ITR-3 Form Filing

Follow the given steps to file ITR-3 Return in India:

1. Login to the Income Tax Portal

• The taxpayer must log in to the Income Tax e-filing portal using PAN and password.

2. Select the Right Form

• Choose ITR-3 as the applicable form based on income sources.

3. Fill in the General Information

• Enter personal details, residential status, and financial year.
• Select New Tax Regime vs. Old Tax Regime option.

4. Report Business and Professional Income

• Declare turnover, profit, and details of business activity.
• Maintain profit and loss accounts, balance sheets, and expense records if books of accounts are required.

5. Capital Gains and Crypto Transactions

• Report all capital gains, including equity shares, mutual funds, and real estate sales.
• Enter crypto transactions separately under the VDA schedule.

6. Depreciation and Deductions

• Declare depreciation on business assets.
• Claim deductions under Section 80C, 80D, 80E, and 80G of the Income Tax Act, 1961 for eligible expenses and investments.

7. Compute Tax Liability

• The system calculates total tax after deductions.
• Pay outstanding tax, if any.

8. Verify and Submit ITR

• E-verify using Aadhaar OTP, net banking, or electronic verification code (EVC).
• If not e-verified, send a signed copy of ITR-V to CPC Bangalore.

Due Date for Filing ITR-3

📅 July 31: If tax audit is not required.
📅 October 31: If tax audit is required (business turnover exceeding prescribed limits).

 Penalties for Late Filing of ITR-3

• ₹5,000 penalty if filed after July 31 but before December 31.
• ₹10,000 penalty if filed after December 31.
• Interest under Sections 234A, 234B, and 234C for delayed tax payments.
• Certain Losses cannot be carried forward if ITR is filed after the due date.

Tax-Saving Tips While Filing ITR-3

• Invest in Tax-Saving Schemes: PPF, ELSS, NSC, NPS under Section 80C of the Income Tax Act, 1961.
• Home Loan Interest Deduction: Claim up to ₹2 lakh under Section 24(b) of the Income Tax Act, 1961 for self-occupied property.
• Health Insurance Premium: Deduction under Section 80D of the Income Tax Act, 1961 for self and family.
• Reinvest Capital Gains: Use Section 54, 54EC, and 54F of the Income Tax Act, 1961 to avoid tax on capital gains.
• Depreciation Benefits: Businesses can claim depreciation on assets to reduce taxable income.

Common Mistakes to Avoid While Filing ITR-3

Filing ITR-3 requires careful attention to income sources, deductions, tax calculations, and compliance requirements. Many taxpayers make errors that lead to penalties, tax notices, or rejected returns. Below are some of the most common mistakes and how to avoid them:

1. Filing the Wrong ITR Form:

Many taxpayers mistakenly file ITR-1 or ITR-2 when they have business or professional income. ITR-3 is mandatory for:

• Business owners (sole proprietors).
• Freelancers, self-employed professionals, and consultants.
• Traders (F&O, intraday, equity, commodities).
• Individuals with multiple income sources (business + salary + capital gains).

✅ Solution: Choose ITR-3 if you have business/professional income or trading activities.

2. Not Reporting Foreign Income & Assets:

If you own foreign assets, receive income from overseas, or have a foreign bank account, it must be declared in Schedule FA (Foreign Assets). Failure to report can lead to tax scrutiny under the Black Money Act.

✅ Solution: Disclose all foreign assets and income to avoid penalties.

3. Failing to Claim Eligible Deductions & Exemptions

Many taxpayers miss out on deductions available under the Income Tax Act, 1961, such as:

• Section 80C – PPF, EPF, ELSS, Life Insurance Premiums.
• Section 80D – Health insurance for self and family.
• Section 80E – Education loan interest.
• Section 24(b) – Home loan interest deduction.

✅ Solution: Maintain proof of investments and expenses to claim deductions.

4. Incorrect Tax Computation

Errors in calculating tax liability can result in underpayment or overpayment of taxes.

• Capital Gains Tax: Not differentiating short-term vs. long-term capital gains.
• F&O Trading: The turnover and expenses were not calculated correctly.
• Cryptocurrency Gains: Not paying 30% tax on VDA transactions.

✅ Solution: Use Form 26AS, AIS, TIS and share trading statements from respective Brokerage to verify tax calculations.

5. Late Filing, Resulting in Penalties

If you miss the deadline, you face:

• ₹5,000 fine if filed after July 31 but before December 31.
• ₹10,000 fine if filed after December 31.
• Losses cannot be carried forward if ITR is filed late.

✅ Solution: File your ITR before the due date to avoid penalties.

6. Not E-Verifying ITR After Submission

Filing ITR is incomplete without e-verification. The Income Tax Department will not process an unverified return.

✅ Solution: Verify within 30 days via:

• Aadhaar OTP
• Net banking
• EVC through bank account or Demat account
• Sending signed ITR-V to CPC Bangalore

Why Choose Kanakkupillai for ITR-3 Form Filing?

Your go-to partner for ITR-3 filing is Kanakkupillai, which offers knowledgeable support and guarantees a smooth and correct filing process. Our knowledgeable staff streamlines the tax procedure, saving you time and effort while guaranteeing adherence to all relevant laws. Thanks to our in-depth knowledge of tax regulations and the ITR-3 form, we successfully manage all complexity, freeing you up to concentrate on other important tasks.

• Personalised Approach: At Kanakkupillai, we understand that every individual is different and that every individual's financial situation is unique. That's why we offer customized solutions for both individuals and Hindu Undivided Families (HUFs). Our professionals will walk you through the filing process step-by-step to make sure that all of your sources of income and deductions are correctly documented.  Our goal is to make filing taxes as stress-free as possible while making sure you take advantage of all the legal advantages.

• Expertise and Experience: Kanakkupillai's years of tax filing experience give you unparalleled knowledge. Our personnel are knowledgeable about the intricacies of ITR-3 and other associated tax Returns so that we can provide trustworthy guidance and support. 

• Timely Filing and Compliance: Filing your tax returns on time is essential to avoid penalties and interest charges. Kanakkupillai ensures that your ITR-3 is filed within the deadlines, keeping you in full compliance with tax regulations. We make sure all the necessary documents are correctly submitted, reducing the risk of errors and ensuring smooth processing.

• Hassle-Free Process: We aim to simplify the tax filing process. Our platform and team make sure that the paperwork, calculations, and submissions are handled professionally.

• Affordable and Transparent Pricing: At Kanakkupillai, we offer cost-effective and transparent pricing for our ITR-3 filing services. There are no hidden fees, and we ensure complete clarity on the costs involved.

• Peace of Mind: When you choose Kanakkupillai, you gain peace of mind knowing your ITR-3 filing is in the hands of professionals who care about your financial well-being. We ensure everything is done correctly and on time.