ITR-3 is an income tax return form used in India for individuals and Hindu Undivided Families (HUFs) who have income from the following sources:
- Income from business or profession
- Income from salary or pension
- Income from house property
- Income from capital gains
- Income from other sources
ITR-3 is applicable to taxpayers who have income from any of the above-mentioned sources, except for individuals who have income from profits and gains of business or profession under the presumptive taxation scheme, which is covered under ITR-4.
The ITR-3 form is more comprehensive and allows taxpayers to provide detailed information about their income and deductions across various sources. It consists of different sections where taxpayers need to provide relevant details, such as personal information, computation of total income, details of income from different sources, deductions, taxes paid, and verification.
Who Can File ITR-3?
ITR-3 can be filed by the assesses falling in the following categories:-
- Income from a profession or business carried under a proprietorship firm, wherein the taxpayer is a proprietor (both audit and non-audit cases)
- Income from more than one house property
- Rewards earned by winning a lottery, horse racing, and other activities falling under ‘Income from Other Sources
- Income assets by way of assets in a country outside India
- Income generated from short or long-term capital gains
Who are Not Eligible to File ITR-3?
- Individuals who file Form ITR‐1 (Sahaj), ITR‐2, or ITR‐4 (Sugam) are not eligible to file ITR-3.
- Income earned from foreign assets.
Given below are the changes that were introduced in the ITR 3 form in FY 2022-23 and will be applicable for FY 2023-24 as well -
- A schedule VDA has been added to let individuals report their income from cryptocurrencies and VDAs. If you consider your VDA as capital gains. Then, you need to provide a breakdown of the capital gains schedule. You need to report every VDA transaction in ITR 3, along with the sale and purchase date.
- ITR 3 now consists of a few questions aimed at determining if you have opted for the new tax regime in the previous years.
- FIIs and FPIs are required to provide their SEBI registration number as an additional disclosure method.
- As per the new ITR 3 form, any advance received from individuals specified under section 40A(2)(b)
- Turnover and income from intraday trading should be reported in the newly introduced section “Trading Account.”
ITR-3 comprises the following sections:
Part A
- Part A-GEN: General details and Nature of Business
- Part A-BS: Balance Sheet as of March 31, 2021, for the Proprietary Business or Profession
- Part A- Manufacturing Account: Manufacturing Account for the financial year 2020-21
- Part A- Trading Account: Trading Account for the financial year 2020-21
- Part A-P&L: Profit and Loss for the Financial Year 2020-21
- Part A-OI: Optional Other Information (if not subject to audit under Section 44AB)
- Part A-QD: Optional Quantitative Details (if not subject to audit under Section 44AB)
Following these sections, there are the subsequent schedules:
- Schedule-S: Calculation of income from Salaries.
- Schedule-HP: Calculation of income from House Property.
- Schedule BP: Calculation of income from business or profession.
- Schedule-DPM: Depreciation computation on plant and machinery under the Income-tax Act.
- Schedule DOA: Depreciation computation on other assets under the Income-tax Act.
- Schedule DEP: Summary of depreciation on all assets under the Income-tax Act.
- Schedule DCG: Computation of deemed capital gains on the sale of depreciable assets.
- Schedule ESR: Deductions under section 35 (expenditure on scientific research).
- Schedule-CG: Calculation of income from Capital gains.
- Schedule 112A: Details of Capital Gains where section 112A applies.
- Schedule 115AD(1)(b)(iii)Proviso: Details of Capital Gains for Non-Residents where section 112A applies.
- Schedule-OS: Calculation of income from Other sources.
- Schedule-CYLA-BFLA: Statement of income after set-off of current year’s losses and unabsorbed loss brought forward.
- Schedule-CYLA: Statement of income after set-off of current year’s losses.
- Schedule BFLA: Statement of income after set-off of unabsorbed loss brought forward.
- Schedule CFL: Statement of losses to be carried forward to future years.
- Schedule- UD: Statement of unabsorbed depreciation.
- Schedule ICDS: Effect of Income Computation Disclosure Standards on Profit.
- Schedule- 10AA: Deduction computation under section 10AA.
- Schedule 80G: Statement of donations eligible for deduction under section 80G.
- Schedule RA: Statement of donations entitled for deduction under specific sections.
- Schedule- 80IA: Deduction computation under section 80IA.
- Schedule- 80IB: Deduction computation under section 80IB.
- Schedule- 80IC/ 80-IE: Deduction computation under section 80IC/ 80-IE.
- Schedule VI-A: Statement of deductions under Chapter VIA.
- Schedule AMT: Computation of Alternate Minimum Tax under Section 115JC.
- Schedule AMTC: Computation of tax credit under section 115JD.
- Schedule SPI: Statement of income for spouse/minor child/son’s wife or others to be included in the assessee's income.
- Schedule SI: Statement of income taxable at special rates.
- Schedule-IF: Information regarding partnership firms where the assessee is a partner.
- Schedule EI: Statement of income not included in total income (exempt incomes).
- Schedule PTI: Pass-through income details from business trust or investment fund as per section 115UA, 115UB.
- Schedule TPSA: Secondary adjustment to transfer price as per section 92CE(2A).
- Schedule FSI: Details of income from outside India and tax relief.
- Schedule TR: Statement of tax relief claimed under specific sections.
- Schedule FA: Statement of Foreign Assets and income from sources outside India.
- Schedule 5A: Information regarding income apportionment between spouses governed by the Portuguese Civil Code.
- Schedule AL: Asset and Liability at the end of the year (if total income exceeds Rs 50 lakhs).
- Schedule GST: Information regarding turnover/Gross receipt reported for GST.
Part B consists of:
- Part B-TI: Computation of Total Income.
- Part B-TTI: Computation of tax liability on total income.
- Verification
How to File ITR-3?
Now that you know what is ITR 3 form, let’s understand how to file ITR 3. The ITR-3 filing can be done via two modes:-
Offline Filing
In this method, you can fill out the ITR-3 form in a paper format or through a bar-coded return. The filled-in form needs to be physically submitted to the designated income tax office within the specified timelines. It's crucial to ensure that the form is accurately filled, signed, and all the necessary supporting documents are attached.
Steps to File ITR 3 Online
- Step 1. By using a digital signature while submitting a return electronically.
- Step 2. By electronically transmitting the data in ITR-3 form with an electronic verification number.
- Step 3. By sending the information in the ITR-3 form electronically and then mailing the return verification in the ITR-V form to the income tax office.
If you are not liable to get an audit done, then the due date for filing form ITR 3 will be July 31st of the relevant year. For example, the last date to file ITR for FY 2023-24 is 31st July 2024.
Similarly, in cases where the taxpayer is required to get his/her books of accounts audited, then, the due date for filing ITR 3 is 31st October of the relevant year. Therefore, for FY 2023-24, the last date to file ITR for audit cases is 31st October 2024 (unless otherwise specified).
Filing ITR 3 yourself can be confusing and daunting. Since ITR 3 is a bit complicated, especially for laymen, it is advisable to get help from professionals to avoid further penalties and notices. The ITR filing season for FY 2023-24 has already begun. Hire an online CA and make the most of the deductions available to you while ensuring compliance with tax laws. Hire an Online CA Now!
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