ITR-3 Excel Utility Updates: Here's A Look At Major Changes That Taxpayers Must Know

ITR-3 Excel Utility Updates: The Income Tax department has introduced some significant changes to the ITR filing process for the Assessment Year (AY) 2025-26. The ITR-3 Excel utility, meant for taxpayers including stock traders, has also been updated. One of the key changes includes an increase in the Assets and Liabilities reporting threshold, which has been raised from Rs 50 lakh to Rs 1 crore. Another major update is that taxpayers now need to disclose more details to claim deductions under sections such as 80E and 80EE.

Here's a look at the changes in ITR-3 excel utility, which is important for stock traders or any other business professional.

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Who Is ITR-3 Excel Utility For

The ITR-3 is for individuals and Hindu Undivided Families (HUFs) who have income from a business or a profession. This includes:

-Income from proprietary businesses or professional activities (both tax audit and non-audit cases).

-Income as a partner in a partnership firm (excluding LLP partners with only profit share).

-Individuals engaged in trading, such as stock traders (including intraday), future dealers, and options (F&O) traders.

-Individuals or HUFs with income from other sources like salary/pension, house property, or capital gains, in addition to business or professional income.

-It is also used for people who need a tax audit.

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Seven Key Changes in ITR-3 Tax Form You Must Know:

Assets and Liabilities Reporting Threshold Increased: Previously, individuals with a total income exceeding Rs 50 Lakh had to report details of their assets and liabilities. This threshold has now been raised to Rs 1 Crore. This means fewer taxpayers will need to provide detailed asset and liability information.

Capital Gains Split by Date: If you have dealt in any properties or stocks and made a profit (capital gains), you now have to declare these gains separately based on whether the transaction occurred before or after July 23, 2024. This is due to changes in indexation and taxation rules under the Finance Act, 2024, which affect capital gains depending on the date of transfer.

Share Buybacks As Dividends: If a company has bought back its shares from you on or after October 1, 2024, the money you receive from that buyback will now be taxed as dividend income under "Income from Other Sources". However, you can use the original cost of those shares to claim a capital loss, but only if the corresponding buyback amount is reported as dividend income.

Detailed Tax Deducted at Source (TDS) Reporting: When tax has been deducted from your income as TDS, you now need to specify under which section of the Income Tax Act that amount has been deducted. This provides more granular detail for TDS reporting.

More Information for Deductions: You now need to provide more detailed information to claim various deductions that lower your taxable income. For instance, for home loan interest deductions (like under Section 24(b)), you may need to provide the lender's name, loan sanction dates, loan account numbers, etc. For deductions under sections like 80C, 80E, 80EE, 80EEA, and 10(13A) (HRA), detailed information like policy numbers, certificate numbers, or even your landlord's details for HRA claims are now required.

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Virtual Digital Assets (Cryptos) Reporting: If you own or deal in any cryptocurrencies or other virtual digital assets, the ITR-3 form now asks for even more comprehensive information about such transactions. There's a dedicated "Schedule VDAs" for this purpose. If you treat VDA income as capital gains, a quarterly breakdown is required in the Capital Gains section.

Old vs New Tax Regime Choice (Form 10-IEA): If you had opted for the new tax regime in the previous financial year (FY 2023-24 / AY 2024-25), the form will now ask if you had filed Form 10-IEA back then. It will also require you to declare whether you intend to continue with the new tax system or opt back into the old tax regime for the current assessment year.

For taxpayers with business income, Form 10-IEA must be filed on or before the due date for filing the ITR if they wish to opt out of the new tax regime. You can opt out or re-enter the new tax regime only twice in your lifetime if you have business income.