To file your income tax return, you need to choose a form notified by the government for the financial year. At present we have 7 different income tax return forms are notified by the government for the previous year 2023-24 (assessment year 2024-25).
For the financial year 2024-25 (assessment year 2025-26), income tax forms are not yet notified. Most probably, it will be notified by the beginning of the assessment year 2025-26.
Income tax return forms are basically drafted to take all the relevant details like income under different heads, exemptions and deductions claimed, tax deducted (TDS), TCS, self-assessment and advance tax paid etc to calculate tax liability for the year.
Different incomes, exemptions, tax deductions, expenses will have different ways of calculation. Therefore, based on type of income, person and other details, different income tax forms are notified.
If you don’t select the right income tax return form for the financial year, then most probably, your return will be treated as defective. Which means, it will be considered as if the IT return is not filed if you do not rectify the mistakes.
What is the income tax return form ITR-3?
Income tax return form ITR-3 is specifically notified for those individuals who are a salaried individual and also have income from business or profession. Even a self-employed person with income from business or profession can file ITR-3.
Income tax return form ITR-1 and ITR-2 are not applicable in case of an individual who has income from business or profession in addition to salary. In this case, an individual has two choices. Either go for an income tax return form ITR-3 or ITR-4.
Form ITR-4 should be selected if you have opted to go for presumptive taxation scheme under section 44AD, Section 44ADA, and Section 44AE. In case presumptive taxation scheme is not applicable or you don’t want to opt for it, then the only choice left out is ITR-3.
Please note, ITR-5, ITR-6 and ITR-7 is not applicable to an individual.
ITR-3 is a very big Income Tax Return form compared to ITR-2 and ITR-1 as you need to file your business or profession details to arrive at profit. However, you don’t have any option left out, if this form ITR-3 is applicable, then you need to file it with all the details.
When income tax return form ITR-3 is not required to be filed?
As per current law, if your total income before allowing tax deduction under chapter VI-A is below the maximum limit chargeable to tax, then you need not file your income tax return for the financial year. This threshold limit is also known as the basic exemption limit.
Which means, if your salary income and profits from business or profession is less than the maximum amount chargeable to tax for the financial year, then you are not required to file income tax return.
However, you can voluntarily file your income tax return even if you have zero tax liability, which is also referred to as NIL return.
In case you have decided to file your income tax return under any section of the presumptive taxation scheme, then we suggest to go for form ITR-4, which is a very simple form.
If you don’t have business income for the financial year, then don’t even think about ITR-3 and ITR-4. Check out the applicability of ITR-1 and ITR-2.
Please note, whichever form is applicable, you need to file your income tax return before the due date of filing. If you missed it due to some unavoidable reason then don’t forget to file it on or before 31st December of the relevant assessment year, which is also known as the last date of filing.
For instance, for the financial year 2023-24 (assessment year 2024-25), your due date of filing was 31st July 2024. If you have not filed your tax return on or before 31st July 2024, then make sure that you file it before 31st December 2024 by paying late fee as applicable based on your income.
