ITR filing for AY 2025-26: Seven major changes in ITR-3 Excel utility that all taxpayers including stock traders should note
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What are the new changes to ITR-3 tax form?
The threshold for mandatory reporting of assets and liabilities has been increased to Rs 1 crore, easing the compliance burden for many taxpayers.
Taxpayers now have to specify whether the transfer of a capital asset resulting in capital gains took place before or after July 23, 2024, as that would determine the applicable capital gains tax rates.
ITR-3 also provides for reporting of consideration received from buyback of shares after October 1, 2024 as dividend income while allowing for corresponding cost of acquisition to be carried forward as capital losses.
It provides for reporting of TDS under the specific Section under which tax has been deducted.
There are detailed disclosure requirements for deductions claimed to offset taxable income.
The reporting requirements for virtual digital assets have been expanded under ITR-3..
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What are the changes made in ITR-3 Excel utility that are relevant for all taxpayers?
Section 24(b) reporting: Now you need to give detailed information about you loan—like the lender's name, when the loan was sanctioned, the loan account number, the original loan amount, and the closing balance—if you want to claim deductions for home loan interest under Section 24(b).
Other deductions: Taxpayers must now furnish detailed information when claiming deductions under Sections 80E, 80EE, 80EEA, and 80EEB, including sanction dates and policy or certificate numbers, ensuring each deduction is fully backed by documentation. Additional fields have been introduced for more detailed disclosures under Sections 80C, 10(13A) (HRA), and others, requiring details like employer PAN or landlord details for HRA claims.
Capital gains: The forms now include segregated reporting of capital gains for transactions made before and after July 23, 2024, due to changes in indexation and taxation rules. Losses from share buybacks (post-October 1, 2024) can be claimed only if the corresponding dividend income is disclosed under "Income from Other Sources."
ITR-3 excel utility
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ITR-3 Capital gains
The Excel utilities of all income tax return (ITR) forms are now out, including ITR-2 and ITR-3 . ITR-2 is for folks with salaries, capital gains, crypto earnings, and so on, while ITR-3 is mainly for businesses that need to undergo tax audits, as well as individuals trading in futures and options (F&O). In short, ITR-3 is for those looking to declare their income under the category of Profits and Gains from Business and Profession (PGBP).But just like with other Excel utilities of ITR-1, ITR-2, etc, the ITR-3 Excel utility for Assessment Year (AY) 2025-26 too has some significant updates vis-a-vis last year's version.SR Patnaik, Partner (head - taxation), Cyril Amarchand Mangaldas, highlights the important changes introduced in ITR-3 Form for AY 2025-26:The Excel utility has been updates to reflect these changes in the ITR-3 form.Also read: Six changes in ITR-2 Excel Utility that all taxpayers should know before ITR filing for AY 2025-26 Ankit Jain, Partner, Ved Jain and Associates, highlights some of the changes in ITR-3 excel utility that are relevant for salaried employees with capital gains income:Chartered Accountant Ashish Niraj, Partner, A S N & Company, says: "ITR‑3 includes Section 44BBC for cruise shipping business/non‑resident affiliate. It was not there earlier. Now, section code is compulsory in the Schedule-TDS in ITR-3 form."Also read: Making these common mistakes with ITR-2 and ITR-3 while using excel based utilities? Here's how you can fix it Chartered Accountant Suresh Surana explains seven prominent changes in ITR-3 excel utility for AY 2025-26 which every taxpayer filing ITR-3 should know:Form ITR-3 now requires assessees to confirm whether Form 10-IEA was filed in AY 2024–25 (i.e., the preceding financial year), along with a declaration on whether they intend to continue with or opt out of the new tax regime for the current assessment year.Source: ITR-3 excel utilityDue to the changes in capital gains tax rates brought about by the Finance Act (No. 2), 2024, Schedule CG and other related Sections have been revised. Now, taxpayers have to report capital gains transactions separately for those done before and on or after July 23, 2024.Resident taxpayers are now required to separately provide details of the cost of acquisition and cost of improvement for any land or building transferred before July 23, 2024. This is intended to help apply indexation benefits for those transfers.Source: ITR-3 excel utilityTaxpayers with a total income of over Rs 1 crore (up from Rs 50 lakh) now need to disclose their assets and liabilities at the end of the financial year, except for those already covered under Part A – Balance Sheet.The updated form ITR-3 now includes provisions for reporting under Section 44BBC, which deals with presumptive taxation for income earned from operating cruise ships.A specific row has been added to report dividend income received in the form of buyback proceeds under Section 2(22)(f).Source: ITR-3 excel utilityThe updated form ITR-3 now includes a distinct row in Schedule CG for reporting capital losses that come from companies buying back shares from shareholders, as per Section 68 of the Companies Act, 2013. These losses can be claimed, as long as the corresponding dividend income is reported under the 'Income from Other Sources' category.Gaurav Makhijani (Head of Tax, North India and Gujarat) at Roedl & Partner India, says: "Few important changes are made in ITR-2 and ITR-3 to align with amendments in tax laws made last year's budget such as for reporting relating to capital gains and share buyback. in case of share buybacks carried out on or after October 1, 2024, the sale consideration should be 'Nil' under the capital gains schedule and the actual amount received from buy back will have to be shown as dividend income under 'Income from Other Sources' schedule."
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