ITR-3 Form: How to File ITR-3 Online

The ITR-3 Form is the go-to income tax return form for individuals and Hindu Undivided Families (HUFs) in India who earn income from business or profession, including those with income from proprietary business, multiple house properties, capital gains, and other sources. For Assessment Year 2025-26 (FY 2024-25), the Income Tax Department has introduced several key changes, making it crucial for taxpayers to stay updated and file accurately to avoid penalties and maximize deductions.

Also Read-ITR-6 Form: Step-by-Step Guide, Due Dates, and Latest Updates for AY 2025-26

If you are an entrepreneur, freelancer, professional (like a doctor, CA, or lawyer), or run a proprietary business, the ITR-3 is your primary compliance tool. The form requires detailed disclosures, from business profits to capital gains, and now includes enhanced reporting for deductions, TDS, and asset thresholds. With the latest updates, accurate and timely filing is more important than ever for Indian taxpayers.

What’s New in ITR-3 for AY 2025-26?

The Central Board of Direct Taxes (CBDT) has recently notified all seven Income Tax Return forms for AY 2025-26, incorporating significant updates that taxpayers must be aware of:

1. Capital Gains Reporting Simplified:

• Taxpayers must now report capital gains separately for transactions before and after July 23, 2024
• This change aligns with the Finance Act 2024’s revised long-term capital gains tax rules
• Listed shares sold after July 23, 2024, will be taxed at 12.5% instead of the earlier 20%

2. Buyback Loss Reporting:

• From October 1, 2024, losses on share buybacks are allowed only if the corresponding dividend is reported as “Income from Other Sources”
• Capital loss on buyback of shares must be disclosed accordingly if dividend income under Section 2(22)(f) is reported

3. Asset Disclosure Threshold Raised:

• The threshold for reporting assets and liabilities has been increased to ₹1 crore of total income, up from the previous ₹50 lakh limit
• This change reduces compliance burden for many taxpayers

4. New Section 44BBC:

• A new presumptive taxation scheme for cruise business operators has been added
• This section is now included for disclosure under income from business or profession

5. Enhanced Deduction Reporting:

• More detailed fields have been added to sections like 80C, 80E, 80EE, 24(b), and 10(13A)
• Taxpayers must provide supporting details such as policy numbers, loan account numbers, and HRA particulars

6. Mandatory TDS Section Code:

• The updated form now requires taxpayers to specify the section under which TDS has been deducted
• This ensures greater clarity and validation of TDS claims

7. Mandatory Reporting of Tax Regime Choice:

• Taxpayers choosing the new tax regime must file Form 10-IE or 10-IEA and provide its filing details in ITR-3

Who Can File ITR-3?

ITR-3 is specifically designed for:

• Individuals and HUFs earning income from business or profession (proprietorship)
• Those with income from more than one house property
• Individuals with capital gains (short-term or long-term)
• Those earning from sources like lotteries, horse racing, or other “income from other sources”
• Taxpayers with income from foreign assets or outside India

Who Cannot File ITR-3?

• Individuals and HUFs eligible for ITR-1, ITR-2, or ITR-4
• Firms, LLPs, companies, and trusts

What is the Structure of the ITR-3 Form?

ITR-3 comprises the following sections:

Part A

• Part A-GEN: General details and Nature of Business
• Part A-BS: Balance Sheet as of March 31, for the Proprietary Business or Profession
• Part A-Manufacturing Account: Manufacturing Account for the financial year
• Part A-Trading Account: Trading Account for the financial year
• Part A-P&L: Profit and Loss for the Financial Year
• Part A-OI: Optional Other Information (if not subject to audit under Section 44AB)
• Part A-QD: Optional Quantitative Details (if not subject to audit under Section 44AB)

Schedules

• Schedule-S: Calculation of income from Salaries
• Schedule-HP: Calculation of income from House Property
• Schedule BP: Calculation of income from business or profession
• Schedule-DPM: Depreciation computation on plant and machinery under the Income-tax Act
• Schedule DOA: Depreciation computation on other assets under the Income-tax Act
• Schedule DEP: Summary of depreciation on all assets under the Income-tax Act
• Schedule DCG: Computation of deemed capital gains on the sale of depreciable assets
• Schedule ESR: Deductions under section 35 (expenditure on scientific research)
• Schedule-CG: Calculation of income from Capital gains
• Schedule 112A: Details of Capital Gains where section 112A applies
• Schedule 115AD(1)(b)(iii)Proviso: Details of Capital Gains for Non-Residents where section 112A applies
• Schedule-OS: Calculation of income from Other sources
• Schedule-CYLA-BFLA: Statement of income after set-off of current year’s losses and unabsorbed loss brought forward
• Schedule-CYLA: Statement of income after set-off of current year’s losses
• Schedule BFLA: Statement of income after set-off of unabsorbed loss brought forward
• Schedule CFL: Statement of losses to be carried forward to future years
• Schedule- UD: Statement of unabsorbed depreciation
• Schedule ICDS: Effect of Income Computation Disclosure Standards on Profit
• Schedule- 10AA: Deduction computation under section 10AA
• Schedule 80G: Statement of donations eligible for deduction under section 80G
• Schedule RA: Statement of donations entitled for deduction under specific sections
• Schedule- 80IA: Deduction computation under section 80IA
• Schedule- 80IB: Deduction computation under section 80IB
• Schedule- 80IC/ 80-IE: Deduction computation under section 80IC/ 80-IE
• Schedule VI-A: Statement of deductions under Chapter VIA
• Schedule AMT: Computation of Alternate Minimum Tax under Section 115JC
• Schedule AMTC: Computation of tax credit under section 115JD
• Schedule SPI: Statement of income for spouse/minor child/son’s wife or others to be included in the assessee’s income
• Schedule SI: Statement of income taxable at special rates
• Schedule-IF: Information regarding partnership firms where the assessee is a partner
• Schedule EI: Statement of income not included in total income (exempt incomes)
• Schedule PTI: Pass-through income details from business trust or investment fund as per section 115UA, 115UB
• Schedule TPSA: Secondary adjustment to transfer price as per section 92CE(2A)
• Schedule FSI: Details of income from outside India and tax relief
• Schedule TR: Statement of tax relief claimed under specific sections
• Schedule FA: Statement of Foreign Assets and income from sources outside India
• Schedule 5A: Information regarding income apportionment between spouses governed by the Portuguese Civil Code
• Schedule AL: Asset and Liability at the end of the year (if total income exceeds ₹1 crore)
• Schedule GST: Information regarding turnover/Gross receipt reported for GST
• Schedule VDA: Details of income from the transfer of virtual digital assets

