ITR-3 Form: How to File ITR-3 Online

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What is the ITR-3 Form?

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

For ITR-3 to be applicable, the taxpayer must have a proprietorship or business as one of their income sources.

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.

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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
• Remuneration received from a partnership firm

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Who is Not Eligible to File ITR-3?

• No persons other than individuals & HUF are eligible to file ITR -3 Form.
• 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.

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What is the Structure of the ITR-3 Form?

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.
• Schedule VDA: Details of income from the transfer of virtual digital assets.

Part B consists of:

• Part B-TI: Computation of Total Income.
• Part B-TTI: Computation of tax liability on total income.
• Verification

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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: Visit the Income Tax e-filing portal and log in using your PAN and CAPTCHA code.
• Step 2: Navigate to ‘e-File’ > ‘Income Tax Forms’. Select the Assessment Year 2023-24 and choose ‘ITR-3 Form’. Click ‘Continue’.
• Step 3: Choose one of the following methods to file ITR-3:
  • Online mode: Fill in the form directly on the portal.
  • Offline mode: Download the form, complete it, and upload it as an XML file.
• Step 4: In the online mode, a pre-filled form will appear with your personal and income details. You can review and edit the information as needed.
• Step 5: Enter details about your profession, business income, salary, house property, capital gains, and other sources of income. Claim applicable tax deductions and report paid taxes.
• Step 6: Review your ITR-3 form, verify the entered details, and use the ‘Calculate Tax’ option to check your tax liability or refund. Once satisfied, click ‘Submit’.
• Step 7: Choose a verification method to complete the filing:
  • OTP-based electronic verification (via Aadhaar-linked mobile number).
  • Digital Signature Certificate (DSC).
  • Electronic Verification Code (EVC).
• Step 8: Upon successful verification, the Income Tax Department will send an acknowledgment email to your registered email ID.

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Due Date for Filing Form ITR 3

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 2024-25 is 31st July 2025. File Now

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 2024-25, the last date to file ITR for audit cases is 31st October 2025 (unless otherwise specified).

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Major Changes in ITR-3 form for AY 2025-26

Capital Gain Split: Before and After 23rd July 2024

• Under the amendments introduced by the Finance Act, 2024, capital gains must now be bifurcated based on whether they arise before or after 23rd July 2024.
• Taxpayers are required to categorise their capital gains accordingly and compute taxes under the applicable provisions.
• This change is intended to streamline reporting and ensure accurate tax treatment in line with the revised law.

Capital Loss on Share Buyback: Effective from 1st October 2024

• Starting 1st October 2024, capital losses incurred on share buybacks will be allowed, provided that the corresponding dividend income is reported under "Income from Other Sources".
• Taxpayers must ensure proper reporting of dividend income to legitimately claim such losses under the capital gains head.
• This clarification provides much-needed transparency on the treatment of buyback-related transactions.

Asset & Liability Reporting Threshold Raised to ₹1 Crore

• The disclosure requirement for assets and liabilities in ITR-3 has been revised.
• Now, only taxpayers with total income exceeding ₹1 crore are required to furnish detailed information under this section.
• The enhanced threshold aims to reduce compliance burden for smaller taxpayers while increasing transparency for high-income individuals.

Introduction of Section 44BBC – Presumptive Taxation for Cruise Operators

• The ITR-3 form now incorporates Section 44BBC, a newly introduced presumptive taxation provision under the Budget 2024, applicable to non-resident cruise operators.
• Under this section, 20% of gross receipts from passenger carriage is deemed as taxable income.
• This addition simplifies compliance by clarifying the reporting obligations for businesses operating in the cruise sector.

Enhanced Reporting for Deductions (Sections 80C, 10(13A), etc.)

• Taxpayers claiming deductions under Section 80C, Section 10(13A) (House Rent Allowance), and other relevant sections will now be required to furnish more granular details in the ITR-3 form.
• The aim is to ensure accurate eligibility validation, minimize errors, and enhance overall compliance.

Mandatory TDS Section Code Reporting in Schedule-TDS

• A new field has been added in Schedule-TDS of the ITR-3 form, mandating the reporting of TDS section codes (e.g., 194J, 194C, etc.).
• This move is intended to improve the reconciliation process and provide greater clarity in TDS-related disclosures for both taxpayers and tax authorities.

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Business Codes for ITR Forms

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. Need help filing your ITR or have a tax-related query? Hire an online CA and make the most of the deductions available to you while resolving your tax queries. Hire an Online CA Now!

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