Income Tax Return Filing for FY 2024-25 has undergone notable changes with the notification of the revised ITR-3 form by the Income Tax Department. The Central Board of Direct Taxes (CBDT) announced this update via its official handle on the X platform on April 30, 2025. The updated ITR-3 is applicable for Assessment Year (AY) 2025-26 and is intended for individuals and Hindu Undivided Families (HUFs) who earn income from business or professional sources.
Here’s a breakdown of what’s new in ITR-3 and how it impacts taxpayers.
One of the most taxpayer-friendly updates is the increase in the threshold for mandatory disclosure of assets and liabilities under Schedule AL.
Previous Threshold: Rs 50 lakh
New Threshold: Rs 1 crore
This change is expected to provide relief to middle-income taxpayers, who will now face fewer compliance requirements if their total assets fall below the revised limit.
The Schedule Capital Gains section has been revamped to capture capital gains transactions based on their timing—specifically, whether they occurred before or after July 23, 2024.
This new bifurcation follows the Union Budget 2024 announcement on July 24, which proposed a major change in the tax treatment of long-term capital gains (LTCG) from the sale of immovable property.
As per the budget proposals:
New LTCG Rate: 12.5% without indexation (for property sold after July 23, 2024)
Existing Option: 20% with indexation benefit (remains available)
Taxpayers now have the flexibility to choose between the new flat rate of 12.5% without indexation or stick with the current method involving 20% with indexation. This flexibility is especially useful for those who acquired property before July 23, 2024.
The updated form introduces dropdown menus for claiming deductions under various sections (like Section 80C) and more structured section-wise reporting of TDS (Tax Deducted at Source).
This update is designed to enhance:
Transparency in disclosures
Accuracy in reporting
User-friendliness of the filing process
Prior to this, on April 29, the CBDT had also notified ITR-1 and ITR-4 for AY 2025-26. These simplified forms now allow individuals with long-term capital gains up to Rs 1.25 lakh from listed equity shares to use ITR-1 or ITR-4, making compliance easier for small investors.
The new ITR-3 form is part of the government’s broader strategy to modernize and streamline tax compliance for professionals and business owners. With enhanced flexibility, reduced disclosure burdens, and improved reporting tools, the Income Tax Department is clearly moving toward a more transparent and taxpayer-friendly regime.
Taxpayers and professionals are advised to review the new form carefully and consult a tax expert if needed, especially if they are dealing with capital gains or asset disclosures.
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