Income Tax Filing 2025: ITR-3 & ITR-4 Updated Return Filing Window Opens For Two AYs
Income Tax Filing 2025: The tax department has announced that the facility for filing Updated Returns for AY 2021-22 and AY 2022-23 for ITR-3 and ITR-4 is now available.
Updated Returns (also known as ITR-U) were introduced under Section 139(8A) of the Income Tax Act, 1961, to allow taxpayers to correct errors or omissions in their original ITRs or file a return if they missed the original deadline.
However, it is important to note that filing an ITR-U attracts additional tax liability, which can be up to 50% of the additional tax and interest payable.
Who Needs to File ITR-3?
ITR-3 is applicable for individuals and Hindu Undivided Families (HUFs) who have income from business or profession and are not eligible to file ITR-1, ITR-2, or ITR-4.
Below are the eligibility criteria and applicability:
Eligibility for ITR-3
Individuals or HUFs with income from Profits and gains from business or profession (both tax audit and non-tax audit cases, provided presumptive taxation is not opted for).
- Salary or pension.
- Rental income from one or more house properties.
- Capital gains (short-term or long-term, including from shares, mutual funds, or property).
- Income from other sources (e.g., interest, dividends, lottery winnings).
- Income as a partner in a partnership firm (including interest or remuneration from the firm).
- Individuals who are directors in a company.
- Individuals who have investments in unlisted equity shares during the financial year.
- Those with foreign income or assets or signing authority in overseas accounts.
- Individuals with total income exceeding Rs.50 lakh (if applicable, along with business income).
- Taxpayers involved in speculative activities (e.g., intraday trading, futures, and options) or carrying forward losses.
Who Cannot File ITR-3?
Companies, trusts, co-operative societies, Limited Liability Partnerships (LLPs), local authorities, Associations of Persons (AOPs), or Bodies of Individuals (BOIs).
Individuals or HUFs without income from a business, profession, or partnership firm.
Who Needs to File ITR-4 (Sugam)?
ITR-4 (Sugam) is designed for resident individuals, HUFs, and partnership firms (other than LLPs) who opt for the presumptive taxation scheme under Sections 44AD, 44ADA, or 44AE, with simpler income structures.
Eligibility for ITR-4
Resident individuals, HUFs, or partnership firms (other than LLPs) with:
- Total income up to Rs.50 lakh.
- Business or professional income computed on a presumptive basis under:
- Section 44AD: For small businesses (traders/manufacturers) with turnover up to Rs.2 crore (or Rs.3 crore if 95% or more receipts are digital).
- Section 44ADA: For professionals (e.g., doctors, lawyers, architects, engineers, etc.) with receipts up to Rs.50 lakh (or Rs.75 lakh if 95% or more receipts are digital).
- Section 44AE: For businesses of plying, hiring, or leasing goods carriages (owning up to 10 vehicles).
Income from:
- Salary or pension.
- One house property (no carry forward of losses).
- Other sources (e.g., interest, dividends, family pension), excluding lottery winnings or income taxable under Sections 115BBDA or 115BBE.
- Agricultural income up to Rs.5,000.
- Long-term capital gains (LTCG) under Section 112A (e.g., from listed shares or mutual funds) up to Rs.1.25 lakh, without carry forward of capital losses.
Who Cannot File ITR-4?
Non-residents or Resident but Not Ordinarily Resident (RNOR).
Taxpayers with:
- Total income exceeding Rs.50 lakh.
- Income from more than one house property.
- Agricultural income exceeding Rs.5,000.
- Capital gains (except LTCG under Section 112A up to Rs.1.25 lakh).
- Foreign income or assets.
- Lottery winnings, racehorse ownership, or income taxable under Sections 115BBDA or 115BBE.
- Deferred tax on ESOPs or claiming relief under Sections 90/91 (DTAA).
- Unlisted equity shares held during the year.
- Directorship in a company.
