The Income Tax Department has enabled online filing for Form ITR-3, allowing individuals and Hindu Undivided Families (HUFs) with relatively complex financial profiles to submit their tax returns digitally.
The update, announced on July 30, applies to taxpayers with business income, income from share trading, including futures and options, and those with investments in unlisted equity shares such as National Stock Exchange (NSE) holdings.
ITR-3 is specifically meant for taxpayers who are not eligible to file ITR-1 (Sahaj), ITR-2, or ITR-4 (Sugam). This includes salaried individuals who also run a business, partners in firms, or anyone with income from capital gains, house property, or foreign sources. Those who held unlisted equity shares at any time during the financial year or who serve as directors in companies are also covered.
The form allows for disclosure of income exceeding ₹50 lakh, offering space to report multiple income streams, including pension, rent, or earnings from overseas.
The 2024-25 version of ITR-3 comes with a set of new disclosures aligned with changes introduced in the Finance Act. One of the key updates is the revised reporting format for capital gains. Taxpayers are now required to split gains based on whether the transaction occurred before or after July 23, 2024. This follows policy changes affecting the tax treatment of certain assets and transactions.
Another notable change involves buybacks. From October 1, 2024 onwards, if an assessee shows corresponding dividend income under ‘income from other sources’, capital losses from share buybacks can be claimed. This provision may benefit retail investors who’ve recently seen increased activity in buyback markets.
The threshold for reporting assets and liabilities has been revised upwards. Taxpayers with total income exceeding ₹1 crore are now required to provide detailed disclosure under this section. The form also introduces reference to section 44BBC, which relates to income from cruise shipping business—an indicator that niche categories are being brought into regular compliance.
Reporting under commonly claimed deductions like 80C (investments in PPF, LIC etc.) and 10(13A) (house rent allowance) has also been made more detailed. Additionally, taxpayers must now specify the correct TDS section codes in the Schedule-TDS, making it harder to file vague or incomplete returns.