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ITR3: Detailed guide
ITR-3 is an income tax return form that is used by individuals and Hindu Undivided Families (HUFs) who earn income from profits and gains of business…

ITR-3 is an income tax return form that is used by individuals and Hindu Undivided Families (HUFs) who earn income from profits and gains of business or profession. Individuals who are partners in businesses but do not earn money from a proprietary business or profession can also use this form. This form is also used by taxpayers with income from a presumptive business.

Who can file ITR-3?

Individuals and HUFs who get income from profits and gains from business or profession or who are partners in businesses can file the ITR-3 form.

Mode of filing

The ITR-3 form can be filed both online and offline, according to the convenience of the taxpayer. Online filing can be done by visiting the Income Tax Department's e-filing portal, while offline filing can be done by submitting a hard copy of the ITR form to the Income Tax Department.

Components of the form

There are various sections on the ITR-3 form, including those for personal data, income from a business or profession, income from other sources, deductions, and tax computation.

Deadline for filing

The due date for filing ITR-3 for individuals and HUFs is July 31st of every assessment year. However, the deadline for taxpayers who have to have their accounts audited is September 30. But in some cases, the Income Tax Department may extend the deadline.

Penalties for non-filing or late filing

If a taxpayer fails to file ITR-3 within the due date, they may have to pay a penalty of up to Rs. 10,000. Additionally, interest may also be levied on the tax due.

Document requirements

Taxpayers filing ITR-3 are required to have the following documents ready and available-

PAN card Aadhaar card

Bank statements

TDS certificates

Details of income from other sources

Details of tax-saving investments

Profit and loss statement and balance sheet, if applicable

The ITR-3 is primarily used for reporting business or professional income, although depending on the circumstances, taxpayers may also need to complete other schedules and annexures. It is advised that taxpayers work with a tax expert to make sure their ITR-3 has been submitted appropriately and on time. And hence we are here.

Major Changes in ITR 3 form for AY 2023-24

The below changes have been made in the ITR-3 form of the FY 2022-23:

A new schedule VDA has been added so that your income from crypto and other VDAs can be reported individually. The Capital Gains Schedule requires a quarterly breakdown if you count income from VDAs as capital gains. Every VDA transaction must be reported in the new ITR-3, along with the dates of sale and buy.

On the new ITR 3 form, a few questions have been added to find out if you opted out of the New Tax Regime in past years. Foreign institutional investors (FII/FPI) must give their SEBI registration number as an extra measure of transparency. Balance sheet reporting has changed slightly. The new ITR-3 form says that advances from people listed in Section 40A(2)(b) of the Income Tax Act and others must be reported under "Advances" in the "Source of Funds" section. Under the new section called "Trading Account," the turnover and income from intraday trading must be recorded.

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