The Income Tax Return (ITR)-3 form is applicable for individuals and Hindu Undivided Families (HUFs) who have income from business or profession or are partners in a firm but do not have income from a proprietary business or profession.
Who Should File ITR-3?
You must file ITR-3 if you fall under any of the following categories:
✅ Self-employed professionals (Doctors, Lawyers, CAs, Freelancers, etc.)
✅ Business owners (Sole Proprietors, Partners in a Firm)
✅ Individuals with income from business/profession along with salary, house property, capital gains, or other sources
✅ Partners in a partnership firm (but not earning salary from the firm)
Who Cannot File ITR-3?
- Salaried individuals with no business income(should file ITR-1 or ITR-2)
- People earning only from capital gains, house property, or other sources (should file ITR-2)
Key Components of ITR-3 Form
The ITR-3 form consists of multiple sections:
1. Personal Information
- Name, PAN, Aadhaar, contact details
- Residential status (Resident/Non-Resident)
2. Income Details
- Salary Income (if applicable)
- House Property Income (Rental income, interest on home loan)
- Business/Profession Income (Profit & Loss details)
- Capital Gains (Sale of property, stocks, mutual funds)
Other Sources (Interest, dividends, gifts, etc.)
3. Deductions (Chapter VI-A)
- Section 80C (PPF, LIC, ELSS, etc.)
- Section 80D (Health Insurance)
- Section 80G (Donations)
- Other deductions (80E, 80TTA, etc.)
4. Tax Computation
- Total taxable income
- Tax liability (including advance tax, TDS, self-assessment tax)
- Rebate under Section 87A (if income ≤ ₹7 lakh)
- Surcharge & Health & Education Cess
5. Verification & Submission
- Digital Signature (if applicable)
- E-verification via Aadhaar OTP, Net Banking, or sending signed ITR-V to CPC
Documents Required for Filing ITR-3
- PAN & Aadhaar Card
- Bank statements & Form 26AS (for TDS details)
- Profit & Loss Statement & Balance Sheet (for business income)
- Capital Gains Statements (if applicable)
- Home loan interest certificate (if claiming HRA or house property deductions)
- Investment proofs (for deductions under 80C, 80D, etc.)
Penalty for Late Filing
- ₹5,000 (if filed after due date but before 31st December)
- ₹10,000 (if filed after 31st December)
- No late fee if total income ≤ ₹5 lakh (max penalty ₹1,000)
Final Tips
✔ Maintain proper books of accounts if turnover exceeds ₹10 lakh (business) / ₹50 lakh (profession)
✔ Reconcile Form 26AS & AIS before filing
✔ Claim all eligible deductions to reduce tax liability
✔ File before the due date to avoid penalties