Great news for many taxpayers! The Income Tax Department has just made ITR-3 available for online filing for Assessment Year (AY) 2025-26 (which means for income earned in Financial Year 2024-25). Until now, only the offline utility was available. This update is a game-changer, especially for those who need to file by the September 15 deadline for non-audit cases.
Who Should File ITR-3?
ITR-3 is specifically designed for individuals and Hindu Undivided Families (HUFs) who have income from a business or profession. This includes:
- Proprietors or partners in a firm (but not just salaried employees).
- Those earning from speculative activities like futures and options (F&O) trading, intraday trading, or currency/commodity trading.
- If you have capital gains, foreign assets, or income from more than one house property along with business income.
- If you’re a Director in a Company or hold unlisted equity shares.
- If you’ve opted for presumptive taxation but your income is above the specified thresholds, or if you want to declare lower profits than deemed under Sections 44AD, 44ADA, or 44AE.
What’s New in ITR-3 for AY 2025-26?
There are some important changes you need to be aware of for this assessment year:
- Capital Gains Cut-Off Date – July 23, 2024: This is a big one! The rules for capital gains on shares and mutual funds changed.
- Equity mutual funds and listed shares sold on or after July 23, 2024, will face higher tax rates: 12.5% for Long-Term Capital Gains (LTCG) (up from 10%) and 20% for Short-Term Capital Gains (STCG) (up from 15%).
- Sales before this date will still use the old rates (10% LTCG, 15% STCG).
- This means you’ll need to report gains separately based on whether they occurred before or after July 23, 2024, in Schedule CG.
- No Indexation for Some LTCG: For LTCG on assets like land and buildings acquired after July 23, 2024, the indexation benefit has been removed, with a flat tax rate of 12.5%. For properties bought before this date and sold after, you can choose between 12.5% without indexation or 20% with indexation.
- Higher Asset Reporting Threshold: The limit for mandatory reporting of assets and liabilities has increased to ₹1 crore (from ₹50 lakh), simplifying things for some.
- New Presumptive Taxation Section: A new Section 44BBC has been added for those with income from cruise operations under presumptive taxation.
- More Detailed Disclosures:
- You’ll need to provide more specific loan details for deductions claimed under Section 24(b) (interest on housing loans).
- Dividend income from share buybacks after October 1, 2024, now has specific reporting requirements.
- More granular reporting for TDS and detailed information for various deductions like those under Sections 80E, 80EE, 80EEA, and 80EEB.
- Expanded reporting for Virtual Digital Assets (VDAs).
- The form will ask about your tax regime selection (new vs. old) based on your AY 2024-25 filing.
Important Deadlines
- For individuals and professionals not requiring a tax audit: September 15, 2025.
- For those whose accounts require an audit: October 31, 2025 (with the audit report due by September 30, 2025).
Given the new complexities, especially with capital gains, it’s wise to file your ITR-3 well before the deadline. If you’re involved in capital market transactions or F&O trades, consider consulting a tax expert to ensure accuracy.
How to File ITR-3 Online:
- Head to the Income Tax e-filing portal: https://www.incometax.gov.in/iec/foportal/
- Log in using your PAN/Aadhaar and password.
- Click “File Income Tax Return” and select AY 2025-26.
- Choose ITR-3 as your form.
- Carefully fill in all schedules, especially Schedule CG (Capital Gains) and Schedule BP (Business or Profession).
- Verify and submit using an e-verification method like Aadhaar OTP, net banking, or a digital signature.
Ready to get your filing done? Don’t hesitate to reach out to a tax professional if you need assistance navigating these new changes!