The ITR-3 form is for individuals and HUFs (Hindu Undivided Families) who earn income from a proprietary business or by practising his/her profession. Let's take a closer look at this income tax return form – who is it for, how to fill it and more.

Who can file ITR-3?

  • Individuals who run an inherited proprietorship business
  • Individuals who earn income from house property, his/her profession like doctors, lawyers, etc and other sources
However, note that if an individual earns income as a partner of a firm, he/she cannot file ITR-3. Instead, he/she should choose the ITR-2 form.

You can file your income tax returns using the ITR-3 form if your total income is derived from:
  • Income from a house property – single house or multiple houses
  • Income from capital gains – short-term and long-term
  • Income from a profession/business that is run as a proprietorship
  • Income from the lottery, races, and legal gambling
  • Income from overseas assets that belong to you

Structure of the ITR-3 Form

ITR-3 form has two parts: Part A and Part B.

Part A includes:
  • General information about the individual (or HUF) and the type of business
  • The balance sheet
  • Profit and loss sheet
  • Quantitative details (applies when you are eligible for audits under Section 44AB)
  • Other information (optional)
Part B consists of the total income, taxable income, and other tax computations.

While filling the ITR-3 form, make sure to follow the order mentioned below to avoid making mistakes:

Step 1: Fill the general information section in Part A
Step 2: Fill up the schedules
Step 3: Fill the TI section in Part B, followed by the TTI section in Part B
Step 4: Complete the process by filling in the verification section

How to File ITR-3?

Taxpayers can file their income tax returns using ITR-3 either online or offline. Once you have successfully submitted the ITR-3, you receive an acknowledgement from the Income Tax officials as ITR-V. You can download the ITR-V from the website of the Income Tax Department.

Key Points to keep in mind while Filling ITR-3

  • It’s now compulsory to provide the Aadhaar number while filing income tax returns.
  • If your total income exceeds Rs. 50 lakhs in a year, you have to provide a detailed list of your movable assets and addresses of the immovable property you own.
  • If you have deposited more than Rs. 2 lakhs in your account during demonetization, you have to mention it in the ITR-3 form.
  • You have to disclose unexplained income and other dividend income that exceeds Rs. 10 lakhs.
  • Individuals are required to provide the registered number of the CA firm that helps them file tax returns.
Once you understand the basics of the ITR-3 form, you can see that it’s not all that complicated. Use this guide to help you fill the ITR-3 form correctly and avoid tax calculation mistakes.

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DISCLAIMER

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.



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