What is ITR-3?
ITR-3 is the Income Tax Return form for individuals and Hindu Undivided Families (HUFs) who have income from a proprietary business or profession — in addition to income from salary, house property, capital gains, and other sources. It is the most comprehensive ITR form for individuals.
ITR-3 is applicable to doctors, lawyers, consultants, chartered accountants, freelancers, traders, and any individual running a business or profession without opting for the presumptive taxation scheme under Section 44AD/44ADA.
Who Should File ITR-3?
- Individuals and HUFs with income from a proprietary business
- Professionals (doctors, lawyers, CA, architects, consultants) with professional income
- Partners in a partnership firm (income from firm share, salary, commission, interest)
- Individuals with business income who are not eligible for presumptive taxation (ITR-4)
- Individuals with business income exceeding ₹2 Crore (beyond ITR-4 limit)
- Individuals who opted out of presumptive taxation scheme in previous years
- Individuals with losses from business to be carried forward
Key Features of ITR-3
| Feature | Details |
|---|
| Business/Profession Income | Profit & Loss account, Balance Sheet, trading account required |
| Capital Gains | Full reporting of STCG and LTCG |
| Salary Income | Can include salary from employer along with business income |
| House Property | Multiple properties including let-out properties |
| Audit Requirement | Mandatory tax audit (Section 44AB) if turnover > ₹1 Crore (₹10 Crore if cash transactions < 5%) |
| Due Date (Audit cases) | 31st October of the Assessment Year |
Tax Audit Requirement
A Tax Audit under Section 44AB is mandatory for individuals with:
- Business turnover exceeding ₹1 Crore (₹10 Crore if 95%+ transactions are digital)
- Professional receipts exceeding ₹50 Lakh
- Opting out of presumptive taxation with income below 8%/6% of turnover
The tax audit report (Form 3CA/3CB + Form 3CD) must be furnished by the Chartered Accountant before the due date.
