What is ITR-3?

ITR-3 is an Income Tax Return (ITR) form applicable to individuals and Hindu Undivided Families (HUFs) having income from business or profession. This form is used by taxpayers who are not eligible to file ITR-1, ITR-2, or ITR-4.

Who is Eligible to File ITR-3?

Individuals and HUFs can file ITR-3 if they meet the following criteria:

• Income from business or profession (proprietorship, freelance, or consultancy income)

• Income from salary/pension

• Income from more than one house property

• Capital gains income (short-term or long-term)

• Foreign income or foreign assets

• Income from lottery, racehorses, or other speculative sources

• Directorship in a company or investments in unlisted shares

Who is Not Eligible to File ITR-3?

• Individuals who do not have business or professional income (they should file ITR-1 or ITR-2)

• Individuals eligible to file ITR-4 (Sugam) under the presumptive taxation scheme

Structure of ITR-3 Form

The ITR-3 form consists of the following sections:

• Part A: General Information

1. Name, PAN, Aadhaar number, and contact details
2. Filing type (original/revised return)
3. Residential status

• Part B: Income Details

1. Salary/pension income
2. House property income
3. Business/profession income (detailed profit and loss statement required)
4. Capital gains
5. Other sources of income (interest, dividends, etc.)

• Part C: Deductions and Taxable Income

1. Deductions under Chapter VI-A (80C, 80D, etc.)
2. Computation of total taxable income

• Part D: Tax Computation and Payment

1. Tax payable/refund details
2. Advance tax and self-assessment tax paid

• Part E: Balance Sheet and Profit & Loss Account

1. Details of assets, liabilities, and business expenses

• Part F: Verification

1. Declaration and signature of the taxpayer

How to File ITR-3?

• Step 1: Gather Required Documents

1. Profit and Loss Statement

2. Balance Sheet of the Business

3. Bank statements for business transactions

4. Form 16 (for salaried individuals with additional business income)

5. Capital gains statement (for sale of property, stocks, etc.)

6. Investment proofs for deductions (PPF, LIC, ELSS, etc.)

7. Aadhaar and PAN card

8. Foreign asset and income details (if applicable)

• Step 2: Users should log into the Income Tax Portal after completing

1. Visit www.incometax.gov.in

2. Login using PAN and password

3. Select e-File > Income Tax Return > Assessment Year

• Step 3: Choose the Correct ITR Form

1. Select ITR-3 from the available forms

2. Choose the filing type (Online or Offline JSON upload)

• Step 4: Fill in the Details

1. Enter business/profession income details

2. Provide information on assets, liabilities, and financials

3. Enter salary, capital gains, and other income details

4. Claim applicable deductions (Sections 80C, 80D, etc.)

5. Compute total taxable income

• Step 5: Verify and Submit

1. Choose e-verification mode (Aadhaar OTP, Net Banking, or DSC)

2. Submit the return and download ITR-V acknowledgment

Due Date for Filing ITR-3

• 31st July of the assessment year (for non-audit cases)

• 31st October of the assessment year (for businesses requiring audit)

Penalty for Late Filing

• ₹1,000 (if income < ₹5 lakh)

• ₹5,000 (if income > ₹5 lakh)

• Interest under Section 234A for tax due

Conclusion

ITR-3 is ideal for individuals and HUFs engaged in business, freelancing, or professional services. Filing it accurately ensures compliance and avoids penalties. Always verify details before submission and keep an acknowledgment for records.

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