Offline forms for ITR-2, ITR-3 released: How to use them, documents needed

The offline Excel utilities for ITR-2 and ITR-3 are now live; know the major changes, who can use them, and tips for smooth filing this year.

The Income Tax Department has rolled out Excel-based offline forms ITR-2 and ITR-3 for assessment year (AY) 2025–26 for individuals and Hindu Undivided Families (HUFs) with complex income sources such as capital gains, foreign income, or business and professional earnings.

 

Forms, which are called utilities by the department, for ITR-1 and ITR-4 were released earlier and the latest set was delayed. “The delay stems from major structural changes to the ITR forms for AY 2025–26. These changes required backend system upgrades, utility reprogramming, and extensive validation,” said Ritika Nayyar, partner at Singhania & Co.

 

Niyati Shah, a chartered accountant and personal tax head at ‘1 Finance’, said “synchronisation issues” with the Annual Information Statement and Taxpayer Information Summary, as well as efforts to align disclosures with international reporting standards and government circulars delayed the forms. 

 

What’s new in ITR-2 and ITR-3?

 

Changes in ITR-2 and ITR-3 reflect amendments in the Finance (No. 2) Act, 2024, said Naveen Wadhwa, vice-president at Taxmann. “The threshold for mandatory reporting of assets and liabilities has been increased from Rs 50 lakh to Rs 1 crore, reducing the compliance burden for many taxpayers,” he said.

 

Capital gains segregation: The new forms require taxpayers to disclose whether an asset transfer triggering capital gains occurred before or after July 23, 2024, as this impacts the applicable tax rates, particularly for property sales.

 

Buyback reporting: Taxpayers can claim capital losses on share buybacks after October 1, 2024, provided related dividend income is reported.

 

Tax deducted at source: A new field requires reporting the specific section under which TDS has been deducted.

 

Expanded disclosures: There are now more granular requirements for deductions (like 80C and 80D), foreign assets, and virtual digital assets.

 

“These changes simplify filing for some taxpayers but also require more detailed information in certain areas,” Wadhwa added. 

 

Who should file ITR-2 and ITR-3?

 

Experts explain

 

ITR-2 is for individuals and HUFs with income from salary, multiple house properties, capital gains, or foreign assets, but not having income from business or profession.

 

ITR-3 is for individuals and HUFs with income from a business or profession, including earnings through presumptive taxation schemes under Section 44AD, 44ADA, and 44AE.

 

Salaried individuals and pensioners should note the expanded requirements. “The new form asks for a comprehensive breakup of salary components, enabling tax authorities to verify exemption claims more effectively,” Wadhwa said.

 

What is Excel utility?

 

The Excel utility is an offline tool that allows taxpayers to fill in return details without an internet connection. Once complete, it generates a JSON file for upload on the tax department’s e-filing portal.

 

How to use the Excel utility

 

-Download ITR-2 or ITR-3 Excel utility from incometax.gov.in.

 

-Enable macros in Excel.

 

-Enter income, deduction, and tax payment details.

 

-Validate the entries using the built-in feature.

 

-Generate JSON file.

 

-Log in to the e-filing portal and upload the .JSON file.

 

Tips for self-filing taxpayers

 

“Taxpayers filing without professional assistance should gather all documents, Form 16, capital gains statements, and receipts for deductions, before starting,” Wadhwa said. “Pay attention to distinguishing transactions before and after July 23, 2024, as tax treatments differ. Also, use the raised Rs 1 crore threshold for asset reporting to avoid unnecessary work if eligible.”

 

Deadlines

 

-Last date to file ITR: September 15, 2025 (extended from July 31) for non-audit cases; however, a belated return can be filed by December 31 with penalties and interest.

 

-For businesses that require an audit, the last date of filing is October 31st, 2025.

 

Taxpayers are advised to review the changes carefully to avoid errors and notices.