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Introduction of ITR-3

ITR-3 is one of the many income tax return forms used in India for filing income tax returns. It is primarily designed for individuals and Hindu Undivided Families (HUFs) who have income from a business or profession and do not have income from other sources that require separate ITR forms. This form allows taxpayers to report their income, deductions, and tax liability accurately.Visitofficialwebsite

Eligibility Criteria for ITR-3

To utilize ITR-3, you must meet specific eligibility criteria. Eligible taxpayers include:

  • Individuals and HUFs who have income from a business or profession.
  • Individuals and HUFs who are partners in a firm but not carrying out business or profession under any proprietorship.
  • Professionals such as doctors, lawyers, architects, and others.
  • Taxpayers who maintain regular books of accounts.

Understanding Income from Business or Profession

Income from business or profession, as indicated in ITR-3, encompasses various sources of earnings, including:

  • Profit or loss from a sole proprietorship or partnership business.
  • Income from freelancing or consulting services.
  • Earnings from practicing a profession.
  • Income from commission, brokerage, or any agency business.
  • Rental income from properties used for business or profession.
  • Gains or losses from trading in stocks and shares.
  • Income from speculation and other activities.

It is essential to maintain accurate and up-to-date records of income and expenses related to your business or profession to fill ITR-3 correctly.

Preparation for Filing ITR-3

Before proceeding with the filing process, you should gather the necessary documents and information. These may include:

  • PAN (Permanent Account Number).
  • Details of business income, including profit and loss statements.
  • Bank statements showing all transactions related to your business.
  • Details of deductions and exemptions you wish to claim.
  • Information about any tax deducted at source (TDS) or advance tax payments.
  • Any other financial documentation related to your business or profession.

Step-by-Step Guide to Filling ITR-3

Let’s explore the step-by-step process for filling out ITR-3:

Step 1: Personal Information

  • Provide your personal information, including your name, PAN, Aadhaar number, and contact details.
  • Select the appropriate assessment year.
  • Choose your residential status (resident, non-resident, or not ordinarily resident).
  • Mention the date of birth and occupation.
  • Furnish your bank account details, including the bank name, branch, and account type.

Step 2: Computation of Total Income

  • Report your income from business or profession, including gross receipts, business income, and profession income.
  • Deduct any allowable business expenses, such as rent, employee salaries, utilities, and depreciation.
  • Calculate the total income from business or profession.
  • Include any income from other sources, such as capital gains or income from house property.
  • Calculate the gross total income by adding income from business and other sources.
  • Consider any deductions available under various sections of the Income Tax Act, such as Section 80C, Section 80D, or Section 10(14).
  • Compute the total taxable income.

Step 3: Deductions and Taxable Income

  • List any deductions and exemptions you are eligible for, including those related to savings, investments, and expenses.
  • Calculate the net taxable income after applying deductions and exemptions.

Step 4: Tax Computation and Payment

  • Calculate your tax liability based on the applicable tax slab.
  • Deduct any TDS (Tax Deducted at Source) or advance tax paid.
  • Determine the balance tax payable or refundable.

Step 5: Verification and Submission

  • Choose the appropriate verification method, such as submitting the ITR-V form, using Aadhaar OTP, or digitally signing the return.
  • Sign and date the return.
  • Verify your submission and receive an acknowledgment.

Filing Deadline for ITR-3

Taxpayers in India must file their ITR-3 forms by the specified due date, which is typically July 31st of the assessment year. However, the due date may change, so it’s crucial to check the current deadline each year.

What is the difference between ITR 3 and ITR 4 forms

ITR 3 and ITR 4 are forms used for filing income tax returns in India. They are part of the Income Tax Return (ITR) forms prescribed by the Central Board of Direct Taxes (CBDT), which is the governing body for taxation in India.

1. ITR 3 Form

ITR 3 is the income tax return form used by individuals and Hindu Undivided Families (HUFs) who have income from profits and gains of business or profession. It is applicable to individuals and HUFs who are partners in a partnership firm but do not have income from a proprietary business or profession. ITR 3 is not applicable to individuals who have income from salary, house property, or capital gains.

2. ITR 4 Form

ITR 4 is the income tax return form used by individuals, HUFs, and firms (other than LLP) who have opted for the presumptive taxation scheme under Section 44AD, Section 44ADA, or Section 44AE of the Income Tax Act. This form is applicable to individuals and HUFs having income from a business or profession calculated on a presumptive basis. It is also applicable to individuals who have income from salary, house property, or other sources. However, it is not applicable to individuals who have income from capital gains.

Both ITR 3 and ITR 4 forms require individuals and entities to provide details of their income, deductions, taxes paid, and other relevant information to compute their taxable income and the tax liability for a particular financial year. It is important to carefully fill out these forms, ensuring accuracy and compliance with the Income Tax Act and relevant regulations.

Which ITR form should be filed for a farmer only

Agriculture income are exempt but you really want to file your income tax return and you have also earning some other than farming.

ITR 3 will be applicable.

As per section 10(1), agricultural income earned by the taxpayer in India is exempt from tax.
Agricultural income is defined under section 2(1A) of the Income-tax Act. As per section 2(1A),
agricultural income generally means:

(a) Any rent or revenue derived from land which is situated in India and is used for
agricultural purposes.

(b) Any income derived from such land by agriculture operations including processing of
agricultural produce so as to render it fit for the market or sale of such produce.

(c) Any income attributable to a farm house subject to satisfaction of certain conditions
specified in this regard in section 2(1A).
Any income derived

Is it mandatory to file ITR of individual if annual income is less than 5 lakh

Yes, it is mandatory to file Income tax Return for a person having income upto 5 Lakh. Earlier an exemption was available from filling of ITR to people having only savings interest income and salary income aggregating upto INR 5 Lakhs, provided TDS was deducted on such income.

