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Business Standard
16 hours ago
- Business
- Business Standard
ITR-3 filing starts: Who needs to file, what's changed & what to watch for
The Income Tax department has opened an online filing of Income Tax Return Form ITR-3 for Assessment Year (AY) 2025–26, according to its recent announcement on X. This is welcome news for individuals and Hindu Undivided Families (HUFs) earning income from business, profession, capital gains, or multiple sources. Who needs to file ITR-3? According to Naveen Wadhwa, vice president, Taxmann, ITR-3 is applicable to: -Individuals with income from business or profession (non-presumptive) -Freelancers or consultants providing services such as IT, legal, or marketing -Traders involved in regular buying/selling of shares, including F&O -Persons with income from multiple house properties -Taxpayers holding unlisted equity shares -Individuals with capital gains or foreign assets Importantly, salaried individuals who also earn from stock trading or freelancing must use ITR-3, not the simpler ITR-1 or ITR-2. ITR-3 is mandatory for those earning from Futures and Options (F&O) as it is treated as non-speculative business income, explains Shefali Mundra, chartered accountant and tax expert at ClearTax. Calculate Income Tax: Income Tax Calculator Tool 'F&O income falls under 'Profits and Gains of Business or Profession' and not capital gains, making ITR-3 the correct form,' she says. It also allows for accurate loss reporting and carry-forward provisions, she adds. Additional disclosures for ITR-3 -Capital gains split based on whether the asset was sold before or after 23 July 2024, as this impacts tax rate -Detailed TDS section codes must be reported to match AIS/Form 26AS -Loan details for claiming Section 24(b) housing interest deduction -Expanded crypto/VDA reporting, including acquisition and sale dates -Foreign income/assets and opt-out details for new tax regime (Section 115BAC) Simplifying a complex form ITR-3 is among the most complex forms due to its exhaustive disclosures, said Akhil Chandna, partner, Grant Thornton Bharat. However, he noted that the Income Tax portal has improved the filing experience this year with: -Pre-filled data for TDS, interest, salary, etc. -Real-time error checks to prevent mismatches -Simplified UI with tooltips and help prompts These enhancements aim to reduce filing errors and ease the burden, especially for first-time users. Common mistakes to avoid -Incorrectly classifying F&O income as capital gains -Choosing presumptive schemes (Sections 44AD/44ADA) without eligibility -Filing ITR-1 or ITR-2 despite business income -Assuming pre-filled data is accurate without cross-verification Capital gains: Watch out for misreporting and form mismatch Mundra also flags common errors in reporting capital gains. 'Misclassifying LTCG as STCG or vice versa, especially under the revised rules from July 23, 2024, can result in wrong tax computation,' she notes. Errors such as ISIN mismatches and incorrect grandfathering (for assets bought before Feb 1, 2018) are frequent and can lead to tax notices. She advises cross-checking returns with AIS and TIS to ensure accuracy. Word of caution While the system is smoother, over-reliance on pre-filled info or filing at the last minute during peak load could lead to issues. Users should manually verify all figures and file early to avoid portal lags. With online filing now active, those eligible for ITR-3 should gear up to file their returns accurately and in time for AY 2025–26.
Hindustan Times
6 days ago
- Business
- Hindustan Times
Planning to sell a property gifted by your parents? This is the amount of tax that you will have to pay
Ram Naik's father had gifted him a flat in Noida in December, 2023. This flat was purchased by his father in April, 2005 for a total consideration of ₹5 lakh. Naik intends to sell this flat in September 2025, for a total consideration of ₹50 lakh. In such a scenario, how will the capital gains tax be computed? Even though you got the property as a gift, without paying anything, the Income-tax Act doesn't treat the cost of the property as zero. (Photo for representational purposes only)(Pexels) How are taxes calculated on a gifted property? While a property received as a gift from parents is not taxed, if you decide to sell it later, you will be liable to pay capital gains tax on the profit you make from the sale. 'Even though you got the property without paying anything, the Income-tax Act doesn't treat the cost of the property as zero. Instead, you inherit the cost and holding period of the person who gave you the property (the donor),' says Rahul Singh, senior manager, Taxmann, tax and corporate advisor. When a gifted property is sold by the donee, the gains that arise on sale of such assets are subject to long term capital gains. The rate of tax levied will depend on the period of holding in the hands of the donee. In case the donee holds the asset for more than 24 months then his gains shall be taxable as long term capital gains at the rate of 12.5% and in case the period for which the asset has been held is less than 24 months then short term capital gains tax will be levied at the rate of 20%. In case the property has been acquired prior to July 23, 2024, then the donee/seller can also claim the benefit of indexation, however, in such a scenario, he shall be liable to pay tax at the rate of 20%. 'Where an asset is acquired by gift, the period of holding shall be reckoned from the date when the previous owner had acquired such asset. Thus, the period of holding in the hands of the donor shall also be included while computing the period of holding in the hands of the donee,' says Rashi Khanna, Associate Partner, DMD Advocates, a law firm. Moreover, in terms of Section 49 of the Income-tax Act, 1961, the cost of acquisition in the hands of the previous owner shall be deemed to be the cost of acquisition in the hands of donee. In terms of the prevailing law, Naik shall be liable to pay long term capital gains tax in respect of gains arising on sale of flat as the period of holding shall be reckoned from the date his father acquired the flat. 