ITR 3 – What is the ITR 3 Form and How to File ITR-3?

Rakesh Kumar

15 Dec, 2023

ITR-3 is one of the 7 prominent forms of tax forms available to file an Income Tax Return. The filing process has been classified into various forms per the taxpayer’s income sources so that the process is easy to follow by respective Taxpayers. Owing to another 3-prior form, ITR-1, ITR-2, and ITR-2A, ITR-3 is quite similar to all. However, only minor differences among these types of forms bring them into a different line of filing. Individuals and HUFs also utilize ITR-3 for filing taxes if their income is sourced from salary, rental property, occupation, business, or profession. On the other hand, if one source falls to be the partnership firm, then ITR-3 cannot be filed. Therefore, it is recommended that taxpayers evaluate their income sources to further avoid the wrong selection of the ITR Form, as such an act can lead to cancellation of your filed ITR.

Are you eligible to file ITR-3?

You are eligible to file ITR-3 if you are an Individual or a HUF and have your income sourced in the following ways:

• Income Sourced from Profession or businesses carried under a proprietorship firm irrespective of audit status
• Income Sourced from one or more than one house properties
• Income Sourced from winning a lottery, horse racing, and other activities described under ‘Income from Other Sources
• Income is Sourced from assets in a country outside India.
• Income is Sourced from either short or long-term capital gain.

Note: If you are an Individual or HUF with your income sourced as a partner of a certain partnership firm engaged in a business/profession, then you are not eligible to file ITR-3. In such a case, you may file ITR-2 instead.

When do you have to file ITR-3?

Individuals or businesses who are filing Income Tax Return are required to file ITR-3 before the following due dates to avoid any legal repercussions:

• NON-AUDITED CASES: 31^st July of the respective assessment year [FY 2022-23 (AY 2023-24): 31^st July 2023]
• AUDITED CASES: 31^st October of the respective assessment year [FY 2022-23 (AY 2023-24): 31^st October 2023]

Delay in filing the ITR-3 as per the aforementioned dates can result in a penalty either in the form of Interest or a Fine only if you file the ITR-3 before 31^st December. Otherwise, another kind of penalty will be imposed on the defaulter.

Your Go-to Checklist for ITR-3

While filing the ITR-3, make sure that you have the following documents with you to avoid any last-minute hassle.

Understand ITR-3 with Enterslice

The ITR-3 form consists of six sections focusing on different information segments for the taxpayer. These six sections consist of general information, Income Details, Tax deductions, exemptions availed, TDS/TCS credit, and the verification and declaration. In order to further understand the requirements, let’s understand each section in elaborated form.

1. General Information: This segment requires information about the taxpayer, such as name, address, PAN details, etc
2. Income:
3. Paid Taxes and deductions:
4. TCS/TDS:
5. Verification:

Let’s learn to File ITR-3.

If you want to file your ITR-2, here is the step-by-step guide for you:

• Step 1: Visit the website for e-filing
• Step 2: Log into your account using your PAN Details and Password
• Step 3: Select the tab “e-file” and then select “Income Tax Return” to further select “File Income Tax Return.”
• Step 4: Select the respective assessment year as well as the mode for filing (online)
• Step 5: Proceed with the filing by checking on “Start New Filing”
• Step 6:  Select the relevant status
• Step 7: Select “ITR-30” in the drop-down menu for a form type
• Step 8: Fill the required information along with bank account details
• Step 9: Edit and review the personal details shown on the first slab, inclusive of Permanent Information, address, Identification and contact details, bank details, etc.
• Step 10: Now, move onto the income tax slab and add your details such as salary income, rental income or housing property, other income, capital gain income, and Business Income.
• Step 11: After completing the income slab, move on to the tax saving category. Add exemptions availed. After updating all the details, move on to the tax summary to pay your final taxed amount.
• Step 12: verify the ITR. print two copies of ITR-V¹ for verification duly signed by you. You can retain one copy for a personal record, and another copy at the following address: Post Bag No. 1, Electronic City Office, Bengaluru–560100 (Karnataka).

If you get late in filing…

It is recommended to taxpayers to file the return within the specified deadlines. Otherwise, the late filing will result in penalty imposition in the following manner:

• A late filing fee of Rs. 5,000 is to be imposed if the filing has been done after the due date but before 31^st December of the respective assessment year.
• A Late filing fee of Rs. 10,000 is to be imposed if the filing has been done after the due date and even after 31^st December of the respective assessment year.

Apart from the aforementioned manner, it is important to remember that the penalty amount or the late filing fee to be imposed on a taxpayer is to be decided based on the taxpayer’s income, including other vital factors. In order to elaborate this with an example, if your gross income is less than Rs. 5 lakhs, then the maximum limit for late filing fee capping is supposed to end at Rs. 1000, which extends to 10,000 under various circumstances and increases in the total income of the taxpayer. Therefore, to avoid any penalty, make sure you abide by the rules and the deadlines while filing the Income Tax Return.

Conclusion

Suppose you are a taxpayer looking forward to paying taxes for your income sourced from different means like profession, salary, rented property, capital gains, lottery, etc. In that case, you are required to file your Income Tax Return using ITR-3. Make sure the return is filed no later than 31^st July in case of non-audited accounts, which extends to 31^st October for audited Accounts to avoid any penalty or interest to be imposed on you. You can file your return either online using the portal or offline by using the utility form from the website and posting it to the respective address.

FAQs

1. https://incometaxindia.gov.in/forms/income-tax%20rules/2022/itr_v_english.pdf