ITR-2 and ITR-3 Offline Forms Released: How to Use Them, Major Changes, and Documents Required
With key upgrades for AY 2025–26, here’s what individuals and HUFs with complex incomes need to know about the new Excel utilities.
What’s New With ITR-2 and ITR-3?
The Income Tax Department has launched the Excel-based offline utilities for ITR-2 and ITR-3 for Assessment Year (AY) 2025–26.
- These forms are specifically designed for individuals and Hindu Undivided Families (HUFs) with income sources like capital gains, multiple properties, foreign assets, or business/professional earnings.
- Key update: The threshold for mandatory reporting of assets and liabilities has been raised from ₹50 lakh to ₹1 crore, reducing the compliance burden for many taxpayers.
- These forms now align with the latest amendments in the Finance (No. 2) Act, 2024 and international disclosure standards.
Major Changes to Watch For
- Capital Gains Segregation:
Taxpayers must specify if asset transfers (triggering capital gains) happened before or after July 23, 2024, as this impacts the applicable tax rate—especially for real estate. - Buyback Reporting:
Capital losses from share buybacks after October 1, 2024, can be claimed, provided associated dividend income is also reported. - TDS Reporting:
There’s a new field to declare the specific section under which TDS was deducted. - Granular Disclosures:
More details are now required for deductions (Sections 80C, 80D, etc.), foreign assets, and virtual digital assets. - Salary/Pension Breakdown:
The form now requires a comprehensive breakup of salary components, helping tax authorities better verify exemption claims.
Who Should Use ITR-2 or ITR-3?
- ITR-2:
For individuals/HUFs with salary, multiple house properties, capital gains, or foreign assets, but no business or professional income. - ITR-3:
For individuals/HUFs earning income from business or profession, including presumptive schemes under Sections 44AD, 44ADA, or 44AE.
How Does the Excel Utility Work?
- The Excel utility lets taxpayers fill out their ITR offline, without an internet connection.
- Once completed, it generates a JSON file to be uploaded on the e-filing portal.
Steps to Use the Excel Utility:
- Download the ITR-2 or ITR-3 Excel utility from incometax.gov.in.
- Enable macros in Excel (required for the tool’s built-in validations).
- Enter all required details: income, deductions, TDS/TCS, and tax payments.
- Validate entries with the built-in checker.
- Generate the .JSON file once the form is complete.
- Log in to the e-filing portal and upload the .JSON file for final submission.
Essential Documents to Gather Before Filing
- Form 16 (for salaried individuals)
- Capital gains statements (from brokers or mutual funds)
- Bank account details and interest certificates
- Property documents (if there’s income from house property or capital gains)
- Foreign asset/income details
- Receipts for deductions (Sections 80C, 80D, donations, etc.)
- TDS/TCS certificates
- Details of virtual digital assets (if applicable)
Pro Tips for Smooth Self-Filing
- Check the asset transfer date: Pay close attention to transactions before and after July 23, 2024, as this affects tax treatment.
- Leverage the ₹1 crore threshold: You only need to report assets and liabilities if the value exceeds ₹1 crore.
- Double-check for new fields: Make sure to fill out any additional disclosures required this year.
- Always validate before generating the JSON file to avoid upload errors.
Filing Deadlines for AY 2025–26
- Non-audit cases:
September 15, 2025 (extended from July 31). Belated returns possible until December 31, 2025, with penalties and interest. - Audit cases:
October 31, 2025.
