The Income Tax Return Form ITR-3 is applicable to individuals and HUFs having income from business or profession. With the growth of freelancing and stock trading in India, many taxpayers are now required to file ITR-3 instead of the simpler ITR-1 or ITR-4.

Who Should File ITR-3?

✅ Individuals or HUFs with income from:

– Freelancing or contractual professional work (e.g., developers, designers, consultants)

– Business income (sole proprietors not eligible for presumptive taxation under 44AD or 44ADA)

– Intraday trading, F&O, or short-term capital gains from stock markets

– Capital gains, house property, salary, and other income sources

Documents Required

– PAN, Aadhaar

– Bank statements

– Trading account statement (for traders)

– Income/expense details

– Form 26AS, AIS/TIS

– TDS certificates

Steps to File ITR-3

1. Register or log in to [https://incometax.gov.in](https://incometax.gov.in).

2. Navigate to e-file > Income Tax Returns > File Income Tax Return.

3. Choose AY 2025-26, ITR Form: ITR-3.

4. Select mode of filing: Online or offline (via utility).

5. Enter income details from all heads including business/profession.

6. Fill balance sheet and P&L account (if books maintained).

7. Claim eligible deductions under Chapter VI-A (80C, 80D, etc.).

8. Verify tax computation and pay any self-assessment tax if needed.

9. Submit and e-verify the return.

Is Audit Mandatory?

🔸 Yes, if your gross receipts exceed ₹1 crore (business) or ₹50 lakh (profession).

🔸 For traders, audit is applicable if turnover exceeds ₹10 crore (from FY 2020-21 onwards, if 95% transactions are digital).

Common Mistakes to Avoid

– Not reporting F&O losses or intraday income

– Using ITR-1 or ITR-4 wrongly instead of ITR-3

– Ignoring balance sheet and P&L sections (if books kept)

– Missing TDS credits shown in 26AS/AIS

Important Due Dates for AY 2025-26

– 15th September 2025 – for non-audit cases

– 31st October 2025 – for audit cases

FAQs

• Q1. Can salaried individuals file ITR-3?

Yes, if they also have business or professional income.

• Q2. What if I only have losses from trading?

You must still file ITR-3 to carry forward losses.

• Q3. Can freelancers use ITR-4?

Only if opting for presumptive taxation under Section 44ADA.

• Q4. Do I need to maintain books of accounts?

Yes, if your income exceeds ₹2.5 lakh (profession) or turnover crosses limits specified.