ITR · Glossary
ITR-3
Income tax return form for taxpayers with business/profession income who do not use presumptive taxation.
ITR-3, notified under Rule 12 of the Income Tax Rules, 1962, is the comprehensive form for individuals/HUFs with business or profession income — used when you opt out of 44ADA, have capital gains, foreign income, multiple properties, or are a company director. It includes 30+ schedules covering every income source.
Deadline: 31 July if not subject to audit; 31 October if subject to audit. Requires audited books of accounts under Section 44AB of the Income Tax Act, 1961 if turnover crosses Rs. 1 crore (business) or Rs. 50 lakh (profession).
Worked example
A freelancer with Rs. 35L gross receipts but Rs. 30L genuine expenses (rent, salaries, software) uses ITR-3 + actual books to declare Rs. 5L profit — pays Rs. 0 tax under new regime. Under 44ADA they’d show Rs. 17.5L deemed profit and pay tax on the gap.
Practitioner tip
If your real expense ratio is above 50%, ITR-3 + actual accounting saves more tax than the 44ADA shortcut — but you owe the books, audit (above the threshold), and the 5-year lock-out on re-entering 44ADA.
Related glossary terms
- ITR-4 (Sugam) — Income tax return form for individuals on presumptive taxation (44AD/44ADA/44AE).
- Section 44ADA — Presumptive taxation scheme for specified professionals — 50% of gross receipts is deemed profit.
More in ITR
These definitions are educational. Tax laws change annually — verify with a Chartered Accountant before making GST or income-tax decisions.