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Income Tax Return-3 Form Notified for AY 2025-26

Date of Notification: April 30, 2025
Applicable From: Assessment Year 2025–26 (Financial Year 2024–25)
Issued By: Central Board of Direct Taxes (CBDT), Ministry of Finance, Government of India
Form No.: Income Tax Return-3 Form Notified for AY 2025-26 ITR-3 (Notified via Notification No. 41/2025)

Income Tax Return-3 Form Notified for AY 2025-26 The Central Board of Direct Taxes (CBDT) has officially notified ITR Form 3 for Assessment Year (AY) 2025–26, marking an important update for individuals and Hindu Undivided Families (HUFs) with income from business or profession. This updated form reflects several key changes aligned with amendments made under the Finance Act, 2024.

Let’s break down the major changes and implications for taxpayers.

✅ Who Should File ITR Form 3?

ITR Form 3 is applicable for:

Individuals and HUFs earning income under the head “Profits and Gains of Business or Profession”
Taxpayers not eligible to file ITR-1, ITR-2, or ITR-4

Income Tax Return-3 Form Notified for AY 2025-26 This includes professionals, freelancers, consultants, and business owners who maintain regular books of accounts and are not covered under presumptive taxation (unless opting out of Section 44ADA or using Section 44BBC as applicable).

🔍 Key Changes in ITR-3 for AY 2025–26

1. Capital Gains Reporting Split: Before and After July 23, 2024

Taxpayers now need to segregate capital gains earned before and after July 23, 2024.
This change aligns with mid-year amendments introduced in the Finance Act, 2024, ensuring greater clarity in reporting.

2. Capital Loss on Share Buyback Allowed

Capital loss on share buyback is now permitted if the corresponding dividend income is reported under ‘Income from Other Sources’.
This update is effective from October 1, 2024, offering relief to investors impacted by buyback taxation.

3. Higher Threshold for Asset & Liability Disclosure

The requirement to disclose assets and liabilities in the ITR now applies only if total income exceeds ₹1 crore.
This is a welcome relief for small business owners and professionals, reducing compliance burden.

4. New Section 44BBC Introduced

A new presumptive taxation reference under Section 44BBC is included for taxpayers involved in the cruise business.
It simplifies income reporting for this niche sector.

5. Detailed Deduction Reporting Made Mandatory

Additional disclosures are required under sections like:
- 80C – Investments (LIC, PPF, ELSS, etc.)
- 10(13A) – House Rent Allowance (HRA)
- Other deduction sections as applicable
This ensures more accurate eligibility checks and prevents mismatch issues.

6. Improved TDS Schedule

TDS section codes must now be reported in Schedule-TDS, ensuring better reconciliation between TDS claimed and Form 26AS/TIS.

🧾 Additional Highlights for AY 2025–26

🔹 Enhanced E-Filing Utility

Pre-filled data, dropdowns, and cross-verification features are available on the updated e-filing utility.
Reduces manual errors and filing time.

🔹 Voluntary Disclosure Triggers Continue

High-value transactions like:
- Foreign travel exceeding ₹2 lakh
- Electricity bills over ₹1 lakh
- Bank deposits exceeding ₹1 crore
These must be reported, ensuring better monitoring of high-value taxpayers.

🔹 Declaration for New Tax Regime

Taxpayers must declare opting in or out of the new tax regime under Section 115BAC.
Form 10-IEA must be filed wherever applicable.

💻 How to File ITR Form 3 for AY 2025–26

You can file ITR-3 through any of the following methods:

Online filing via the Income Tax e-Filing Portal
Offline Java or Excel utility
Authorized ERI (e-return intermediaries) or tax professionals

📌 Final Thoughts

Income Tax Return-3 Form Notified for AY 2025-26 The newly notified ITR Form 3 reflects the government’s continued push toward transparent, digital, and detailed tax reporting. With several amendments in place for capital gains, TDS reconciliation, deduction clarity, and high-value transaction disclosures, taxpayers must review the changes closely.

If you’re a professional, business owner, or consultant—it’s best to consult a tax expert to ensure accurate reporting and timely filing to avoid notices or penalties.

👉 Important Filing Deadline:
July 31, 2025 (for non-audited cases)
October 31, 2025 (for audited cases under Section 44AB)

Need help understanding how these changes apply to your situation? Feel free to ask!

Sources Link – https://encr.pw/JaWp