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Mint
6 days ago
- Business
- Mint
Income Tax: Why you should make a special note of July 23 as you file your ITR? All you need to know
On July 23, 2024, Finance Minister Nirmala Sitharaman tabled Budget 2024-25, which carried an array of landmark changes, especially with regards to long-term capital gains tax. These changes include lowering of long-term capital gains tax rate to 12.5 percent (from 20 percent earlier) while indexation – that allows for adjusting the cost of asset with regards to inflation -- was phased out. Pathbreaking! Isn't it? The changes were certainly significant, but much needed at the same time, argued experts then. As tax filing season for FY 2024-25 is on, these changes gain a lot of significance, and several taxpayers would be struggling to comprehend the nuances of those changes. We have deconstructed most of those changes relating to long-term capital gains, which were introduced on the D-day of July 23. Notably, the provision of indexation, which was phased out on July 23, 2024, was restored for those asset owners who had purchased their asset(s) before July 23, 2024. They could simply opt for one of the two options: use indexation with a 20 percent tax rate, or skip indexation and pay the capital gain tax rate at 12.5 percent. And one is expected to choose the option (with or without indexation) that leads to lower tax liability – for obvious reasons. Gaurav Jain, Partner, Direct Tax, Forvis Mazars in India, simplifies the tax provision relating to long-term capital gain. 'For any capital asset sold on or after July 23, 2024, the new regime applies. The changes are significant and affect how tax is calculated on gains. Now, a uniform tax rate of 12.5% applies to long-term capital gains (LTCG) across most asset classes, regardless of indexation. In the case of land and buildings sold on or after July 23, 2024, tax will be charged at 12.5 per cent without indexation. If the aforesaid asset, being land or building, was acquired before July 23, 2024, the taxpayer has the option to choose between12.5% without indexation, or20% with indexation,' says Jain. Short-term gains on financial assets: These assets now attract a tax rate of 20 per cent instead of 15 per cent earlier. Other financial assets: On all other financial assets and non-financial assets, there will be an applicable tax rate based on the tax slab that applies. Long-term capital gains: All financial and non-financial assets attract a tax rate of 12.5 per cent instead of 20 percent earlier. Exemption limit: The limit of exemption of capital gains on certain listed financial assets is ₹ 1.25 lakh per year instead of ₹ 1 lakh earlier. For all personal finance updates, visit here
News18
18-07-2025
- Business
- News18
ITR Filing 2025: 8 Key Reporting Changes In ITR-3 Form That Taxpayers Must Know
Last Updated: However, the tax department has made some key changes in the reporting process in the ITR-3 form that taxpayers must know before filing it. ITR FY2025: Amid the ongoing income tax season for filing the income tax return of FY2024-25 (AY 2025-26), there has been some confusion on the reporting changes in the ITR-3 form. The tax department has released the Excel-based utilities for ITR-2 and ITR-3 recently, allowing eligible taxpayers to file their ITR. However, tax department has made some key changes in the reporting process in the ITR-3 form that taxpayers must know before filing it. ITR-3 form is applicable to Individuals and Hindu Undivided Family (HUFs) with income from profits and gains of business or professions, said Rahul Gupta, Partner, Direct Tax, SN Dhawan & CO LLP. For Assessment Year 2025-26, several important disclosure requirements such as capital gain segregation, deductions, and new threshold reporting limits for assets and liabilities have been incorporated, he added. 1. Declaration of Previous and Current Tax Regime Preference – Form ITR-3 now mandates taxpayers to indicate whether Form 10-IEA was filed for Assessment Year (AY) 2024–25 (i.e., the preceding financial year). Additionally, taxpayers are required to declare their intent to either continue with or opt out of the new tax regime for the current assessment year. 2. Additional Reporting Requirements for Claiming Deductions and Exemptions under the Income Tax Act – In an effort to increase transparency and streamline compliance, the Income Tax Department has revised its disclosure norms concerning deductions claimed under various sections of the Income Tax Act. For instance, in Section 24(b), which provides a deduction for interest paid on borrowed capital for house property. Taxpayers were only required to disclose the amount of interest paid on the housing loan while claiming the deduction under Section 24(b). Now, in addition to the interest amount, taxpayers must furnish detailed information regarding the housing loan. The updated disclosure requirements under Section 24(b) which includes Source of the Loan , Name of the Lender, Loan Account Number, Date of Loan Sanction, Total Loan Sanctioned, Outstanding Loan Amount, Interest Paid. 3. Revised Reporting for LTCG and STCG – Following the amendments to capital gains tax rates introduced by the Finance Act (No. 2), 2024, Schedule CG and other related sections of the return have been updated. Taxpayers are now required to report capital gains transactions separately based on whether they were executed before or on/after 23rd July 2024. Long Term Capital Gains Short Term Capital Gains 4. Segregated Reporting of Indexed Cost for Property Transfers – Resident individual taxpayers are now required to separately disclose the cost of acquisition and the cost of improvement for land or building transferred before 23rd July 2024. This bifurcation is intended to facilitate the accurate application of indexation benefits for such transfers. 5. Increased Income Threshold for Asset and Liability Disclosure – The threshold for mandatory reporting of assets and liabilities has been raised. Taxpayers with total income exceeding Rs. 1 crore (previously Rs. 50 lakh) are now required to furnish details of their assets and liabilities as of the end of the financial year, excluding items already disclosed under Part A – Balance Sheet. 6. Introduction of Presumptive Taxation Reporting under Section 44BBC – Form ITR-3 has been updated to incorporate provisions for reporting income under the newly introduced Section 44BBC. This section pertains to presumptive taxation for taxpayers engaged in the business of operating cruise ships. 7. Specific Reporting of Deemed Dividend under Section 2(22)(f) – Form ITR-3 now includes a dedicated field for reporting dividend income deemed under Section 2(22)(f), which pertains to amounts received as part of share buyback transactions that are treated as dividends for tax purposes. 8. Separate Disclosure for Capital Losses on Share Buybacks – Form ITR-3 now features a distinct row in Schedule CG for reporting capital losses arising from payments received by shareholders during share buybacks, as governed by Section 68 of the Companies Act, 2013. These losses are allowable, provided the corresponding deemed dividend income is reported under the 'Income from Other Sources' head, in line with Section 2(22)(f) of the Income-tax Act. About the Author Varun Yadav Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian More Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated! tags : income tax filing itr view comments Location : New Delhi, India, India First Published: July 18, 2025, 06:55 IST News business » tax ITR Filing 2025: 8 Key Reporting Changes In ITR-3 Form That Taxpayers Must Know Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
