Amendments Introduced in ITR Form-3 for AY 2025–26 as Compared to Previous AY 2024-25:

Amendments Introduced in ITR Form-3 for AY 2025–26 as Compared to Previous AY 2024-25 The Income Tax Return (ITR) Form-3 for Assessment Year (AY) 2025–26 has introduced a number of significant amendments compared to the previous assessment year 2024-25, reflecting the updates in the Finance Act 2024 and enhancing compliance, traceability, and transparency. 1. Option to Opt-Out of the New Regime (Section 115BAC(6))

• The new ITR Form-3 gives explicit details for opting out of the new tax regime. It now includes the Form 10-IEA requirement, acknowledgement number, dropdown logic, and continuity checks for multiple assessment years.
• The previous version of the form only provided a basic Yes/No option without a detailed validation structure.

This change ensures stricter compliance and aligns with backend validation systems at the CPC. 2. Seventh Proviso to Section 139(1)

• Disclosures have been expanded in the new ITR Form-3, for foreign travel expenses of more than Rs. 2 lakh, electricity bills exceeding Rs. 1 lakh, and current account deposits above Rs. 1 crore. A new dropdown for clause (iv) has also been added.
• Earlier, the ITR-3 form was less structured and also had no dropdown logic.

This change was targeted toward identifying high-value lifestyle indicators in non-filers. 3. Schedule AL (Assets and Liabilities)

• The threshold for reporting asset and liability information has been increased. Only persons with an overall income of more than Rs. 1 crore are now required to provide these details.
• Earlier, this limit was Rs. 50 lakh in the assessment year 2024-25.

The amendment has decreased the compliance burden on individuals with moderate income upto Rs. 1 lakh. They are now not required to report year-end assets and liabilities. 4. Schedule SPI (Clubbing of Income)

• A new optional field for PAN/Aadhaar has been introduced in the ITR-3 form for AY 2025–26 for some selective individuals, such as spouse and minor children.
• Previously, PAN fields were not structured/optional in the ITR-3 form.

The updated version of the form helps improve traceability of clubbed income under Section 64. 5. Schedule SI (Special Rate Income)

• This section now includes segmentation for long-term and short-term capital gains (LTCG/STCG) made before and after July 23, 2024. Post this date, listed securities are taxed at 20% (general) or 12.5% (special cases), aligning with the Finance Act’s revised capital gain tax structure.
• Earlier, long-term and short-term capital gain (LTCG/STCG) rates were uniform.

The introduced change reflects towards Financial Act amendments in the capital gain tax rate structure. 6. Schedule CG (Capital Gains)

• A new long-term capital gain (LTCG) slab has been introduced with 12.5% for gains on listed securities after July 23, 2024, under Section 112(1).
• Previously, the uniform rate was 20% long-term capital gain (LTCG) for the mentioned securities.

This change is likely to impact investment decisions and may incentivise longer holding periods for securities. 7. Schedule AMT/AMTC

• Modifications have been made to include adjustments for new income heads, carry-forward AMT details, and segregation of IFSC units.
• Earlier forms provided only a generic AMT computation.

These amendments help in better burification under Section 115JC, along with this also helps in more precise AMT set off validations. 8. Tax Deferred on ESOPs (Section 17(2)(vi))

• Detailed reporting for ESOPs is now being asked in ITR Form-3, including deferment, payment timelines, employer name, sale of shares, and tax amounts by assessment year.
• This was not available in earlier versions of ITR Form-3.

This amendment is especially relevant for startups, in alignment with Section 80-IAC. 9. Schedule EI (Exempt Income)

• Now, ITR Form-3 needs an extra requirement of location-wise disclosure of agricultural land and state-wise income if agricultural income exceeds Rs. 5 lakh.
• This was not required in the previous ITR Form-3.

This introduced amendment ensures better scrutiny of large agricultural income claims. 10. Schedule GST

• Outward supply value must now be reported mandatorily as per GST returns per GSTIN.
• Previously, this was optional or limited.

The implemented change supports cross-validation with GSTN databases, enhancing data integrity. 11. Verification Section

• The section now includes an explicit reference to Section 92CD, covering modified returns under Advance Pricing Agreements (APA), and has added a “capacity” field for the declarant.
• Earlier, in ITR Form-3, only a general declaration was needed.

This brings clarity to special return categories compared to the earlier generic declaration format.