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Documents Required for :
ITR-3 Return Registration

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ITR-3 Return Registration in India

ITR-3 is an income tax return form used in India by individuals and Hindu Undivided Families (HUFs) who earn income from proprietary business or professional activities. This form is specifically designed for taxpayers who are partners in a firm but do not carry out business under a proprietorship. It requires detailed reporting of income from business or profession, computation of taxable income, claims for deductions, and tax liability calculations. It's crucial for individuals and HUFs falling under these categories to file ITR-3 electronically if their income exceeds Rs. 5 lakhs or if they are claiming a refund. The due date for filing ITR-3 typically falls on July 31st of the assessment year. This form ensures compliance with Indian tax laws and facilitates accurate assessment of income earned through business or professional activities.

Eligibility Criteria for ITR-3 Form Filing: Who Should and Should Not File

Who Should File ITR-3?

ITR-3 should be filed by individuals and Hindu Undivided Families (HUFs) who have income from the following sources:

  • Business or Profession: If the taxpayer has income from proprietary business or profession activities.
  • Partnership Firm: If the taxpayer is a partner in a partnership firm and does not carry out business under proprietorship.
  • No Proprietary Business: Even if the taxpayer is a partner in a partnership firm but does not carry out business under proprietorship, they should file ITR-3.

If the income includes salary, house property income, capital gains, and income from other sources apart from business or profession, then other ITR forms (such as ITR-1, ITR-2, etc.) might be applicable depending on the specific sources of income.

It's important to note that ITR-3 is mandatory to be filed electronically if the income exceeds Rs. 5 lakhs or if a refund is claimed.

Who is Not Eligible to File the ITR 3 Form?

Individuals and Hindu Undivided Families (HUFs) who do not meet the following criteria should not file ITR-3:

  • No Income from Business or Profession: If the taxpayer does not have any income from proprietary business or profession activities, they are not eligible to file ITR-3. This form is specifically for reporting income from business or profession.
  • Salary/Pension Income Only: Taxpayers who earn income solely from salary or pension and do not have income from business or profession should not file ITR-3. They should file ITR-1 (Sahaj) or ITR-2 depending on additional sources of income, if any.
  • Exclusively Capital Gains or Other Sources: Individuals whose income is exclusively from capital gains (like from property or stocks) or other sources (like interest income, dividends) and do not have business or profession income should choose the relevant ITR form such as ITR-2.
  • Exempt Income Only: If all income is exempt from tax under the Income Tax Act and there is no taxable income, filing an income tax return may not be required unless mandated by specific circumstances.

Penalties and Consequences for Late ITR-3 Filing

If there are errors or omissions in filing your ITR-3 or if you fail to file it within the stipulated deadlines, there can be penalties and consequences imposed by the Income Tax Department. Here are some common penalties associated with ITR-3 filing:

Late Filing Penalty:

If you file your ITR-3 after the due date (usually July 31 for individuals and HUFs), a late filing fee may apply. For FY 2022-23 onwards, the late filing fee is up to Rs. 5,000 if the return is filed after the due date but before December 31 of the assessment year. If filed after December 31, the late fee can go up to Rs. 10,000. For taxpayers with income up to Rs. 5 lakh, the late fee is capped at Rs. 1,000

Interest on Tax Due:

If you have tax due after considering TDS and advance tax, interest under sections 234A, 234B, and 234C of the Income Tax Act may apply. Interest is charged on the amount of tax payable at specified rates for the period of delay in filing and payment of taxes.

Incorrect Information:

If incorrect details are provided or if there are discrepancies found during assessment, penalties can be levied. This can include under-reporting of income, misrepresentation of facts, or failure to provide accurate details.

Non-filing:

If you do not file your ITR-3 at all, you may receive a notice from the Income Tax Department. This could lead to penalties and legal consequences, including prosecution in severe cases of willful non-compliance.

Revision and Rectification:

If you need to revise your ITR-3 due to errors or changes in income details, it's advisable to do so within the prescribed time limits. Failure to rectify errors can lead to penalties.

It's crucial to file your ITR-3 accurately and on time to avoid these penalties and ensure compliance with tax laws. If you're unsure about any aspect of filing your ITR-3, seeking professional assistance or guidance can be beneficial.

Why Choose Filinglounge for ITR3 Form Filing?

