Key Points

An individual or Hindu Undivided Family with a business or profession must use ITR-3. Company directors, those who invested in unlisted equity shares at any time during the financial year, along with income from other sources, partner income, salary or pension income, and house property income, can use this ITR form.

Taxpayers with income earned from capital gains or foreign assets, income classified as profits or gains from business or profession and those who are not eligible to file Form ITR-1 (Sahaj), ITR-2, or ITR-4 (Sugam) can use ITR-3.

Form ITR-3 now requires assessees to confirm whether Form 10-IEA was filed in AY 2024–25 (i.e., the preceding financial year), along with a declaration on whether they intend to continue with or opt out of the new tax regime for the current assessment year.

Due to the changes in capital gains tax rates, Schedule CG and other related Sections have been revised. Now, taxpayers have to report capital gains transactions separately for those done before and on or after July 23, 2024.

In the recent budget, long-term capital gains (LTCG) tax on all financial and non-financial assets has been revised to 12.5 per cent (up from 10 per cent for equities). Short-term capital gains (STCG) tax on some assets, like equities, is now 20 per cent (up from 15 per cent). All listed financial assets held for more than a year would be classified now as long-term assets.

To apply indexation benefits, resident taxpayers should separately provide details of the cost of acquisition and improvement for any land or building transferred before July 23, 2024.

Taxpayers with a total income of over Rs 1 crore (up from Rs 50 lakh) now need to disclose their assets and liabilities at the end of the financial year, except for those already covered under Part A – Balance Sheet.

The new form has a separate row in Schedule CG for reporting capital losses that come from companies buying back shares from shareholders, as per Section 68 of the Companies Act, 2013.

- IANS