The Income Tax Department has officially enabled online filing for ITR Form 3 for Assessment Year (AY) 2025-26 (Financial Year 2024-25). This means individuals and Hindu Undivided Families (HUFs) with business or professional income, including those involved in share trading (like F&O) or investments in unlisted shares, can now easily file their returns through the e-filing portal.
The department announced this on July 30, 2025, stating, “Kind Attention Taxpayers! Income Tax Return Form of ITR-3 is now enabled for filing through online mode.”
Who Should File ITR-3?
ITR-3 is your go-to form if you’re an individual or HUF earning income from a business or profession. This “master” form is also suitable if you have:
- Income from house property, salary or pension, capital gains, or other sources.
- Received remuneration from a partnership firm.
- Are a company director or an investor in unlisted equity shares.
Who Shouldn’t File ITR-3?
ITR-3 isn’t for everyone. You should not file this form if you are:
- An entity other than an individual or HUF (e.g., a company or LLP).
- An individual or HUF without income from a business, profession, or partnership firm.
- Eligible to file ITR-1, ITR-2, or ITR-4.
Key Updates for ITR-3 (AY 2025-26)
The Income Tax Department has introduced several important changes to ITR-3:
- Capital Gains Reporting: You’ll now need to report gains made separately for transactions before and after July 23, 2024, due to recent Finance Act amendments.
- Share Buyback Losses: If you incurred capital losses on share buybacks after October 1, 2024, you can now claim them, provided the corresponding dividend income is disclosed under “Income from Other Sources.”
- Asset & Liability Disclosure: The threshold for mandatory disclosure has increased. If your total income exceeds ₹1 crore (up from ₹50 lakh), you’ll need to report your assets and liabilities.
- Cruise Ship Business (Section 44BBC): There’s a new section to report income from the cruise ship business under presumptive taxation.
- Enhanced Deduction Reporting: Expect more detailed reporting requirements for deductions like those under Sections 80C and 10(13A).
- TDS Section Code: You’ll now need to report the TDS section code in Schedule-TDS.
What’s New in the ITR-3 Excel Utility?
According to CA Dr. Suresh Surana, here are seven key modifications in the ITR-3 Excel utility:
- Tax Regime Selection (Form 10-IEA): You’ll need to confirm if Form 10-IEA was submitted last year and declare your choice to opt in or out of the new tax regime.
- Revised Capital Gains: Updated fields in Schedule CG require distinct reporting for capital gains transactions before and on/after July 23, 2024.
- Separate Indexation Reporting: For land or building transfers before July 23, 2024, you must now separately disclose the cost of acquisition and improvement for accurate indexation.
- Increased Income Threshold: The new ₹1 crore total income limit (up from ₹50 lakh) triggers the requirement to report assets and liabilities.
- Section 44BBC: A new section specifically for reporting income under Section 44BBC (presumptive taxation for cruise ship businesses).
- New Row for Dividend Income: A dedicated row to report dividend income received from buyback proceeds (Section 2(22)(f)).
- Capital Loss from Share Buybacks: A specific row in Schedule CG to report capital losses from company share buybacks, provided related dividend income is disclosed.
Be sure to review these updates carefully to ensure your ITR-3 filing is accurate and compliant!