Date of Notification: April 30, 2025
Effective From: Assessment Year 2025–26 (FY 2024–25)
Issued By: Central Board of Direct Taxes (CBDT), Ministry of Finance, Government of India
Applicable For: Individuals and Hindu Undivided Families (HUFs) having income from business or profession
The Central Board of Direct Taxes (CBDT) has notified the new ITR Form 3 via Notification No. 41/2025, dated 30th April 2025, under the Income-tax Rules, 1962.
ITR-1 and ITR 4 forms already notified earlier
Click here to download notification
🔍 Who Should Use ITR Form 3?
This form is applicable for:
- Individuals and HUFs having income from business or profession, including income under the head “profits and gains of business or profession”.
- Those not eligible to file ITR-1, ITR-2, or ITR-4.
🆕 Key Changes in ITR Form 3 for AY 2025–26
1. Capital Gain Schedule Modification
- A split in the reporting of capital gains before and after July 23, 2024 has been introduced.
- This aligns with the Finance Act, 2024 amendments, improving clarity in capital gains reporting due to legislative changes mid-year.
2. Capital Loss on Share Buyback
- A capital loss on share buyback is now allowed provided the corresponding dividend income is reported under ‘Income from Other Sources’.
- This change is effective from October 1, 2024.
3. Assets and Liabilities Reporting Threshold Raised
- The threshold for mandatory reporting of assets and liabilities in the ITR has been increased to ₹1 crore of total income, offering relief to smaller taxpayers.
4. New Section Reference: 44BBC
- A reference to Section 44BBC related to cruise business presumptive taxation has been added, helping specific taxpayers in that domain to declare income more efficiently.
5. Enhanced Deduction Reporting
- Detailed disclosure is now required for deductions under sections 80C, 10(13A) (House Rent Allowance), and others.
- This aims to streamline eligibility checks and avoid errors.
6. TDS Schedule Enhanced
- Taxpayers must now report TDS section codes in Schedule-TDS, increasing accuracy in reconciliation of TDS claims.
🧾 Additional Highlights
- E-filing Portal Enhancements: The ITR utility supports drop-downs, pre-filled data, and easier cross-verification of deductions and TDS.
- Voluntary Disclosure Triggers: Specific disclosures (like high-value foreign travel, electricity bills above ₹1 lakh, bank deposits over ₹1 crore, etc.) remain part of the ITR, ensuring high-value taxpayers comply.
- New Regime Declaration: Taxpayers must disclose if they opt in or out of the new tax regime under Section 115BAC, including filing of Form 10-IEA.
📲 Access and Filing
Taxpayers can file ITR 3 through:
- The Income Tax e-filing portal https://www.incometaxindia.gov.in
- Utilities supporting Java/Excel-based filing or direct online mode
You can contact team of Tax Experts to file Your ITR at 9150010300 or visit www.legalsahayak.com
The newly notified ITR Form 3 for AY 2025–26 is a step toward simplified yet detailed compliance. It incorporates the latest legislative changes, helps match incomes and deductions with disclosures, and promotes transparent tax administration. Taxpayers are encouraged to carefully review the changes, consult professionals if needed, and file timely to avoid penalties.
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