As the deadline for filing income tax returns (ITRs) approaches on July 31, 2023, the income tax department has released the online ITR-3 form on its official website. This form is specifically designed for individuals and Hindu Undivided Families (HUFs) who have income from profits and gains of business or profession.
The online filing option streamlines the filing process and enhances convenience for taxpayers by using pre-filled data.
The income tax department had already made available online forms for ITR-2, ITR-1, and ITR-4. Further, on June 9, 2023, offline utilities of ITR-1 and ITR-4 for the assessment year 2023-24 were also provided.
Eligibility
The ITR-3 form is for an individual or an HUF having income under the head “profits or gains from business or profession” and who is not eligible to file Form ITR‐1 (Sahaj), ITR‐2 or ITR‐4 (Sugam).
So, to better understand who can file ITR-3 form, it is essential to know about the other three forms, too. ITR-1 is suitable for resident individuals with a total income of up to Rs. 50 lakh from salary or one property.
Additionally, individuals with income excluding lotteries, horse bets, and those with agricultural income up to Rs. 5,000 can also use ITR-1.
Elsewhere, ITR-2 is meant for individuals without income from business or profession from sources like interest, salary, bonus, commission, or remuneration from a partnership firm. Individuals who need to club their income with that of another person are not eligible for ITR-2.
ITR-4 should be filed by resident individuals, HUFs, and firms (excluding Limited Liability Partnerships) with a total income of up to Rs. 50 lakh and income from business or profession calculated under sections 44AD, 44ADA, or 44AE of the Income-tax Act, 1961.
How To File ITR-3?
To file ITR-3, taxpayers need to visit the official website of the income tax department, log in to their account, and select ITR-3 form for filing.
The necessary documents for filing ITR-3 include Permanent Account Number (PAN), Aadhaar, bank account details, Form 16 (if applicable), investment details, and books of accounts.
ITR Filing
The ITR forms are used for reporting an individual’s income and corresponding taxes payable to the income tax department during a financial year. It is mandatory for anyone earning more than Rs. 2.5 lakh to file an ITR.
The Central Board of Direct Taxes (CBDT) has introduced seven types of ITR forms, with their applicability based on factors, such as nature of income, income amount, and taxpayer category. It is crucial for individuals to select the correct form based on their specific circumstances.
In the current assessment year (AY 23-24), notable changes have been introduced, including reporting income from crypto and other virtual digital assets, providing the donation reference number for claiming 80G deduction, and reporting turnover from intraday trading.