However, this exemption has been withdrawn wef Budget 2013.

Following people are required to file their ITRs mandatorily –

  • Individuals aged upto 59 years having income more than 2.5Lakhs
  • Individuals in age range of 60 to 80 years having income more than 3 Lakhs
  • Individuals aged more than 80 years having income more than 5 Lakhs
  • Further, even if your taxable income in less than limits mentioned below, but you have carry forward losses or long term capital gains. You are mandatorily required to file your ITR.

Hope the above suffices.

Do I need to file an ITR if my income is less than Rs. 60,000 per annum? I am a student.

As per the provisions section 139(1) of Income Tax Act, 1961 as long as your total income under all five heads of income, subject to deduction of applicable investments / payments under chapter VA (section 80C to 80U) does not exceed the threshold limit you need file your ITR.

But the matter doesn’t end here, if you have full filled any of following conditions as laid down in 7th proviso to section 139(1) you are destined to file ITR.,

  1. You have spent an aggregate of Rs. 2.00 lacs or more on a foreign travel.
  2. If you have spent a sum of Rs. 1.00 lac or more on Electricity bill in the financial year.
  3. If you deposits aggregating to more than Rs. 1.00 crore in a bank account
  4. If you have any foreign assets during the financial year.


i. If you have excess taxes paid to be refunded

ii. If you have losses to be carried forward to set off against future profits.

iii. In case of any immigration / visa issues there may be condition of ITR Filing.

Still if you don’t fall under any of the conditions as above you need to worry about filing ITR.


Common Errors and Mistakes to Avoid

When filling out ITR-3, it’s essential to be meticulous and avoid common errors to prevent complications and rejections. Common mistakes include:

  • Incorrect PAN or Aadhaar details.
  • Inaccurate computation of income and expenses.
  • Failure to claim eligible deductions and exemptions.
  • Math errors in tax calculations.
  • Missing the filing deadline.

Conclusion of utilize itr

Filing an ITR-3 is a crucial step in fulfilling your tax obligations if you have income from a business or profession in India. Understanding the eligibility criteria, income sources, and the step-by-step process for filling ITR-3 is essential to ensure accurate and timely filing. By following the guidelines outlined in this guide and maintaining organized financial records, you can effectively utilize ITR-3 to report your income and tax liability. Always stay informed about the latest tax laws and deadlines to ensure compliance with the Income Tax Act in India.

ITR-3 is one of the many income tax return forms used in India for filing income tax returns. It is primarily designed for individuals and Hindu Undivided Families (HUFs) who have income from a business or profession and do not have income from other sources that require separate ITR forms. This form allows taxpayers to report their income, deductions, and tax liability accurately.Visitofficialwebsite

how auriga accounting help you to utilized ITR. 3

Auriga Accounting can be a valuable tool to help individuals and businesses prepare and utilize ITR-3 effectively. Here’s how Auriga Accounting can assist in the process:

  1. Data Entry and Accuracy:

    • Auriga Accounting provides a user-friendly platform for entering and organizing financial data, which is crucial for accurately filling out ITR-3.
    • It offers validation checks to minimize errors, ensuring that data entry is accurate and complies with tax regulations.
  2. Income and Expense Tracking:

    • The software allows you to track your income from various sources, including business income and profession income, making it easier to report this information on ITR-3.
    • You can categorize and record business expenses, ensuring that you claim all eligible deductions and exemptions while preparing your tax return.
  3. Record-keeping:

    • Auriga Accounting maintains detailed records of financial transactions, providing an organized history of income, expenses, and other financial activities.
    • These records are invaluable when filling out ITR-3 and may be needed to substantiate the information you report.
  4. Tax Calculation:

    • The software can automatically calculate your tax liability based on the data you input, streamlining the process and reducing the risk of mathematical errors.
    • It considers deductions, exemptions, and tax slabs to provide an accurate tax computation.
  5. Deduction and Exemption Tracking:

    • Auriga Accounting often includes features to track deductions and exemptions available under the Indian Income Tax Act. This can help ensure you don’t miss out on any tax-saving opportunities.
    • It can provide recommendations for deductions you might be eligible for based on your financial data.
  6. Form Generation:

    • Auriga Accounting can generate the necessary tax forms, including ITR-3, with the data you’ve entered. This simplifies the process of filling out the form and ensures that it is correctly formatted according to tax regulations.
  7. E-Filing Integration:

    • Many accounting software solutions, including Auriga Accounting, offer integration with e-filing services. This allows you to directly submit your completed ITR-3 electronically to the tax authorities.
    • E-filing typically reduces the risk of errors and expedites the filing process.
  8. Data Security:

    • Auriga Accounting often employs robust security measures to protect your financial data, which is essential when dealing with sensitive tax information.
    • Your data is typically encrypted and stored securely to prevent unauthorized access.
  9. Real-time Updates:

    • The software is often updated with the latest tax rules and regulations, ensuring that you remain in compliance with tax laws when utilizing ITR-3.
    • You can stay informed about changes in tax laws that may affect your tax return.
  10. Audit Trail:

    • Auriga Accounting keeps a detailed audit trail, allowing you to trace changes made to your financial data. This is valuable in case you need to verify or amend your ITR-3 filing.
  11. Professional Assistance:

    • Some accounting software solutions offer customer support or access to tax professionals who can assist you with ITR-3 preparation and filing.
    • You can seek expert guidance if you have complex financial situations or need assistance with your tax return.
  12. Regular Backups:

    • Data backup features are often included in accounting software. This ensures that your financial information is safe and retrievable in case of technical issues or data loss.