The updated return filing window for ITR-3 and ITR-4 for two Assessment Years (AYs) is now open, bringing significant changes and updates for taxpayers. These revisions aim to enhance transparency, improve reporting, and streamline the income tax system.

Key Updates and Extensions

The Central Board of Direct Taxes (CBDT) has extended the deadline for filing Income Tax Returns (ITRs) for the Assessment Year 2025-26 to September 15, 2025, from the original due date of July 31, 2025. This extension was granted to allow taxpayers and tax professionals sufficient time to adapt to the comprehensive revisions made to the notified ITR forms and to ensure the smooth rollout of ITR filing utilities.

The Income Tax Department officially released the Excel utilities for ITR-1 and ITR-4 on May 30, 2025, and for ITR-2 and ITR-3 on July 11, 2025. These utilities enable taxpayers to file returns for the income earned in the Financial Year 2024-25.

ITR-3: Who Should File?

The ITR-3 form is designed for individuals and Hindu Undivided Families (HUFs) with income from a business or profession. This includes those who are required to maintain books of accounts. Individuals earning from salaried employment and additional sources like freelancing or part-time business activities can also use ITR-3, provided they have business income. ITR-3 is applicable for individuals and HUFs who have income from profits and gains from business or profession and can report all possible incomes.

Key Changes in ITR-3 for AY 2025-26

• Capital Gains Reporting: Taxpayers must report capital gains transactions separately for those done before and after July 23, 2024, to align with changes in capital gains tax rates brought about by the Finance Act (No. 2), 2024.
• Share Buybacks: Capital losses on share buybacks will be allowed if the corresponding dividend income is reported under "Income from Other Sources." This change applies from October 1, 2024.
• Asset and Liability Reporting: The threshold limit for reporting mandatory assets and liabilities has increased to ₹1 crore, reducing the compliance burden on taxpayers.
• TDS Reporting: ITR-3 provides for reporting of Tax Deducted at Source (TDS) under the specific section in which the tax has been deducted.
• Disclosure of Regime Selection: Form ITR-3 requires assessees to confirm whether Form 10-IEA was filed in AY 2024–25 and declare whether they intend to continue with or opt out of the new tax regime.

ITR-4: Who Should File?

ITR-4, also known as Sugam, is for resident individuals, HUFs, and firms (excluding LLPs) who have opted for the presumptive income scheme under Section 44AD, 44ADA, or 44AE of the Income Tax Act. This form is applicable for those with income up to ₹50 lakh and presumptive income under the specified sections.

Key Changes in ITR-4 for AY 2025-26

• Eligibility Expanded: Taxpayers declaring Long-Term Capital Gains (LTCG) from listed equities or mutual funds up to ₹1.25 lakh under Section 112A can now file ITR Form 4, provided that no capital losses are carried forward.
• New Tax Regime Default: The form now defaults to the new tax regime. Taxpayers wanting to opt-out must explicitly choose the old tax regime.
• Mandatory TDS Selection Level Reporting: The form requires mandatory TDS selection level reporting.
• Aadhar-PAN Integration: Aadhar-PAN integration is mandatory.
• Detailed Deduction Disclosures: The form requires detailed deduction disclosures.

Filing Process

Taxpayers can file ITR-3 and ITR-4 forms online through the Income Tax Department's e-filing portal. The process involves downloading the relevant Excel utility form, filling in personal and income-related details offline, validating the entries, generating the XML or JSON file, and uploading the file on the portal to complete the filing process. It is crucial to verify the return within 30 days of submitting the Excel utility form.

Consequences of Missing the Deadline

Missing the extended deadline of September 15, 2025, can lead to interest charges under Section 234A and a late filing fee under Section 234F. Interest is charged at 1% per month on the unpaid tax amount, and late fees can range from ₹1,000 to ₹5,000, depending on the total income. However, a belated return can be filed until December 31 of the assessment year, albeit with penalties.

GCCI Requests ITR Deadline Extension

The Gujarat Chamber of Commerce & Industry (GCCI) has requested an extension to the income tax return (ITR) filing deadline, citing delays in the release of ITR utilities and persistent technical issues on the Income Tax portal. GCCI also highlights discrepancies in financial statements and seeks an extension for the income tax audit deadline, currently set for September 30, 2025.