Choosing Filing Lounge for filing your ITR-3 form offers several advantages:

  • Expertise and Experience: Filing Lounge provides expert assistance with a team knowledgeable in tax laws and regulations, ensuring accurate and compliant filing of your ITR-3.
  • Convenience: They offer a user-friendly platform that simplifies the process of uploading documents and filing your ITR-3 form online, saving you time and effort.
  • Guidance on Deductions and Credits: Filing Lounge can guide on maximizing deductions and claiming eligible tax credits, optimizing your tax liabilities.
  • Compliance and Accuracy: They ensure that your ITR-3 form is filed accurately, minimizing the risk of errors or omissions that could lead to penalties or delays
  • Secure Document Handling: Your sensitive financial information is handled securely, maintaining confidentiality throughout the filing process.
  • Customer Support: They offer customer support to address any queries or issues you may have during the filing process, assisting as needed.
  • Affordable Pricing: Filing Lounge offers competitive pricing for its services, making professional tax filing accessible without compromising on quality

Related Guides

Documents Required For ITR-3

Proprietorship vs Limited Liability Partnership (LLP) vs Company

Features Proprietorship Partnership LLP Company
Definition A sole proprietorship is an unregistered business entity managed by a single individual. A legal contract between multiple parties to jointly manage and run a business operation. A business type that combines aspects of a partnership and the limited liability of a corporation. A registered business where owners and shareholders have limited liability.
Ownership
  • Single individual
  • Min 2 Partners
  • Max 50 Partners
  • Designated Partners: Min 2(No upper limit)
  • Min: 1 shareholder (for a private company), 7 shareholders (for a public company)
  • Max: 200 shareholders (for a private company), no upper limit (for a public company)
For One Person Company
  • Minimum: 1 individual
  • Maximum: 1 individual
Registration Time 7-10 working days
Promoter Liability Unlimited Liability Limited Liability
Documentation
  • Partnership Deed
  • PAN card of the partnership firm
  • LLP Agreement
  • Incorporation Certificate
  • PAN card of the LLP
  • MOA
  • AOA
  • Certificate of incorporation
  • PAN card of the company
Governance No specific governing law Governed by the terms outlined in the partnership deed Governed by the LLP agreement Governed by a formal structure including a Board of Directors
Transferability Business cannot be transferred Ownership transfer requires the consent of all partners as outlined in the partnership deed. Transferable Easily Transferable for public companies. In private companies, there might be some restrictions.
Compliance Requirements
  • Income tax filing if the turnover exceeds Rs. 2.5 lakhs.
  • Must file ITR 5
  • Must file ITR 5
  • File Form 11
  • Form 8
  • MCA filing
  • Auditor's appointment
  • File ITR 6

ITR-3 FAQ's

What is the registration process of a company?

The registration process of a company is done under the Ministry of Corporate Affairs (MCA) in accordance with the Companies Act 2013.
  • Step 1: Apply For Director Identification Number (DIN)
  • Step 2: Apply For ITR-3 Certificate (DSC)
  • Step 3: Company Name Approval
  • Step 4: Company Incorporation Application Submission
  • Step 5: Get a Certificate of Incorporation

How much does it cost to register a company?

The cost of registering a company in India varies according to the number of stakeholders and size. The Cost of Incorporation of a ITR-3 would vary from Rs.6, 000 - to Rs. 30,000/- depending upon the following:
  • Number of Directors
  • Number of Members
  • Authorized share capital
  • Professional fees

What are the types of registration?

Company registration is mandatory in India to start any business, so fixing the business structures is crucial. In India, there are seven different types of company registration:
  • Sole Proprietorship Registration
  • One-person Company Registration
  • Partnerships Firm Registration 
  • Limited Liability Partnership (LLP) Company Registration
  • ITR-3 Return Registration
  • Public Limited Company Registration
  • Section 8 Company Registration
 

Can NRIs or foreign national or foreign entities register a company in India?

Yes, NRIs, foreign nationals, and foreign entities can register a company and invest in India, subject to the Foreign Direct Investment norms set by the RBI. However, incorporation rules in India require for one Indian national to mandatorily be a part of the company on the Board of Directors.

How do I check the availability of names for my company?

You can use the FilingLounge company name availability search tab to search for available names in India. It is important to note that FilingLounge would just provide available choices, based on identical names already registered.

Is GST registration mandatory at this stage?

GST registration is mandatory for certain businesses. Companies dealing with e-commerce operations or any other interstate activity and companies with turnover of more than Rs. 40 Lakhs are required to obtain the same. GST registration takes just 3-5 working days with FilingLounge.

What are the compliances of a ITR-3?

A company is required to maintain certain compliances once it is incorporated. An auditor needs to be appointed within 30 days and income tax filing and annual return filing need to be done every year. Apart from these, mandatory compliances like ‘Commencement of Business’ forms, and DIN eKYC also need to be done.

