ITR 3 - What is ITR 3 Form, Eligibility

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Income Tax Return (ITR) Form 3 is an important document used by individuals and Hindu Undivided Families (HUF) to file their income tax returns with the Income Tax Department of India. It is specially designed for individuals and HUFs who have income from business or profession. 
Here is a detailed description of the ITR-3 form, its purpose, who should file it and the information required.

Eligibility for file ITR 3 Form

The eligibility criteria for filing ITR-3 form are as follows:

Income from business or profession. 

Persons who are partners in a partnership firm but are not carrying on business under the proprietorship.

Revenue from short or long term capital gains.

Who are not eligible to file ITR-3?

Individuals and Hindu Undivided Families (HUFs) who do not fulfill the specified criteria are eligible to file ITR-3 Form:

No Income from Business or Profession.

Individuals who file Form ITR-1, ITR-2 and ITR-4 are ineligible to file ITR-3.

Only Individuals and Hindu Undivided Families (HUFs) file ITR 3 Form.

Penalties for non-compliance

Failure to file ITR-3 within the specified due date may attract penalty and interest under the Income Tax Act. To avoid any legal implications, taxpayers must file ITR on time and follow the filing requirements.

Top Benefits of Income Tax Return (ITR) Filing

Easy Loan Approval :

Filing your ITR can be beneficial when applying for different types of loans like vehicle loan (motorcycle or car) or mortgage. Many major banks usually require a copy of your tax return as proof of your financial status. This is a mandatory paperwork for loan approval.

VISA Application :

When you apply for a visa, you can ask to provide your income tax return. This serves to provide the visa authorities with information about your financial situation and income level. The Embassy checks your earnings to ensure your ability to meet the financial obligations associated with the trip. Often, foreign consulates require either the most recent year's ITR or the last three years' ITR as part of the application documentation.

Claim Tax Refund :

'Claim Tax Refund' is an important benefit of filing income tax returns is the chance to claim tax refund. If you have paid more in your income tax than your actual tax liability, you can submit a tax return to request a refund.

Avoid Penalty :

Individuals and businesses can avoid huge penalties by filing their ITR promptly. Failure to file your ITR on time may result in additional fees in addition to any other mandatory fees under the Act. Apart from this, you may also have to pay interest on the fine amount.

Proof of Income :

Another important benefit of filing ITR is that it serves as proof of your income. Since it comprehensively documents your earnings for the year along with related tax payments, many institutions accept it as valid income proof. So, if you need income verification, simply file your ITR and use the receipt as proof.