer Details:
- Pre/Post July 23, 2024 Distinction: For properties transferred before July 23, 2024, resident taxpayers must now provide details on the cost of acquisition and improvement to ensure accurate indexation benefits. Similarly, the utility requires taxpayers to specify if capital gains from a capital asset transfer occurred before or after July 23, 2024, to determine the applicable tax rates.
8. Other Notable Changes:
- Form 10-IEA Confirmation: Taxpayers are now required to confirm whether they filed Form 10-IEA in the previous financial year, along with a declaration for their tax regime selection.
- Enhanced Substantiation: More detailed information, such as sanction dates and policy numbers, is now required to fully substantiate various claims.
These comprehensive changes are designed to streamline the ITR filing process, enhance compliance, and ensure accurate tax reporting for ITR-3 filers. Taxpayers should meticulously review these updates before submitting their ITR to ensure accuracy and prevent potential rejections.