What is ITR 3 Form?

  • Author :
  • TATA AIG Team
  • Published on :
  • 06/11/2023

If you are an individual or a Hindu Undivided Family (HUF) with income from a business or profession, you must file your income tax return using the ITR-3 form. The ITR-3 form is one of the seven types of income tax return forms prescribed by the Income Tax Department of India.

Filing your income tax return is a legal obligation and a way to claim tax deductions and refunds and carry forward losses. Here, we will explain the ITR-3 form, who can file it, who is not eligible to file it, what is the structure of the form, and what are the ITR3 filing guidelines.

What is the ITR-3 Form?

The ITR-3 Form is an income tax return form used by individuals and Hindu Undivided Families (HUFs) with income from business or profession. This Form has various schedules and tabs to report different sources of income, such as salary, house property, capital gains, and other sources.

It also allows you to claim deductions under various Income Tax Act, 1961 sections. The ITR-3 Form can be filed online using the e-filing portal of the Income Tax Department or an E-Return Intermediary (ERI). The ITR-3 Form has to be verified either electronically or physically after submission.

ITR-3 Applicability

The ITR-3 income tax form is suitable for you if you meet any of the following conditions:

  • Regardless of tax audit applicability, you are an individual or a HUF with income from profits and gains through business or profession.

  • You have more than one house property and make income from it.

  • You earned income from other sources like winning a lottery, horse racing, or other speculative activities specified under this fifth head of income.

  • You have received income from your assets in the foreign nation.

  • You have generated income from short or long-term capital investments.

What is the Format of the ITR-3 Form?

The ITR-3 filing form consists of two parts: Part A and Part B. Part A contains general information such as name, address, PAN, Aadhaar number, bank account details, etc.

Part B contains the computation of total income and tax liability. Part B of the ITR3 form is further divided into several schedules, as follows:

Schedule Name Details 
Schedule S In-depth details of your salary income
Schedule HP Earnings from house property
Schedule BP Calculation of earnings from business or profession
Schedule DPM Plant and machinery depreciation under the Income Tax Act
Schedule DOA Depreciation on assets other than plant and machinery under the Income Tax Act
Schedule DEP Depreciation summary of all assets under the Income Tax Act
Schedule DCG Deemed capital gains from depreciable assets' proceedings
Schedule ESR Tax deduction in accordance with section 35 (expenditure on scientific research)
Schedule CG Capital gains
Schedule OS Income from other sources
Schedule CYLA Income statement after set off of current year's losses
Schedule BFLA Income statement after the setoff of unabsorbed losses carried forward from previous years
Schedule CFL Loss statement you wish to carry forward to subsequent years
Schedule UD Unabsorbed depreciation statement
Schedule ICDS The influence of income computation disclosure standards on profitability
Schedule 10AA Deduction calculation under section 10AA with respect to units in Special Economic Zone
Schedule 80G Information about donations eligible for deductions under section 80G
Schedule 80GGA Information about contributions made towards scientific research or rural development. This schedule applies to a firm partner who only makes earnings from the concerned firm.
Schedule RA Information regarding contributions made to research organisations and similar entities
Schedule 80IA Determining the deduction under section 80IA
Schedule 80IB Determining the deduction under section 80IB
Schedule 80IC/80IE Computation of deduction under section 80IC/80IE
Schedule VIA Deductions under Chapter VI-A. You can enjoy the tax benefits of health insurance under this schedule
Schedule AMT Calculation of alternate minimum tax payable as per section 115JC
Schedule AMTC Tax Credit Calculation according to section 115JD
Schedule SPI Earning of specified persons (spouse or minor child) includible in the assessee's income
Schedule SI Earning chargeable to tax at special rates
Schedule IF Detail of partnership firms in which you are a partner
Schedule IF Detail of partnership firms in which you are a partner
Schedule EI Details of exempt income, such as dividends, agricultural income, etc.
Schedule PTI Information about pass-through income from an investment fund or business trust per sections 115UA and 115UB
Schedule FSI Information regarding earnings from foreign sources and associated tax reliefs
Schedule TR Overview of tax relief claimed for taxes paid in foreign countries
Schedule FA Information on income from foreign assets and any source outside India
Schedule GST Details of turnover or gross receipt documented for GST
FD Schedule Breakdown of foreign currency payments/receipts
Schedule VDA Income from virtual currency or other digital assets

How to File ITR-3

You can file your ITR-3 form online through the e-filing portal of the Income Tax Department or any authorised e-return intermediary. Here are some steps to file ITR 3 online for AY 2023-24:

Step 1: Go to the Income Tax's official e-filing portal and log in with your user ID (PAN), password, and captcha code.

Step 2: Navigate to the ‘e-File’ menu and select ‘Income Tax Forms’. Choose the assessment year as 2023-24 and the form name as ITR-3. Click on ‘Continue’.

Step 3: You can either prepare and submit the ITR-3 online using the web-based utility or download the offline utility and upload the XML file after filling it. If you prepare online, you will see a prefilled form with your personal and income details fetched from the Income Tax Department’s database. You can edit or add any information as required.

Step 4: Fill in the relevant schedules and tabs of the ITR-3 form with your income from business or profession, capital gains, house property, salary, and other sources. You can also claim deductions under various sections and report your taxes paid and verification details.

Step 5: Preview your ITR-3 form and verify all the information. You can also use the ‘Calculate Tax’ button to check your tax liability or refund. If everything is correct, click on ‘Submit’.

Step 6: Choose a verification option for your ITR-3. You can verify it electronically using Aadhaar OTP, EVC, or DSC, or physically send a signed copy of ITR-V to CPC Bengaluru within 120 days of filing. Once you verify your ITR-3, you will receive an acknowledgement email from the Income Tax Department.

Late Filing Penalties for ITR-3 Form

If you are filing ITR-3 after the due date but before December 31st of the assessment year, the fee will be ₹5,000. If the filing is after December 31st, the penalty increases to ₹10,000.

However, keep in mind that if your total income is below or up to ₹5 lakh, the late fee is a maximum of ₹1,000.

Modifications in ITR-3 for Assessment Year 2023-24

As per the modifications in ITR-3, you must disclose the following information:

  • A cash deposit of over ₹1 crore in the current account, regardless of the bank.

  • Spending over ₹2 lakh on foreign travel.

  • Spending ₹1 lakh on electricity bills in a year.

Other changes–

  • The introduction of Section 112A pertains to long-term capital profits on the sale of units of a business subject to Securities Transaction Tax (STT) or equity shares.

  • If you are a director in a company or have investments in unlisted equity, it is necessary to disclose the type of company.

Conclusion

You should file your ITR-3 form online before the due date to avoid any penalty or interest. After submitting it, verify your ITR form to complete the filing process.

The ITR-3 form is important for individuals and HUFs who have income from business or profession. It helps you to report your income from various sources, claim tax deductions like premiums paid for a medical insurance plan and exemptions, pay tax dues, and get tax refunds.

The benefit of having a valid health insurance policy can greatly impact the potential tax deductions, reducing your tax payable by a great margin. Tata AIG offers numerous affordable health insurance plans that provide excellent cover options with multiple add-on features.

Choose the one as per need and benefit from tax exemptions and health cover simultaneously.

FAQs

Who is not eligible for ITR 3?

Those who have income from salary, one house property, other sources (except lottery and race horses), and agricultural income up to ₹5,000. They can use ITR-1.

Can we file ITR 3 on our own?

Yes, you can file this form on your own by going to the income tax e-filing portal.

ITR 3 is for whom?

Individuals or Hindu Undivided Families (HUFs) with income under the "Business and Profession" category should file an ITR3.

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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