Proprietorship ITR Filing: Individuals and HUF (Hindu Undivided Families) with income from business including proprietorship or profession are required to file the ITR-3 form. Filing ITR for proprietorships in India follows a similar process as filing for individuals, with some differences to account for the business income. The last date to file ITR for the assessment year 2023-24 is July 31, 2023. If you run a proprietorship, here are the steps you need to follow to file your ITR.
How to File ITR for Proprietorship and Self-Employed (ITR-3)
- Login to the income tax portal and click on e-File > Income Tax Returns > File Income Tax Return
- Select 2023-23 (Current AY) as the assessment year and online mode to file; click on Continue
- Click on Start New Filing and select ITR-3 and click on Proceed with ITR-3 and then on Let’s Get Started
- Select Others for reason to file to ITR and click on Continue
- There are total 33 schedules across five categories; go to Income from the left panel and select at least one schedule such as Schedule Other Sources in this category to proceed further. Select others as per your sources of income
- Click on Business on the left panel and select all relevant schedules such as nature of business, balance sheet, manufacturing account, profit and loss account, income from business, etc.
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- Click on Depreciation on the left panel and select schedules accordingly if you want depreciation which is defined as a drop in the value of an object due to wear and tear and a deduction can be claimed for accounting or taxation purposes. Click on Continue
- Under Schedules Summary, click on Part A – General and fill your personal information, contact, select 139 (1) under Filing Section and select whether you opted for new or old tax filing regime, answer other question in Yes or No and click on Save
- Under Audit Information, select whether you are liable to maintain books of accounts, whether your turnover is over Rs 1 crore, whether you are liable for audit, etc and click on Save
- Share your bank account details and under Bank Details and click on Confirm
- Now under Nature of Business, click on Add Details, select your type of business from the dropdown and the name of your business and click on Add and then click on Confirm
- Go to Profile and Loss (P&L) Account and under Credit to Profit and Loss Account, add details on receipts relevant to you such as rent, commission, dividend income, interest income, profit on sale of fixed assets, etc
- Likewise, under Debit to Profit and Loss Account, add all your expenses such as freight outward, power and fuel, rents, repairs to building and machinery, compensation to employees, etc., and click on Save and click on Continue
- If there are expenses for which the option is not available, you can put it under Other Expenses, and then click on Add and then click on Confirm
- Now go to Part A – Balance Sheet and under Source of Funds, enter details under Proprietor’s Funds, Loan and Advances and click on Add
- Under Application of Funds, enter details under fixed assets, investments, current assets, loans and advances and click on Add
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- The amount under Application and Sources of Funds should be the same, click on Confirm
- Fill details under other Schedules for deductions under various sections if they are relevant to your business
- Go to Part B – TTI which will show tax levied on your income; click on Preview Return
- Acknowledge the details shared and click on Proceed to Preview
- Preview the entire form and click on Proceed to Validation
- If there are no errors in the filing, it will show Validation Successful; click on Proceed to Verification
- Click on e-Verify Now and click on Continue
- Verify the form through OTP or Digital Signature Certificate and click on Continue
- Click on Submit to file the ITR-3 form