New ITR Rules for Crypto Earners: Excel Utility Released for AY 2025-26, Know How to File Using ITR-2 and ITR-3
Crypto Investors Alert: Income Tax Department Releases ITR-2 and ITR-3 Excel Utility for AY 2025-26 — Here’s How to File
In a major update for taxpayers with income from crypto assets, capital gains, and other sources, the Income Tax Department has released the Excel utility for ITR-2 and ITR-3 for the Assessment Year 2025-26. With this rollout, individuals dealing in virtual digital assets (VDAs), property transactions, stock market investments, and those earning professional income can now start preparing their tax returns offline.
While e-filing directly through the portal is not yet active, users can download the Excel utility from the official income tax e-filing website, fill in the required details, and upload the form once the portal opens for online submission.
Who Should Use ITR-2 and ITR-3?
Understanding the applicability of ITR forms is essential for smooth tax filing:
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ITR-2 is designed for individuals and Hindu Undivided Families (HUFs) not having income from business or profession. It covers sources such as salary, capital gains, house property, foreign income, and crypto earnings.
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ITR-3, on the other hand, is for individuals and HUFs with income from business or professional services, including those who are freelancers, doctors, lawyers, or consultants.
Additionally, if a person has to club income from a spouse or minor child (as per income tax rules), they may also need to file through these forms.
What Is the Excel Utility?
The Excel Utility is a downloadable tool offered by the Income Tax Department that allows users to prepare their ITR forms offline before submitting them online. Here’s how it works:
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Visit the official e-filing portal of the Income Tax Department.
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Download the Excel utility for ITR-2 or ITR-3.
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Extract the ZIP file, open the Excel form, and enter all required details, including personal information, income sources, deductions, and TDS.
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Once completed, log in to the portal and upload the filled-out form.
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Don’t forget to verify your return within 30 days of submission to complete the filing process.
Key Changes in ITR-2 and ITR-3 for AY 2025-26
Several important updates have been introduced in these forms, aimed at increasing transparency and simplifying reporting:
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Capital Gains Reporting:
Taxpayers now need to clearly indicate whether capital gains were earned before or after July 23, 2024. This distinction is vital for accurate computation and audit trails. -
Buyback Losses from October 1, 2024:
If taxpayers have incurred losses due to share buybacks post-October 1, 2024, they can offset these losses more effectively by disclosing gains under 'Income from Other Sources'. -
Property and Liability Reporting Threshold:
Earlier, those with income above ₹50 lakh had to report their assets and liabilities. Now, this threshold has been raised to ₹1 crore, offering relief to many taxpayers.
Easier Investment Reporting, Better Accuracy
With these revisions, the tax filing process has become easier and more structured:
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Reporting TDS: Taxpayers now need to enter TDS details along with relevant section codes. This step increases accuracy and minimizes mismatches during verification.
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No Property Disclosure Below ₹1 Crore: Those earning between ₹50 lakh and ₹1 crore no longer need to declare their assets and liabilities, simplifying filing for upper-middle-income groups.
These updates are particularly beneficial for crypto investors, stock traders, and individuals with multiple income sources who previously faced challenges in complying with complex reporting norms.
Final Word: File Early, File Smart
With the ITR season heating up, now is the perfect time to download the Excel utility, gather your financial documents, and prepare your return in advance. Especially for those involved in crypto, real estate, or equity investments, understanding these new ITR changes can help avoid penalties, interest, or notices later.
Keep in mind, verification within 30 days is crucial to complete the process. Also, if you're unsure which ITR form applies to you or how to report certain income, it's wise to consult a tax professional.
