The Income Tax Department has officially released the Excel-based utilities for ITR-2 and ITR-3 for the Assessment Year (AY) 2025–26, marking an important development for taxpayers with complex income streams such as capital gains, business income, foreign assets, and crypto earnings.
These utilities are now available on the Income Tax e-filing portal and cater specifically to individuals and HUFs (Hindu Undivided Families) who are not eligible to file ITR-1 and have income from sources like listed/unlisted shares, mutual funds, crypto assets, ESOPs, share buybacks, and more.
🔑 Key Updates Introduced for AY 2025-26
1. Detailed Capital Gains Reporting
The ITR-2 and ITR-3 forms now mandate granular disclosure of capital gains. Taxpayers are required to split and report:
- Type of capital gains: Short-term or long-term
- Asset category: Listed equity, unlisted shares, mutual funds, real estate, etc.
- ISIN and script-wise details for listed shares
- Acquisition and sale dates with cost of acquisition and sale consideration
Why this matters: The change aims to enhance transparency and traceability of capital market transactions and plug revenue leakages.
2. Loss from Share Buyback Allowed
In a much-awaited relief, losses incurred on buyback of shares are now specifically allowed to be reported. This means:
- If a taxpayer suffers a capital loss due to the difference between the FMV (Fair Market Value) and actual buyback price, it can be recorded.
- Earlier, the treatment of such losses was ambiguous; the new utility clarifies and eases compliance.
3. Asset and Liability Threshold Raised
The threshold for mandatory disclosure of assets and liabilities in Schedule AL (for taxpayers with income exceeding a specified limit) has been increased:
- Previously: Rs. 50 lakh
- Now: Rs. 1 crore
Who is affected: Primarily high net-worth individuals (HNIs) and resident individuals with significant assets in India or abroad.
4. Crypto and Virtual Digital Asset (VDA) Income Reporting
Taxpayers dealing in crypto assets or other Virtual Digital Assets (VDAs) will continue to report their income under a dedicated section in ITR-2/3. The utility supports:
- Separate reporting for each VDA
- Income under the head “Capital Gains” or “Other Sources” based on the nature of holding
Tax Note: Income from crypto is taxed at a flat 30% rate under Section 115BBH, with no deduction (except cost of acquisition) and no loss set-off allowed.
5. Other Enhancements
- Pre-filled data integration from AIS/TIS and 26AS is supported
- Improved validation and error checking mechanisms
- Real-time calculation of tax liabilities, including surcharge and interest under sections 234A/B/C
✅ Who Should Use ITR-2 and ITR-3?
| Return | Applicability |
|---|---|
| ITR-2 | Individuals/HUFs with income from salary, house property, capital gains, foreign assets, crypto, and no business income |
| ITR-3 | Individuals/HUFs with income from business/profession, including presumptive income, in addition to sources in ITR-2 |
📥 How to Download the Excel Utility
- Visit: https://www.incometax.gov.in/
iec/foportal - Navigate to Downloads > Income Tax Return Utilities
- Select AY 2025–26 and choose either ITR-2 or ITR-3
- Download the Excel utility and extract the zip file
- Enable macros and start filing!
💡 Final Thoughts
The release of Excel utilities for ITR-2 and ITR-3 is a signal to taxpayers with complex income profiles—especially those dealing in shares, property, crypto, and startups—to start early tax filing for AY 2025-26. The changes reflect the government’s push toward detailed disclosure, digital compliance, and greater accountability.
It’s advisable to gather all relevant documents, reconcile Form 26AS, AIS, and trading statements, and consult a tax expert if required.