This form is filed by individuals and HUFs (Hindu Undivided Families) earning profits and gains from business or profession. These taxpayers include proprietors, freelancers; professionals such as doctors, lawyers, consultants; partners in firms (except those who earn only salary or interest from the firm).

Apart from this, taxpayers who have business or professional income along with income from house property, capital gains or other sources can also use the ITR-3 form.

What changes have occurred

– The threshold for reporting assets and liabilities under ‘Schedule AL’ in the new ITR-3 form has been increased from Rs 50 lakh to Rs 1 crore. This has reduced the disclosure burden on middle-income taxpayers.

– In Schedule Capital Gains of ITR, capital gains must now be split based on whether they are generated before or after July 23, 2024. In the budget presented on July 24, 2024, the government had proposed to reduce the long-term capital gains tax on real estate to 12.5 per cent without indexation benefit. With indexation benefit, this tax is 20 per cent. The indexation benefit allows taxpayers to arrive at the cost price of the property after adjusting for inflation.

In such a situation, now individuals or HUFs who buy homes before July 23, 2024, can choose to pay Long Term Capital Gains (LTCG) tax under the new scheme at the rate of 12.5 per cent without indexation benefit, or pay 20 per cent tax by claiming indexation benefit.

– Share buyback loss rules: From October 1, 2024, capital losses on listed share buybacks will be allowed only if the relevant dividend income is shown under “income from other sources”.

– Detailed deduction reporting: The ITR-3 form now asks for more details under sections such as 80C (investments) and 10(13A) (house rent allowance).

– TDS Section Code: Taxpayers are now required to mention TDS Section Code (eg. 194A, 194H) in Schedule-TDS for better tax credit tracking.

According to a report by news agency PTI, Sandeep Sehgal, Partner-Tax at tax consultancy firm AKM Global, says that the Central Board of Direct Taxes (CBDT) has made important updates in the ITR-3 form for the financial year 2025-26. This has made compliance easier for individuals and HUFs with income from business or profession. According to Sehgal, dropdowns have also been introduced for deductions like section 80C and section-wise TDS reporting, which has increased transparency, accuracy and ease of filing. Earlier on April 29, the government notified the ITR-1 form and ITR-4 form for the assessment year 2025-26.

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The post ITR New Form: New ITR-3 form notified for Income Tax Return filing for FY 2024-25, who has to file it first appeared on Rightsofemployees.com.

More than 3 crore Income Tax Returns have been filed till July 25, 2022 for the financial year 2021-22 and assessment year 2022-23. The last date for filing Income Tax Return is 31st July 2022. In such a situation, the Income Tax Department has advised the taxpayers to file the return as soon as possible.

Recently, the Finance Ministry had clarified that the last date for filing ITR will not be extended this year. If you have not yet filed your ITR Return, it is important that you do so before Sunday, that is, 31st July. If you miss the deadline for filing ITR, you may have to suffer a loss.

A salaried individual can file his tax return using ITR-1 or ITR-2. It is important to ensure that the tax return is filed using the correct form. Filing ITR using wrong tax return form will result in faulty ITR filing. After which the Income Tax Department can send you a notice for income tax. In which you will be asked to file ITR using the correct form. The form you need to use to file ITR will depend on your sources of income during the financial year.

Who can file ITR-1?

• Total income should not exceed Rs 50 lakh
• The source of income should be salary, a house property and other sources of income, i.e. interest income, dividend etc. and agricultural income only up to Rs.5,000.
• Person should ordinarily be resident Indian
• If a salaried person fulfills the above conditions, then he/she can file tax return using ITR-1 form.
• If a salaried person has income from any other source such as capital gains, foreign income etc. or is a non-resident individual, he cannot file tax return using ITR-1.

Who can file ITR-2?

A salaried person can file his tax return using ITR-2 form if he-

• is a director of a company
• Investing in unlisted equity shares
• Income from salary, more than one house property, capital asset, foreign income and other sources of income
• holds assets outside India
• Total income is more than Rs 50 lakhs
• Hindu Undivided Family (HUF)
• is a non-resident person or a resident person (both in the ordinary or not in the ordinary course)
• If there are losses which should be carried forward or carried forward under the head ‘Income from house property’.
• Thus, if a salaried person has income from salary and capital gains, he/she has to file income tax return using ITR-2 form.

The post ITR New Form: Taxpayer should file ITR by choosing between ITR-1 or ITR-2?, know details first appeared on Rightsofemployees.com.