ITR-3 Online Filing is Live: Streamline Your Business & Professional Income Tax for AY 2025-26!

Great news for individuals and HUFs with business or professional income! The Income Tax Department has now opened ITR-3 for online filing directly on the e-filing portal for the Assessment Year 2025-26. This change simplifies the tax filing process, making it easier for many taxpayers to meet their obligations.

What is ITR-3?

ITR-3 is the Income Tax Return form designed for Individuals and Hindu Undivided Families (HUFs) with income from "Profits and Gains of Business or Profession." This form is detailed and can also be used by those with other income sources, making it important for a wide range of taxpayers.

Who typically files ITR-3?

• Business Owners: Individuals running their own businesses, including freelancers and consultants.
• Professionals: Self-employed individuals like doctors, lawyers, architects, and chartered accountants.
• Partners in Firms: Individuals who are partners in a partnership firm and receive income as interest, salary, bonus, commission, or remuneration from the firm. (Note: If a partner only has income from profit share, which is exempt, they might still need to file ITR-3 if they have other income sources requiring it, or ITR-2 if there is no business income.)
• Individuals with income from Derivatives Trading: Those involved in Futures & Options (F&O) trading or intra-day trading.
• Individuals with income from Unlisted Equity Shares: If you held unlisted equity shares at any point during the financial year.
• Individuals with income from transactions of Digital Assets: If you have profits from cryptocurrency or other virtual assets.
• Individuals with multiple income sources: If you have business income along with salary, income from house property, capital gains, or other sources.

Important Note: If you qualify for the presumptive taxation scheme under Section 44AD, 44ADA, or 44AE and choose it, you might need to file ITR-4 (Sugam) instead of ITR-3. Always check your eligibility before selecting the ITR form.

Why is Online Filing for ITR-3 Significant?

The introduction of online filing for ITR-3 is a positive change for several reasons:

• Ease of Access: Taxpayers can fill and submit their returns directly on the e-filing portal without needing to download offline tools. This offers more flexibility and convenience.
• Pre-filled Data: The online filing often includes pre-filled information (like salary, TDS, etc.), which reduces manual entry errors and simplifies the process.
• Real-time Validation: The online portal quickly checks for errors, helping taxpayers correct issues as they file, thus lowering the chance of submitting a faulty return.
• Reduced Dependency on Software: While offline tools are useful, the online option allows taxpayers to file from any device with internet access without needing specific software.
• Faster Processing: Returns submitted online are usually processed quicker, leading to faster refunds if applicable.

Key Updates and Points to Remember for AY 2025-26 (FY 2024-25):

The ITR-3 form for AY 2025-26 includes several updates that taxpayers should know about:

• Increased AL (Assets and Liabilities) Reporting Limit: The limit for reporting assets and liabilities in Schedule AL has increased. Individuals and HUFs must now provide details of specified Assets & Liabilities only if their total income for FY 2024-25 (AY 2025-26) exceeds ₹1 crore. This change eases the filing process for many taxpayers whose income is between ₹50 lakh and ₹1 crore.
• Schedules for Digital Assets: A specific Schedule VDA is included for reporting income from Virtual Digital Assets (VDAs) like cryptocurrencies.
• Detailed Capital Gains Reporting: More detailed reporting may be needed for different types of capital gains.
• TDS Section Code Reporting: Taxpayers might need to report the TDS section code in the Schedule-TDS section for better reconciliation.
• Presumptive Taxation Provisions: Any updates related to presumptive taxation will be included.

How to File ITR-3 Online: A Step-by-Step Guide

1. Log in to the e-filing portal: Go to the official Income Tax e-filing website: www.incometax.gov.in.
2. Navigate to "File Income Tax Return": After logging in, go to 'e-File' > 'Income Tax Returns' > 'File Income Tax Return.'
3. Select Assessment Year and Mode: Choose Assessment Year "2025-26" and select "Online" as the Mode of Filing.
4. Select Taxpayer Category: Choose "Individual" or "HUF" as applicable.
5. Select ITR Form: Choose "ITR-3" and click on "Proceed."
6. Pre-filled Data (if available): The system will show pre-filled data. Review it carefully.
7. Enter/Update Details: Fill in all relevant sections, including:
   • General Information (Part A-GEN)
   • Income from Salaries (Schedule S)
   • Income from House Property (Schedule HP)
   • Profits and Gains from Business or Profession (Schedule BP) – This is the main section for ITR-3 filers.
   • Capital Gains (Schedule CG)
   • Income from Other Sources (Schedule OS)
   • Information about partnership firms (Schedule IF), if applicable.
   • Details of assets and liabilities (Schedule AL), if total income exceeds ₹1 crore.
   • Details of foreign assets and income (Schedule FA), if applicable.
   • Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) details.
   • Advance Tax and Self-Assessment Tax payments.
   • Deductions under Chapter VI-A.
8. Calculate Tax: The system will automatically calculate your tax liability.
9. Review and Confirm: Thoroughly check all parts of the return for correctness.
10. Submit: Once satisfied, proceed to submit the return.
11. e-Verify: Finish the e-verification process using Aadhaar OTP, Net Banking, a pre-validated bank account, or a Demat account. This step is necessary for the return to be considered filed.

Don't Wait, File Now!

The online availability of ITR-3 is a significant step toward making tax compliance easier for businesses and professionals. While the due date for non-audit cases for AY 2025-26 is generally September 15, 2025, and for audit cases, it's October 31, 2025, it’s always best to file your return as early as possible to avoid last-minute rush and potential technical issues.

Make sure all your financial documents, including bank statements, balance sheets, profit & loss accounts, TDS certificates (Form 16/16A), capital gains statements, and any other relevant income proofs, are ready before you start the online filing process.

Take advantage of this online option to ensure accurate and timely tax compliance for AY 2025-26!

Feeling overwhelmed with the complexities of ITR-3? For expert assistance and a seamless filing experience, consider reaching out to the professionals at MyITROnline. They can help ensure accuracy and compliance.

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