What is ITR-3 form? Eligibility, Documents, and How to File (2024)

Many taxpayers are now preparing to file their Income Tax Return (ITR). As It’s time to file income tax returns for FY 2022-23 (AY 2023-24). ITRs are important forms to take care of while filing. And it depends on the source of income and earned income.

ITR-3 form is for Hindu Undivided Families (HUFs) and individuals with income from profession and business. It is one among various ITR forms established by the IT department of India. There are 7 ITR forms ITR 1 to ITR 7 for different types of taxpayers.

What is ITR-3 form?

Compared to Income Tax Returns-1 and Income Tax Returns-2, Income Tax Returns-3 or ITR-3 is an ITR form meant for individuals and HUFs. It is used by one who has the following income sources:

• Income from business
• Income from profession
• Income from capital gains
• Income from house property
• Income from other sources
• Income from salary
• Income from pension

ITR-3 applies to all taxpayers excluding those with professional income under assumed taxation. It includes business income, covered under ITR-4.

The ITR-3 details the information about taxpayer’s income and deductions. It is broad and contains different sections. Taxpayers have to give some relevant information. For example, income details from other sources, paid taxes, deductions, verification, etc.

What are the steps to file the ITR form?

Follow these simple steps to file ITR. Consider a few points while filing.

1. Document collection:
   • There are a few important documents required for the process. Documents related to your income, exemption, and deduction are required. Among all the most crucial documents are Form 16, bank statements, investment proof, etc.

2. Choosing the proper ITR Form:
   • You need to determine the suitable ITR form for you. You can choose based on residential status, income sources, and other factors. There are totally 7 different types of ITR forms from ITR-1 to ITR-7. These 7 ITRs are available for various categories of taxpayers. Make sure to select an appropriate form that fits your situation.

3. Taxable income calculation:
   • Consider all the sources of income and calculate the total income for the financial year. This includes business income, rental income, salary, and other income. Subtract eligible deductions and exemptions to find your taxable income.

4. Fill out an ITR form:
   • Fill in your ITR forms accurately with the required documents and information. Provide the most crucial details like deductions and tax payments. Don’t forget to give proper personal information and income details. Make sure to fill in the correct details to avoid any kind of difference.

5. ITR submission:
   • Submit ITR after filling out all the relevant details.

Steps to file your ITR Online

You can choose an online option to file ITR. Follow the below steps:

• Step 1: First visit the e-filing website and log in to the portal. Use your password and ID.
• Step 2: Click e-File then followed by ITR and file ITR on your dashboard.
• Step 3: Choose AY as 2023-24 and click continue by choosing online mode of filing.
• Step 4: Click ‘Resume Filing’ if your submission is pending in case, you have filed it before. And click ‘Start New Filing’ if you want to start over with your return. At last, discard the saved one.
• Step 5: Select your applicable status whether it is individual, HUFs, or other. Then proceed with ‘Continue’.
• Step 6: Here, select one among the obtained two options. That is your type of Income Tax Return. You have got two options here.
  • Select your ITR form if you are already aware of that.
  • And if you have no idea about which ITR to choose, click proceed on ‘Help me decide which ITR form to file’. There it will display the suitable ITR option for you.
• Step 7: After choosing a suitable ITR, note the required documents. Then click on the ‘Let’s Get Started’ option below.
• Step 8: Continue with choosing the checkbox that applies to you concerning the reason for filing.
• Step 9: To opt for a new tax regime, click ‘Yes’ in the ‘Personal Information Section’. However, in the new tax regime, some exemptions and deductions are not available. Edit and enter the required data and proceed by clicking ‘Confirm’.
• Step 10: Enter the details about your total deductions and income separately. Proceed after completing all the sections in the form.
• Step 11: After validating proceed with the payment, where you get two options Pay Now and Pay Later. It is better to choose the Pay Now option. If you choose to Pay Later, you can settle the payment after filing your ITR. However, there’s a risk of being seen as a defaulter if you choose to Pay Later. And it might lead to owing interest on unpaid taxes.
• Step 12: The ‘Pay Now’ option will redirect you to e-pay tax services. Click the ‘Continue’ option. A message of success will be displayed after the successful payment. Now click “Back” to finish filing your tax return.
• Step 13: Choose for ‘Preview Return’.
• Step 14: Click ‘Proceed to Preview’ on the Preview and Submit Your Return page.
• Step 15: All you have to do is choose the option for validation and verification.
• Step 16: Finally, after the e-verification of your return, you’ll see a success message. It contains the Transaction ID and Acknowledgment Number. You’ll also get confirmation via mobile and email.

What is the eligibility to file Income Tax Returns?

The following are eligible to file ITR:

• Income earned by an individual running their own business or profession as a proprietor.
• Income gained from the activities that fall under other sources. Like income by winning the lottery, horse racing, etc.
• Earnings from multiple house property.
• Income from the assets in countries outside India
• Short-term and long-term capital gains.

Who cannot file ITR-3?

• Individuals whose income is from foreign assets cannot file.
• ITR-3 cannot be filed by the individual who files ITR-1, ITR-2, or ITR-4.

What are the documents required for filing ITR-3?

To file for ITR-3, the following documents are required.

• Permanent Account Number (PAN card)
• Aadhaar Identity Card
• Details of bank account
• Form 16, for salaried individuals (if applicable)
• Investment details
• If you have professional or business income, you need to provide books of account.

What is the structure of ITR-3 form?

The structure of ITR-3 is divided into 6 sections. They are:

• General details:
  • This section contains the individual’s details like name, address, DOB, email ID, etc. A PAN card and specifying the assessment year is mandatory. Mentioning whether you are filing a return as a self-assessment is required.
• Details of income:
  • This category asks for your income from different sources. They are like salaries, pensions, and other sources. You need to figure out how much you earned and how much tax you owe.
• Paid taxes and deductions:
  • This segment can claim deductions that have been permitted under some section of the IT Act.Reporting the taxes you have during the FY, like self-assessment and advanced taxes.
• TCS and TDS credit:
  • This section looks after the mandatory inclusion of details regarding Tax Deducted at Source (TDS) and Tax Collection at Source (TCS).
• Verifying and Declaring:
  • This is the final section assigned to validate ITR through the Digital Signature Certificate (DSC) method. Or you can dispatch a copy of the signed return to the Centralized Processing Center. Then you need to make a declaration that all the furnished information in return is accurate.

Conclusion

In conclusion, ITR-3 is a form in ITR that is meant for individuals and HUFs. It is one among 7 different types of ITR forms. Different types of taxpayers can choose their suitable ITR forms. If you have business or professional earnings not under assumed taxation, you’ll use ITR-3.

It covers a wide range of income and deductions. You need to fill in details like other income sources, taxes paid, deductions, and verification.

There are even steps to follow while applying for the ITR 3 form. Submit relevant required documents accurately for smooth filing. Don’t forget to give particular personal details which are crucial. Know the eligibility criteria for who can and cannot apply for ITR-3 prior.

For smooth and accurate ITR-3 filing, reach out to24efiling. We provide expert guidance to ensure a hazzle free submission of your Income Tax Return.

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