'Also, as the property was acquired prior to July 23, 2024, he is entitled to claim the benefit of indexation and pay taxes on the resultant gains at the rate of 20%. Furthermore, the cost at which the flat was acquired by Naik's father will be deemed to be the cost of acquisition in the hands of Naik,' says Khanna. Legal compliance crucial when gifting property As regards the taxation of gifts under Section 56(2)(x), it is imperative to highlight that gifts from individuals who do not fall within the narrowly defined ambit of 'relative', as prescribed under the Explanation to Section 56, may be liable to taxation in the hands of the recipient if the stamp duty value exceeds ₹50,000. The term 'relative' encompasses spouse, siblings, lineal ascendants and descendants, and certain other relations, but does not include cousins or friends. Also Read: Planning to sell your property? Here's why timing it after April 1 makes financial sense 'Therefore, due diligence must be exercised in evaluating the familial relationship to ensure tax neutrality of the gift. Exceptions are also carved out for gifts received on the occasion of marriage, by way of inheritance, or in contemplation of death,' says Tushar Kumar, Advocate, Supreme Court of India. Lastly, from a compliance and legal enforceability standpoint, it is indispensable that the gift of immovable property be executed through a registered gift deed under Section 17 of the Registration Act, 1908, and attract appropriate stamp duty as per the applicable State laws. The absence of registration renders the gift legally void and incapable of being acted upon in law. Everything you need to know about selling a property received as a gift(HT Graphic) 'Proper documentation not only secures clear title but also serves as primary evidence of ownership in the hands of the donee, thereby becoming critical at the time of future alienation and in securing the appropriate tax treatment under the Act,' says Kumar. Legal advice must be sought at the time of execution to ensure that the transaction withstands scrutiny both under property law and the tax statute. Anagh Pal is a personal finance expert who writes on real estate, tax, insurance, mutual funds and other topics
Mint
21-07-2025
- Business
- Mint
How spousal maintenance is taxed after divorce
NEW DELHI : While a failed marriage causes immense emotional distress, its financial and tax implications can't be understated. In India, a court decides how much maintenance one spouse will pay to the one earning less or having no income at all. The maintenance could be in different forms: one-time, periodic, or transfer of assets. Different types will have different tax treatment. However, it must be noted that the Income Tax Act,1961, does not contain specific provisions on the same. Relevant case laws, along with analogous provisions, are used to determine its taxability. Tax on maintenance The lump sum maintenance a spouse receives is not taxable. It is tax-exempt because it is considered a capital receipt, which does not fall within the ambit of the Income Tax Act. Sometimes, a spouse might prefer regular maintenance, that is, a monthly payment. Regular maintenance is taxable as 'income from other sources" as it is considered a revenue receipt, said chartered accountant Naveen Wadhwa, vice-president, research and advisory division at Taxmann, an online source for taxation research. However, chartered accountant Ashish Karundia has a different view. "The periodic payments are the very condition of divorce, based on which the court issues the divorce decree. The spouses remain married at the time when the periodic payments are agreed, so no question of taxation on this amount for them being relatives. Since divorce was agreed upon on this very condition, the amount remains tax-free even after the divorce decree is issued," he said. Any fresh arrangement, not part of the initial divorce decree, will be taxable. For example, spouses may demand enhanced compensation adjusted against inflation. 'The enhanced amount becomes taxable in the hands of the receiving spouse because it happens after the divorce decree was issued," Karundia added. Tax on transfer of assets Suppose a spouse transfers property to the other spouse as part of maintenance. Under Section 47 of the Income Tax Act, a transfer to a former spouse as part of a divorce settlement is not regarded as a 'transfer" for capital gains purposes. However, if the former spouse generates income from it via receiving rent or sale, it will be taxed in his or her hands. "If a property is gifted between spouses, no capital gains tax arises to the donor. The recipient spouse will not be taxed either on the value of the gifted property because a spouse falls within the definition of relative. However, the clubbing provisions will apply to any income generated further on the same," Wadhwa said. 'It ceases to apply if the transfer is made in connection with an agreement to live apart, in which case the income from the property would be taxable in the hands of the recipient ex-spouse," he added. If property is transferred after the divorce has taken place (excluding a transfer that had been agreed upon as a precondition), it will be taxed in the hands of the receiving spouse. Separation Any kind of maintenance will not be taxable if a couple lives separately without divorce because, in the eyes of the law, the spouses are still married and would qualify as relatives, Karundia said. Can a paying spouse claim a tax deduction? It is not possible. Maintenance is considered a personal expense and not tax-deductible for the payer. However, some courts might consider your post-tax salary instead of gross salary when deciding the amount of alimony. It is important to note that deductions such as employee provident fund, insurance premiums will not be excluded from your salary when the court determines your income. 'Different courts look at it differently. It is up to the spouse and the lawyer to present their case wisely. For example, a person earning ₹1 lakh a month may have to pay ₹20,000 in taxes. If a court asks him to pay 50% of his gross salary, ₹50,000 per month will go to the spouse, ₹20,000 in taxes, and he will be left with only ₹30,000. That said, the court may only consider his post-tax salary, that is, ₹80,000," Karundia said. In cases where the court has specifically ordered that a certain property will go to the spouse, the income out of such property will be taxable in his or her hands directly. The paying spouse will not have to add such income to his or her taxable income. For example, a spouse owns a two-floor house. 'If the court orders that rental income from one of the floors will belong to the other spouse, it will be taxable in the latter's hands. This arrangement is called an overriding charge, that is, redirecting income to the other party before it becomes taxable for the original recipient," Karundia added.
