ITR-3 Form Notified: What Are The Changes, Who Can File It?

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Even as the income tax department has notified ITR-1, ITR-3 and ITR-4 forms for AY 2025-26 (FY 2024-25), the income tax return filing is expected to start next week.

ITR-3 is primarily meant for individuals and Hindu Undivided Families (HUFs) having income under the head 'Profits and gains of business or profession', including freelancers.
ITR-3 is primarily meant for individuals and Hindu Undivided Families (HUFs) having income under the head 'Profits and gains of business or profession', including freelancers.

ITR-3 For Income Tax Return Filing 2025: The Central Board of Direct Taxes (CBDT) has notified Income Tax Return Form 3 (ITR-3) for Assessment Year 2025-26, applicable for income earned in the financial year 2024-25. While the form has been officially released, the utility for filing it electronically is still awaited.

It comes after the income tax department on April 29 notified ITR-1 and ITR-4 forms for AY 2025-26, and made it easier for individuals with long-term capital gains (LTCG) of up to Rs 1.25 lakh from listed equities to file returns.

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    What’s New in ITR-3 for AY 2025-26?

    Here are the key updates as per the new ITR-3 form notification:

    1. Capital Gains Segregation Based on July 23, 2024: A new split in Schedule Capital Gains is introduced to separately report gains before and after July 23, 2024, following changes in the Finance Act 2024.
    2. Capital Loss on Share Buyback Allowed Post October 1, 2024: From October 1, 2024, capital loss on buyback of listed shares is allowed only if corresponding dividend income is reported under “Income from Other Sources".
    3. Asset & Liability Reporting Threshold Doubled: Individuals now need to report assets and liabilities only if their total income exceeds Rs 1 crore, up from the earlier Rs 50 lakh threshold.
    4. Detailed Reporting of Deductions Under Sections 80C, 10(13A), etc. The form requires granular details for deductions such as investments under 80C, house rent allowance (10(13A)), and others—aimed at tightening verification and compliance.
    5. TDS Section Code in Schedule-TDS: The new format mandates disclosure of the TDS section code (e.g., 194A, 194H, etc.) in the Schedule-TDS, enhancing traceability of tax credits.

    Who Should File ITR-3?

    ITR-3 is primarily meant for individuals and Hindu Undivided Families (HUFs) having income under the head ‘Profits and gains of business or profession’, including:

    • Proprietors
    • Freelancers or professionals like doctors, lawyers, or consultants.
    • Partners in firms (but not those earning income from the firm as salary or interest—those should use ITR-2)
    • Taxpayers with income from house property, capital gains, and other sources can also use ITR-3 if they have business or professional income.

    When Will ITR Filing 2025 Start?

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      Even as the income tax department has notified ITR-1, ITR-3 and ITR-4 forms for the assessment year 2025-26 (financial year 2024-25), the income tax return filing is expected to start next week, according to experts. They said the ITR filing needs to start now in order to meet the July 31 deadline.

      July 31 is the deadline for ITRs that do not require an audit. For those who require audit will  have October 31 as the deadline.

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