Govt notifies ITR-3 for individuals/HUFs having income from biz, profession

The Income Tax department has notified ITR form 3 to be filed by individuals and HUFs having income from business or profession.

The tax department in a post on X late on Thursday night said ITR-3 for Assessment Year 2025-26 has been notified on April 30. ITR-3 is filed by individuals and HUFs having income from profits and gains of business or profession.

The threshold for reporting assets and liabilities under 'Schedule AL' has been raised from ₹50 lakh to ₹1 crore, thus reducing the disclosure burden on middle-income taxpayers.

In Schedule Capital Gains of the ITR, capital gains must now be split based on whether they arose before or after July 23, 2024.

In the Budget presented on July 24, 2024, the government proposed to lower long-term capital gains tax on real estate to 12.5% without indexation benefit, from 20% with indexation.

Indexation benefit allows taxpayers to arrive at the cost price of the property after adjusting for inflation.

With this, individuals or HUFs who purchased houses before July 23, 2024, can opt to pay Long Term Capital Gain (LTCG) tax under the new scheme at the rate of 12.5%without indexation or claim the indexation benefit and pay 20% tax.

Tax consultancy firm AKM Global, Partner-Tax, Sandeep Sehgal said the Central Board of Direct Taxes (CBDT) has made key updates to ITR Form 3 for AY 2025–26, easing compliance for individuals and HUFs with business or professional income.

"Dropdowns for deductions like Section 80C and section-wise TDS reporting have also been introduced, enhancing transparency, accuracy, and ease of filing. Overall, these changes reflect the CBDT’s ongoing efforts to promote ease of compliance, improve data accuracy, and align reporting with emerging policy developments," Sehgal added.

Earlier on April 29, the government had notified the income tax return (ITR) forms 1 and 4 for the assessment year 2025-26, and made it easier for individuals with long-term capital gains of up to ₹1.25 lakh from listed equities to file returns.

The government has also made certain changes in the forms with regard to deductions claimed under 80C, 80GG and other sections and has provided a drop-down menu in the utility for tax filers to select from.

Also, assessees will have to furnish in the ITR section-wise details with regard to TDS deductions.