Part B

• Part B-TI: Computation of Total Income
• Part B-TTI: Computation of tax liability on total income
• Verification

Step-by-Step Guide: How to File ITR-3 Online

1. Preparation:
Gather all necessary documents including:

• PAN and Aadhaar
• Bank account details
• Form 16 (if applicable)
• Business income statements
• Investment proofs
• Form 26AS for TDS verification

2. Login:
Visit the Income Tax e-filing portal and log in with your PAN and password.

3. Select Form:
Go to ‘e-File’ > ‘Income Tax Forms‘ > Select Assessment Year 2025-26 > Choose ‘ITR-3.

4. Choose Filing Mode:

• Online: Fill the form directly on the portal
• Offline: Download the form, fill it, and upload the XML file

5. Fill Details:

• Review pre-filled data
• Enter business/profession income
• Input salary, house property, capital gains, and other income details
• Claim deductions with supporting details
• Report taxes paid and TDS with section codes

6. Validate and Calculate:
Use the ‘Calculate Tax’ feature to check your liability or refund amount.

7. Submit and Verify:
Choose a verification method:

• Aadhaar OTP
• Digital Signature Certificate (DSC)
• Electronic Verification Code (EVC)

8. Keep Records:
Download and save the acknowledgment for future reference.

Key Deadlines for ITR-3 Filing (AY 2025-26)

Missing these deadlines can result in late fees and interest penalties.

Pro Tips for Hassle-Free ITR-3 Filing.

• Double-check TDS details using Form 26AS to avoid mismatches
• Keep all supporting documents ready for deductions and claims
• Stay updated with the latest changes and consult a tax expert for complex cases
• File on time to avoid penalties and ensure faster refunds
• Pay special attention to the new capital gains reporting requirements
• Ensure accurate disclosure of business income and expenses

Frequently Asked Questions (FAQ) on ITR-3

Q1. Who is required to file ITR-3?
Individuals and HUFs with income from business or profession (proprietorship), multiple house properties, or capital gains must file ITR-3.

Q2. What is the difference between ITR-3 and ITR-4?
ITR-3 is for those with income from business/profession not under presumptive taxation, while ITR-4 is for those opting for the presumptive scheme and with total income up to ₹50 lakh.

Q3. What documents are needed for ITR-3?
PAN, Aadhaar, bank statements, Form 16, business income statements, investment proofs, and Form 26AS.

Q4. Can I file ITR-3 without a CA?
Yes, if your accounts do not require an audit. However, professional help is advised for complex cases.

Q5. What are the new changes in ITR-3 for 2025?
Split capital gains reporting, buyback loss disclosure, higher asset threshold, new cruise business section, detailed deduction/TDS reporting.

Q6. What is the penalty for late filing?
Late filing attracts a penalty of up to ₹5,000 and interest on tax due. Filing after December 31 may result in higher penalties and loss of certain deductions.

Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. The details provided are based on the latest available information as of May 15, 2025. Tax laws and procedures may change. Readers are advised to consult a qualified tax consultant or refer to official government notifications before making any tax-related decisions. The author and publisher are not responsible for any errors or omissions or for any actions taken based on this information.

C.K. Gupta

Hello, I am C.K. Gupta Founder of Taxgst.in, a seasoned finance professional with a Master of Commerce degree and over 20 years of experience in accounting and finance. My extensive career has been dedicated to mastering the intricacies of financial management, tax consultancy, and strategic planning. Throughout my professional journey, I have honed my skills in financial analysis, tax planning, and compliance, ensuring that all practices adhere to the latest financial regulations. My expertise also extends to auditing, where I focus on maintaining accuracy and integrity in financial reporting. I am passionate about using my knowledge to provide insightful and reliable financial advice, helping businesses optimize their financial strategies and achieve their economic goals. At Taxgst.in, I aim to share valuable insights that assist our readers in navigating the complex world of taxes and finance with ease.