ITR-3 Now Available For E-Filing: What Business Owners And Investors Need To Know

Taxpayers who generate income from capital gains, foreign assets, or any business or professional activity not covered under simpler forms like ITR-1, ITR-2, or ITR-4, are also required to use ITR-3

To claim indexation benefits, resident taxpayers are required to separately declare the cost of acquisition and improvement for land or buildings transferred before July 23, 2024

Source : ABPLIVE AI

The Income Tax Department announced on Wednesday that taxpayers can now submit Form ITR-3 through its official e-filing portal. This update brings convenience to individuals with business income, those trading in shares—including futures and options—and investors in unlisted shares.

ITR-3 is designated for individuals and Hindu Undivided Families (HUFs) involved in business or professional activities. It is also applicable to those who hold directorships in companies or have invested in unlisted equity shares at any point during the financial year. Moreover, individuals receiving income from various sources, such as salaries, house properties, partner remuneration, or pensions, can use this form.

Taxpayers who generate income from capital gains, foreign assets, or any business or professional activity not covered under simpler forms like ITR-1 (Sahaj), ITR-2, or ITR-4 (Sugam), are also required to use ITR-3.

Mandatory Declarations And New Tax Regime Status

The latest version of the form includes a section requiring confirmation on whether Form 10-IEA was filed for Assessment Year 2024–25. Taxpayers must also declare their intention to either continue with or opt out of the new tax regime for the current assessment year.

Capital Gains Reporting Revisions

Following the budgetary changes to capital gains tax rates, significant updates have been made to Schedule CG and related sections. Taxpayers must now distinguish between gains made before and after July 23, 2024. The long-term capital gains (LTCG) tax has been revised to 12.5 per cent for all assets, up from the previous 10 per cent applicable to equities. Meanwhile, the short-term capital gains (STCG) tax on select assets, including equities, has increased to 20 per cent from 15 per cent. Listed financial assets held for over 12 months will now be treated as long-term holdings.

Additional Disclosures And Indexation Details

To claim indexation benefits, resident taxpayers are required to separately declare the cost of acquisition and improvement for land or buildings transferred before July 23, 2024. Furthermore, individuals with an annual income exceeding Rs 1 crore—raised from the previous threshold of Rs 50 lakh—must report their assets and liabilities at the close of the financial year, unless already disclosed under Part A – Balance Sheet.

New Capital Loss Reporting Row Introduced

An additional row has been included in Schedule CG for taxpayers to report capital losses arising from share buybacks under Section 68 of the Companies Act, 2013. This aims to improve clarity and compliance for shareholders affected by company buyback transactions.