CBDT has notified ITR Form 3 for AY 2025-26. Major updates include crypto disclosures, changes for unlisted shares, and additional financial reporting. Know who should file and what’s new.
ITR Form 3 AY 2025-26: What’s Changed?
The Central Board of Direct Taxes (CBDT) has officially notified Income Tax Return Form 3 for Assessment Year (AY) 2025-26, applicable for FY 2024-25. This form is primarily meant for individuals and Hindu Undivided Families (HUFs) earning income under ‘Profits and Gains from Business or Profession’, not eligible for presumptive taxation under Section 44AD, 44ADA, or 44AE.
Notification Reference: CBDT Notification No. 16/2025 dated 24.04.2025
✅ Who Should File ITR Form 3?
This form is applicable for:
- Individuals or HUFs with income from proprietary business or profession
- Those having income under the head ‘Capital Gains’
- Income from multiple house properties
- Having foreign assets or signing authority
- Partners in a firm (not receiving presumptive income)
- Holding unlisted equity shares
📌 Key Changes in ITR Form 3 for AY 2025-26
| Change Area | What’s New |
|---|---|
| Virtual Digital Assets | Must declare income from crypto, NFTs, etc., separately |
| Unlisted Shares Disclosure | PAN of the company now mandatory; acquisition and sale details expanded |
| Foreign Assets | Detailed reporting, including dormant accounts and trusts |
| Capital Gains Reporting | Enhanced schedule for better LTCG/STCG bifurcation |
| Legal Entity Status | Mandatory selection if the taxpayer is a partner in a firm |
| Section 10(10D) | New row to report proceeds from non-exempt life insurance policies |
| Schedule VDA | Now compulsory for taxpayers with any crypto holdings, even if nil income |
| Aadhaar Authentication | Prompt to confirm e-verification via Aadhaar OTP |
🧾 Step-by-Step: Filing ITR Form 3
- Download ITR-3 from the official e-filing portal.
- Collect Documents: Bank statements, Form 26AS, AIS, TIS, investment proofs, books of accounts.
- Verify Business/Professional Income: Ensure accurate P&L, balance sheet entries.
- Declare Capital Gains: Use correct ISIN details and period of holding.
- Report VDAs Separately: In Schedule VDA – don’t mix with other capital assets.
- Submit and e-verify using Aadhaar OTP or DSC.
📚 Legal References
- Section 44AB: Audit applicability if turnover exceeds ₹1 crore (or ₹10 crore with digital receipts)
- Section 10(10D): Taxation of high-premium life insurance
- CBDT Notification No. 16/2025: Formal release of ITR Form 3
- Rule 12 of Income-tax Rules: Specifies ITR filing obligations
🔍 Expert View: Avoid These Common Mistakes
“Most errors arise from wrongly filling Schedule VDA or omitting unlisted share details. Cross-check your AIS and Form 26AS before submission.”
FAQs on ITR Form 3
Q1. Can salaried individuals use ITR Form 3?
Yes, if they also have business/professional income or capital gains.
Q2. Is crypto income taxable even if there’s a loss?
Yes, Schedule VDA must still be filled, even for nil or loss figures.
Q3. Is tax audit mandatory for all ITR-3 filers?
No. It’s based on turnover thresholds under Section 44AB.
Final Word: File Smart with Efiletax
With stricter disclosures and new schedules, filing ITR Form 3 needs accuracy and expert guidance. At Efiletax, our professionals ensure error-free ITR filing, VDA reporting, and capital gains optimisation.