What is ITR-3?
ITR-3 is the Income Tax Return form for individuals and Hindu Undivided Families (HUFs) who have income from business or profession. Often referred to as a “master form,” ITR-3 allows individuals or HUFs to report all possible types of income when they have business or professional income. This form is specifically designed for taxpayers engaged in business or profession who are required to maintain books of accounts.
Who is Liable to File ITR-3?
Eligible Taxpayers
The following individuals and entities are required to file ITR-3
Individuals and HUFs with Business/Professional Income:
- Individuals with proprietary business as their source of income
- Individuals whose income source is a profession
- Those earning income under the head “profits and gains of business or profession”
Specific Categories:
- Partners in Partnership Firms: Income by way of interest, salary, bonus, commission or remuneration received from a partnership firm
- Company Directors: Individuals who are directors of companies
- Unlisted Equity Share Holders: Those who had investments in unlisted equity shares at any time during the financial year
- Non-Resident Individuals: Those with residential status as Non-Resident or Resident Not Ordinarily Resident
Additional Income Sources:
- Income from salary or pension
- Income from house property (single or multiple properties)
- Income from capital gains
- Income from other sources
- Income from foreign assets/foreign income
Who Cannot File ITR-3
The following entities are not eligible to file ITR-3:
- Companies
- Trusts
- Limited Liability Partnerships (LLPs)
- Partnership Firms
- Co-operative Societies
- Local Authorities
- Artificial Juridical Persons
- Association of Persons (AOP) and Body of Individuals (BOI)
Note: Individuals with income only from salary, house property, and capital gains without business/professional income should file ITR-1 or ITR-2 instead.
Types of Income Covered Under ITR-3
ITR-3 is comprehensive and covers all heads of income when the taxpayer has business or professional income:
Primary Income Categories
Business and Professional Income:
- Profits and gains from business or profession
- Income from trading activities including F&O trading
- Professional services income
- Income from speculative business
Salary and Pension Income:
- Income from salary or pension
- Employment-related benefits and allowances
House Property Income:
- Income from self-occupied property
- Income from let-out properties
- Income from multiple house properties
Capital Gains:
- Short-term capital gains
- Long-term capital gains
- Capital gains from equity shares (Schedule 112A)
- Capital gains from Virtual Digital Assets (VDA)
Other Sources:
- Interest income
- Dividend income
- Income from other miscellaneous sources
Special Income Categories
Virtual Digital Assets (VDA):
- Income from cryptocurrency transactions
- Gains from virtual digital asset transfers
Partnership Income:
- Remuneration from partnership firms
- Share of profits from partnerships
Structure and Sections of ITR-3 Form
ITR-3 has a detailed structure comprising multiple parts and schedules:
Part A – Financial Statements
Part A-GEN: General details and nature of business/profession
Part A-BS: Balance Sheet as on 31st March for proprietary business or profession
Part A-Manufacturing/Trading/P&L:
Part A-OI: Optional information for non-audit cases
Part A-QD: Optional quantitative details for non-audit cases
Comprehensive Schedule System
Income Schedules:
- Schedule-S: Salary income details
- Schedule-HP: House property income
- Schedule-BP: Business/profession income
- Schedule-CG: Capital gains
- Schedule-112A: Capital gains from equity shares with STT
- Schedule-115AD: Capital gains for non-residents
- Schedule-VDA: Virtual Digital Assets
- Schedule-OS: Other sources of income
Loss and Deduction Schedules:
- Schedule-CYLA: Current year loss adjustment
- Schedule-BFLA: Brought forward loss adjustment
- Schedule-CFL: Carry forward of losses
- Schedule-80G: Donations and charitable contributions
- Schedule-80IA to 80IB: Various business deductions
- Schedule-VI-A: Deductions under Chapter VI-A
Specialized Schedules:
- Schedule-AMT: Alternate Minimum Tax
- Schedule-FSI: Foreign source income
- Schedule-FA: Foreign assets
- Schedule-ESOP: Employee Stock Option Plans
Details and Information Required
Essential Documents for ITR-3 Filing
Basic Documentation:
- PAN (Permanent Account Number)
- Aadhaar Card
- Bank account details (account number and IFSC code)
Income-Related Documents:
- Form 16 (if applicable for salaried individuals)
- Books of accounts for business or professional income
- Balance Sheet and Profit & Loss Account
- Form 26AS – Tax credit statement
- Annual Information Statement (AIS)
Investment and Deduction Proofs:
- Details of investments for Section 80C deductions
- Health insurance premium receipts for Section 80D
- Other tax-saving investment proofs
Business/Professional Information Required
Nature of Business/Profession Codes:
Taxpayers must select appropriate business codes from the updated list. New codes for AY 2025-26 include:
- 09029 – Commission Agents (Kachcha Arahitya)
- 16021 – Social Media Influencers
- 21009 – Speculative Trading
- 21010 – Futures and Options (F&O) Trading
- 21011 – Buying and Selling Shares
Financial Details Required:
- Gross turnover or receipts from business
- Business expenses and deductions
- Depreciation details
- Manufacturing/trading account details
- Cash and digital transaction breakup
Deductions and Tax Computation
Available Deductions (Old Tax Regime):
- Section 80C: Up to ₹1.5 lakh for investments in PPF, ELSS, life insurance, etc.
- Section 80D: Health insurance premium deductions
- Section 80G: Donations to charitable institutions
- Section 80E: Education loan interest
- Section 80CCD(1B): Additional ₹50,000 for NPS investments
Tax Payment Details:
- TDS/TCS Credits: Details of tax deducted/collected at source
- Advance Tax: Quarterly advance tax payments
- Self-Assessment Tax: Additional tax paid
Filing Requirements and Due Dates
Due Dates for ITR-3 Filing
| Category of Taxpayer | Due Date |
| Non-audit cases (individuals/HUFs not requiring audit) | 15th September 2025 |
| Audit cases (businesses requiring audit) | 31st October 2025 |
| Transfer pricing cases (international/domestic transactions) | 30th November 2025 |
| Belated/Revised returns | 31st December 2025 |
Tax Audit Requirements
When Tax Audit is Required:
- Business turnover exceeds ₹1 crore
- Professional receipts exceed ₹50 lakh
- When opting out of presumptive taxation schemes
Audit Report Submission:
- Tax audit reports must be filed one month before the ITR due date
- For audit cases with October 31 ITR deadline, audit reports are due by September 30
Presumptive Taxation Exclusions
Taxpayers opting for presumptive taxation schemes under Sections 44AD, 44ADA, or 44AE should file ITR-4 (Sugam) instead of ITR-3:
- Section 44AD: Business turnover up to ₹2 crore (₹3 crore in special cases)
- Section 44ADA: Professional receipts up to ₹50 lakh (₹75 lakh with 95% digital receipts)
- Section 44AE: Goods carriage business with up to 10 vehicles
Key Updates for AY 2025-26
Recent Changes in ITR-3
Capital Gains Reporting:
- Separate reporting for gains from sales before and on/after 23 July 2024
- Enhanced disclosure requirements for different types of capital assets
Asset Disclosure:
- Threshold raised to ₹1 crore (from ₹50 lakh) for asset disclosure requirements
New Business Codes:
- Addition of codes for modern professions and trading activities
- Better categorization of digital economy participants
Enhanced Compliance:
- Detailed TDS section code reporting requirements
- More granular deduction reporting under various sections
Author Bio
iam a mutual fund distributor with 7 lakhs commission income. how much % i can show as expenses. I do not GStin .