ITR Filing For Business Owners: ITR 3

Published On: Aug 2, 2023Last Updated: Aug 4, 20235 min read

The income tax department provides different prescribed formats for furnishing returns for incomes earned through varied sources. Hence, the income tax form applicable to most proprietorship business owners or professionals is ITR 3 form. Additionally, this form is applicable for ITR filing of income earned by individuals or HUFs earning income from a business or profession. However, there are a lot of aspects involved with the entire process of figuring out ITR 3 and its applicability. Besides, Through this article you can understand what is ITR 3 and the situations under which you need to file returns. 

What is ITR 3? 

ITR 3 is a form that facilitates furnishing income tax returns for a certain sect of individuals and business owners. Even the Hindu Undivided Families (HUF) earning their income from business also need to file their returns through the ITR 3. Besides, there are other 6 ITR related forms applicable to persons earning their incomes from other various sources. Such as, ITR 1 for salaried employees, ITR 4 for business owners claiming benefits of the presumptive taxation scheme and more. Before you file your returns, it is very important to understand the correct form applicable to you. 

What is the eligibility criteria for ITR 3? 

The following individuals and entities are entitled to furnish their returns through ITR 3: 

  • Firstly, individuals earning income from sole proprietorship business; 
  • Professionals earning their income from providing professional services; 
  • Income from one or more than one house property; 
  • Other income from sources, such as salaries, pension, gratuity, and more; and
  • Lastly, small business not falling under the presumptive taxation scheme. 

Who cannot file ITR  3?

All other types of entities and individuals who do not fall under either of the above categories cannot file income tax returns in ITR 7. These persons include: 

  • Trusts, religious institutions; etc.
  • Companies;
  • Research centers; 
  • Partnership firms; 
  • Individual earning profit from being a partner; 
  • Business falling under the presumptive taxation system; and 
  • Lastly, HUF acting as a partner in a partnership firm. 

Point to remember: For businesses’ that fall under the presumptive taxation scheme, ITR 4 is applicable. 

What is ITR 3 format? 

All income tax return forms come with a prescribed format. As a result, taxpayers need to file their returns in the format as suggested by the authorities. Further, the form ITR 3 is divided into three different parts: 

Part A

While filing the ITR 3, certain information in the part A of online ITR is auto populated on the basis of information you provide. Further, this part of the ITR 3 includes the generic details of the business owner or the professional. So, let’s take a look at the sub-parts of ITR 3: 

  • Firstly, General Information;
  • Secondly, Balance Sheet information; 
  • Thirdly, Details of Manufacturing Account; 
  • Fourthly, Credits to Trading Account;
  • Then, Quantitative Details; and
  • Lastly, Other information. 

Part B

This is the last part of the ITR 3 form. Once you furnish the information as required under Part B, you will be able to see your final tax liability. Besides, there are two sub-parts to this, as follows:

  • Computation of Total Income; and
  • Total tax liability on the income. 

Also Read: How to file ITR online?

Schedule to ITR 3

Schedule Information
SFirstly, details of Income from Salary
HPIncome from House Property
BPIncome from business or profession
DPMDepreciation on Plant and Machinery (Other than assets on which full capital expenditure is allowable as deduction under any other section) 
DOADepreciation on other assets (Other than assets on which full capital expenditure is allowable as deduction) 
DEPSummary of depreciation on assets (Other than assets on which full capital expenditure is allowable as deduction under any other section) 
DCGDeemed Capital Gains on sale of depreciable assets
ESRExpenditure on Scientific Research etc. 
CGCapital Gains
115AD(1)(b)(iii) provisoFor NON-RESIDENTS – From sale of equity share in a company
VDATransfer of virtual digital assets
CYLAIncome after set-off of current years losses
BFLABrought Forward Losses of earlier years
CFLLosses to be carried forward to future years
UDUnabsorbed depreciation and allowance under section 35(4)
ICDSIncome Computation Disclosure Standards on profit
10AADeduction under section 10AA 
80 GDetails of donations under section 80G
80GGA Donations for scientific research or rural development
RADonations to research associations etc. 
80-IAProfits of an undertaking
80-IBDeductions under 80-IB
80-IC or 80-IEUnder 80-IC or 80-IE
VI-ADeductions under Chapter VI-A 
AMTAlternate Minimum Tax payable under section 115JC  
AMTCTax credit under section 115JD
SISpecial Rate of Taxation
IFInformation regarding partnership firms in which you are partner 
EIExempt Income
PTIPass Through Income details from business trust or investment fund
FSIIncome from outside India and tax relief
TRTax relief claimed for taxes paid outside India (available only in case of resident) 
FAForeign Assets and Income from any source outside India 
5AApportionment of income between spouses governed by Portuguese Civil Code

How to file ITR 3? 

You can submit the ITR 3 for business owners and professionals in two modes. So, let’s take a look at the two modes:

  • Online Mode: by furnishing all information and computing taxes electronically through the tax e-filing portal; and 
  • Offline mode: you can furnish your statements in the paper format and submit it by transferring data electronically to the portal. 

What is the deadline to submit ITR 3? 

It is very important to file income tax returns before the deadline. Besides, the due date for filing income tax returns through ITR 3 is:

  • 31st July for non – audit cases; and 
  • Then, 31st October for audit cases. 


The ITR 3 form is one of the simpler forms related to furnishing a statement of income and expenses. If you fail to furnish your ITR 3 before the deadline, you can still file your updated income tax returns (ITR U). However, this is not possible in all cases. Hence, it is very important that you file the appropriate ITR for your income sources. So, get help in filing ITR online with experts. So don’t forget, we are just one click away!

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Diksha Shastri
About the Author

Diksha Shastri

As a writer, Diksha aims to make complex legal subjects easier to comprehend for all. As a Lawyer, she assists startups with their legal and IPR drafting requirements. To understand and further spread awareness about the startup ecosystem is her motto.

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