ITR 3 applicability: Who can file income tax return using ITR 3 form for FY2023-24

Various forms have been made available for taxpayers to file their income tax returns (ITRs). However, taxpayers should choose the appropriate form based on the guidelines instructed by the Tax Department. A person can file income tax returns using seven primary forms listed in the Income Tax Act 1961: ITR forms 1, 2, 3, 4, 5, 6, and 7. Depending on your income source and taxpayer type, you must select one of these forms when filing income tax returns.

Which ITR form should salaried person use to file income tax return for FY 2023-24 (AY 2024-25)?

The deadline for submitting ITR 3 forms in non-audit cases is July 31 for the relevant assessment year, and October 31 for accounts subject to an audit, if applicable.

What is ITR 3 form?

According to a frequently asked question (FAQ) released by the Income Tax Department, the ITR-3 form is to be used by an individual or a Hindu Undivided Family (HUF) who has income under the head's 'profits or gains of business or profession' and who is not eligible to file Form ITR-1 (Sahaj), ITR-2 or ITR-4 (Sugam).

If a person receives compensation from a partnership firm or an LLP, they may additionally need to file ITR-3 since this type of income is categorized as Income from Business/Profession. Even if they earn income from a business or profession, people who have opted for the presumptive taxation plan must file ITR-4 rather than ITR-3.

Note that profits from trading stock market derivatives (such as options and futures) are classified as business profits, and a tax audit is necessary when specified thresholds are met. Hence taxpayers who have this type of income need to file ITR-3 if they have not chosen the presumptive taxation scheme option.

Who should file ITR3

You must file your tax returns using an ITR 3 if you are an individual taxpayer or a member of a Hindu Undivided Family (HUF) and your business is your source of income.

Who is eligible to file ITR 3 Form?

• Individuals with proprietary business as their source of income
• Individuals whose income source is a profession
• Income by way of interest, salary, bonus, commission or remuneration received by him from a partnership firm.
• If a person is earning from house property, pension or salary, their source of income falls under income from other sources. Such individuals can file returns with ITR 3.
• Non-Resident Individual
• Anybody with income-producing assets situated outside of India.
• In short, any individual earning income under the head “profits or gains from profession or business” who is not eligible to file ITR-1, ITR-2 or ITR-4, has to file Form ITR-3.

Made a mistake in your filed income tax return? Check the revised ITR filing last date, what are the charges

Which ITR form is to be used to report income from VDA?

When you report income from the sale in your ITR of virtual digital assets, cryptocurrencies, NFTs, for taxation purposes, you can use ITR-2 if you report it as capital gains and ITR-3 if you report it as business income. Make sure to include all the necessary details in the "Schedule VDA" in the applicable ITR form.

Who is not eligible to File ITR 3 form?

According to the HDFC Life website, “Form ITR – 3 cannot be used by any person other than an individual or a HUF. Further, an individual or a HUF or partner not having income from business or profession or partnership cannot use ITR – 3.”