When is the statutory auditor to be appointed?

The Board of Directors is required to appoint a practicing Chartered Accountant within 30 days of Incorporating a ITR-3.

Which Form is to be filed for the ITR filing of ITR-3?

The Private Limited Companies that are registered in India have to file the ITR returns each year in Form ITR 6.

Which form is to be filed for filing the annual returns of a Company?

The companies registered in India are required to file the MCA annual return each year informs AOC 4 and MGT 7.

How many members are required to start a ITR-3?

Minimum 2 number of members are required to start a ITR-3 which can be extended to 200 members.

How can ownership be transferred?

The ownership of a ITR-3 can be transferred by the way of shares.

How are the Companies taxed? What are the tax rates?

Private Limited Companies are taxed at 30% plus the surcharge and cess as applicable.

Who governs and controls the functioning of a ITR-3?

The MCA and Companies Act,2013 controls the functioning of a ITR-3.

What are the benefits of registering a ITR-3?

There are various of registering as a ITR-3 like Limited Liability, Access to funding, borrowing capacity, greater capacity, easy exit, and scope of multiple opportunities.

What is authorized capital and paid-up capital?

Authorized capital is the maximum value of equity shares that can be issued by a company. On the other hand, paid up capital is the amount of shares issued by the company to shareholders. Authorized capital can be increased any time after incorporation to issue additional shares to the shareholders.

What is limited liability protection?

Limited liability is the status of being legally responsible only for a limited amount of debts of a company. Unlike proprietorships and partnerships, the liability of the shareholders with respect to the company’s liabilities is limited.

How do I open a current account?

Once the company is incorporated, a current account needs to be opened in the name of the company for transactions. Your advisor will guide you through the process of choosing the bank that you want to open the account with and get the documents like certificate of incorporation, Memorandum and Articles of Association, board resolution, copy of PAN allotment letter, and utility bill.

Related Business Registrations

In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.

FSSAI Registration
IE Code
Trademark Registration
Copyright Registration
Salaried Tax-filing
GST Return Filing

MCA Compliance

Each registered entity is required to meet its compliance duties at the close of each financial year. This generally includes auditing financial statements, filing income tax returns, and submitting annual forms to the Ministry of Corporate Affairs (MCA).

Compliance For Form Due date Penalty
Commencement of Business Intimation to Registrar for Commencement of Business Within 180 days from incorporation INR 50,000 on company and INR 1,000 per day on directors for each day of default
Annual KYC of Directors DIR 3 E-KYC 30th September of every year INR 5,000 for late filing
Appointment of Auditor Form ADT 1 Within 15 days of the AGM INR 300 per day (max INR 12,000)
Financial Statements Form AOC 4 Within 30 days from the AGM INR 100 per day of default
Annual Return Form MGT 7 Within 60 days from the AGM INR 100 per day of default

All Limited Liability Partnerships (LLP) in India must file annual returns with the Ministry of Corporate Affairs (MCA). FilingLounge provides affordable services to help you keep your LLP compliant.

LLP Compliance Form Due date Penalty
Annual KYC of Directors DIR 3 KYC 30th September of every year INR 5,000 for late filing
Annual Return Form 11 May 30th every year INR 100 per day of default
Statements of Accounts and Solvency Form 8 30th October every year INR 100 per day of default (minimum penalty INR 10,000)

In addition to the filings listed above, there may be other compliance requirements relevant to LLPs. To ensure all compliance needs of your LLP are met, please seek assistance from a Filinglounge Advisor.

Entity Compliance Form Due date
Private Limited Company Annual Return MGT-7 Within 60 days from the conclusion of the AGM
Financial Statements AOC-4 Within 30 days from the conclusion of the AGM
DIR-3 KYC DIR-3 KYC 30th September every year
Return of Deposits DPT-3 30th June every year
Appointment of Auditor ADT-1 Within 15 days from the conclusion of the AGM
Income Tax Return (Non-audit case) ITR-6 31st July every year
Income Tax Return (Audit case) ITR-6 30th September every year
Annual GST Return GSTR-9 31st December of the subsequent financial year
MSME Form Form 1 (MCA) half-yearly return by 31st October (April to September), & 30th April for the period October to March every year
Limited Liability Partnership Income Tax Return (Non-audit case) ITR 5 31st July every year
Income Tax Return (Audit case) ITR 5 30th September every year
Annual Return Form 11 30th May every year
Financial Statements Form-8 30th October every year

Note : There might be extra filings needed depending on your business type and activities. Talk to a FilingLounge advisor to get the right guidance for your company's compliance.