ITR · Glossary
ITR-3
Income tax return form for taxpayers with business/profession income who do not use presumptive taxation.
Updated 2026-10-08Source: Income-tax Act · CGST Act · CBDT/CBIC
What it means
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 beyond the small listed-equity LTCG ITR-4 allows, foreign assets or foreign-source income, more than two house properties, or are a company director. It includes 30+ schedules covering every income source.
Deadline: 31 August after the year ends if your accounts are not audited; 31 October if they are audited (30 November in transfer-pricing cases) — Finance Act 2026, applying to FY 2025-26 and tax year 2026-27. A tax audit (Section 44AB of the 1961 Act; s.63 of the Income-tax Act 2025 from tax year 2026-27) is required once gross receipts from a profession exceed Rs. 50 lakh, or business turnover exceeds Rs. 1 crore (Rs. 10 crore where cash receipts and cash payments are each within 5% of the total); declaring profit below the presumptive rate can also require one. Rs. 75 lakh is the higher 44ADA eligibility ceiling (cash receipts within 5%), not an audit limit.
A 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.
If your real expense ratio is above 50%, ITR-3 + actual accounting saves more tax than the 44ADA shortcut — but you owe the books and, above the threshold, the audit. There is no lock-out on returning to 44ADA the next year (the five-year bar is Section 44AD(4), for businesses).
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- All 28 terms — the full glossary, by category.
Income-tax entries cite the Income-tax Act 1961, which governs FY 2025–26 (the return filed in 2026); from tax year 2026–27 the Income-tax Act 2025 applies, with new section numbers shown where we give them. GST law is unchanged. General information, not tax advice; verify with your CA before you file.
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