The current ITR-3 Form is to be used by an individual or a Hindu Undivided Family who have income from a proprietary business or is carrying on a profession. The persons having income from the following sources are eligible to file ITR-3:

  • Carrying on a business or profession
  • If you are an Individual Director in a company
  • If you have had investments in unlisted equity shares at any time during the financial year
  • The return may include income from House property, Salary/Pension and Income from other sources
  • Income of a person as a partner in the firm

Who can file ITR-3 Form?

  • Carrying on a business or profession (both tax audit and non-audit cases)
  • The return may include income from house property, salary/pension, capital gains and income from other sources.

Who are not eligible to file ITR-3?

  • Individuals who file Form ITR‐1 (Sahaj), ITR‐2 or ITR‐4 (Sugam), are not eligible to file ITR-3.
  • Income earned from foreign assets.

Major Changes in ITR 3 form for AY 2023-24

Below changes are incorporated in the ITR-3 form of the FY 2022-23:

  • A new schedule VDA has been added to separately report your income from crypto/ other VDAs. If you treat income from VDAs as capital gains, a quarterly breakup will need to be given under the Capital Gains Schedule. In the new ITR-3 every VDA transaction will have to be reported along with the dates of sale and purchase.
  • A few questions have been added in the new ITR 3 form to determine if you had opted out of the New Tax Regime in previous years.
  • Foreign institutional investors (FII/FPI) must provide their SEBI registration number as an additional disclosure measure.
  • There has been a small change in balance sheet reporting. According to the new ITR-3 form, advances received from individuals specified in Sec 40A(2)(b) of the Income Tax Act and others must be reported under the ‘Advances’ heading in Source of Funds.
  • Turnover and income from intraday trading must be reported under the newly introduced section ‘Trading Account’.

In short, individuals or HUFs who are not eligible to file ITR-1, ITR-2, and ITR-4, should file ITR-3

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