As the deadline for filing Income Tax Returns approaches, the Income Tax Department has released ITR Form 3, which applies to individuals and HUFs earning income through business or professional activities.
A Hindu Undivided Family (HUF) creates a collective family entity to save on taxes by pooling family assets. This joint family setup treats the HUF as a separate entity from its members. Eligible members include Hindus, Buddhists, Jains, and Sikhs. The authorities made the announcement via the X platform on Thursday night, confirming that they officially notified ITR-3 for Assessment Year 2025-26 on April 30.
New In ITR-3?
One big change is that people now need to report their assets and debts under ‘Schedule AL’ only if the total is over ₹1 crore. Earlier, the limit was ₹50 lakh. This will make it easier for middle-income taxpayers as they have to share fewer details.
- The ITR’s Schedule Capital Gains section now requires you to mention separately if your gains happened before or after July 23, 2024.
- After the Budget on July 24, 2024, the government suggested lowering the long-term capital gains tax on property from 20% (with indexation) to 12.5% (without indexation).
- The indexation benefit enables taxpayers to calculate property costs whilst accounting for inflation.
Kind attention Taxpayers!
CBDT notifies ITR-Form 3 for AY 2025-26 vide Notification No. 41/2025 dated 30.04.2025.Key updates:
🖋️ Schedule-Capital Gain split for gains before/ after
23.07.2024 (post changes in Finance Act, 2024)
🖋️Capital loss on share buyback allowed if… pic.twitter.com/clBemPD7Dn---Advertisement---— Income Tax India (@IncomeTaxIndia) May 1, 2025
Individuals and HUFs Can Choose Between Two Options
As per the revision, individuals or HUFs who acquired properties before July 23, 2024 can choose between two options
- Either pay LTCG tax at 12.5 per cent without indexation
Continue with the existing system of 20 per cent tax with indexation benefits
On April 29, the government introduced ITR Forms 1 and 4 for the assessment year 2025–26, aiming to simplify the tax filing process for individuals. These forms especially benefit taxpayers who have earned up to ₹1.25 lakh in long-term capital gains from listed equities, making it easier for them to file their returns.
The updated forms also include changes to popular deduction sections such as 80c and 80gg. To further streamline the process, a drop-down menu has been added in the filing utility, allowing users to select the appropriate deduction categories more easily. Additionally, taxpayers are now required to provide detailed, section-wise information about their TDS (Tax Deducted at Source) deductions, ensuring greater clarity and transparency in the filing process.