Yahoo
21-07-2025
- Business
- Yahoo
EY India and Taxmann unveil AI-powered tax research platform
EY India and Taxmann have collaborated to launch an AI-powered platform tailored for tax and legal professionals. The platform offers research, document analysis, and response generation capabilities, built on EY's technology platform for the tax domain. The responses generated by are based on original, verifiable content from India's largest tax and legal library, owned and maintained by Taxmann. EY said that its expertise in tax consulting and technology ensures the platform is robust, reliable, and user-friendly. In addition, it developed the platform considering India's tax landscape. In its initial phase, features an 'Ask Bot' that processes natural language queries and delivers structured responses with links to relevant sections, rules, circulars, case law, and expert commentaries. The platform is capable of researching complex topics, extracting insights from intricate legal documents, and identifying similar legal precedents using sophisticated pattern recognition. It also integrates with Microsoft Word, offering a comprehensive tool for tax professionals. is set to expand with a 'Draft Bot' that will validate legal notices from tax authorities, identify potential issues, and generate comprehensive draft responses supported by statutory provisions and relevant case law. The platform's privacy-first architecture ensures complete confidentiality of user data and generated content through enterprise-grade encryption protocols, EY added. Taxmann managing director Rakesh Bhargava said: 'This launch represents our commitment to empowering tax and legal professionals with tools that enhance both efficiency and accuracy. 'By combining our decades of tax and legal content expertise with the proven AI technology of EY, we are delivering a solution that truly understands the requirements of Indian Tax and legal professions.' EY India national tax leader Sameer Gupta said: 'India's tax ecosystem has undergone a remarkable digital transformation, setting global benchmarks in technology-led governance, and EY is a trusted leader in tax technology in India. 'With AI driving the next wave of tax transformation, our collaboration with Taxmann reflects a shared vision to empower tax and legal professionals with AI for greater speed, efficiency and smarter decision-making based on authentic data.' In February 2025, EY Global Delivery Services, a division of EY, expanded its presence in Tamil Nadu by opening its first office in Coimbatore. The new office at the KCT Tech Park, covering 22,000 ft², will serve as a hub for AI, data analytics, cloud services, cybersecurity, digital and quality engineering, ERP systems, and financial services platforms. "EY India and Taxmann unveil AI-powered tax research platform " was originally created and published by International Accounting Bulletin, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
News18
18-07-2025
- Business
- News18
Taxmann, EY India launch AI-powered platform for tax, legal professionals
Agency: PTI Last Updated: New Delhi, Jul 18 (PTI) Taxmann and EY India on Friday announced their collaboration to launch an advanced AI-powered platform designed for tax and legal professionals. offers research, document analysis, and response generation capabilities built on EY's technology platform for the tax domain. The responses generated by are grounded in original, verifiable content from Taxmann, backed by enterprise-grade privacy and security of EY tax technology, EY India said in a statement. EY India National Tax Leader Sameer Gupta said 'with AI driving the next wave of tax transformation, our collaboration with Taxmann reflects a shared vision to empower tax and legal professionals with AI for greater speed, efficiency and smarter decision-making based on authentic data". EY India's tax technology practice supports over 3,300 corporates, processing transactions worth more than USD 600 billion annually. Taxmann Managing Director Rakesh Bhargava said this launch represents our commitment to empowering tax and legal professionals with tools that enhance both efficiency and accuracy. PTI JD TRB 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.
