Most businesses either make small mistakes or outsource the task to a third party. But not anymore! Here, we have explained a step-by-step guide on how to file GST-3B form in detail. With this, the task will become hassle-free and help you protect your business from legal and audit liabilities.

GST-3B: What is it?

Before we learn how to file GST-3B, let’s understand the purpose and significance of the document. This is a simplified monthly return form every taxpaying business needs to file. It doesn’t matter whether any transaction was done in the concerned period. Filing is mandatory as it helps in future audit purposes. 

• Every GST-3B contains essential information, including:
• Details of the outward supplies or the sales records
• Inward supplies or purchases are liable for a reverse charge
• Eligible input tax credit
• Tax paid and the tax payable
  

  
  Legal Validation 

  In Rule 61(5) of the CGST Rules, Form GST-3B has been mentioned. It states that every taxpaying business needs to fill out the document by the 20th of the following month. The due date, however, might differ. Parameters like the state and the turnover under the Quarterly Return Monthly Payment scheme will influence the same.

  Who Needs to File the GST-3B Form?

  It’s important to know who is eligible to file this monthly GST return form. This will help avoid the penalties for non-filing. 

  • Regular taxpayers, including those who are classified as composition taxpayers, switched to standard ones
  • SEZ units and developers
  • Taxpayers recognized under the QRMP scheme
  • Casual taxable person
  • Non-resident taxable person

  For businesses that didn’t make any transactions, filing the NIL GST-3B form is mandatory.

Documents Required for Filing

As we are discussing how to file GST-3B, it’s important to know the necessary papers needed. This will prevent rejection of the return due to the lack of supporting documents. So, here’s a checklist you need to follow thoroughly. 

• GSTIN and unhindered access to the GST portal of the Indian government
• Sales and purchase invoices of the month for which the GST-3B form needs to be filed
• Credit and debit notes without any discrepancies 
• Reverse charge liability details for the purchases or inward supplies
• Details of the Input Tax Credit
• Cash ledger, liability ledger, and credit ledger 
• Previous returns (GSTR-1 and GSTR 2A/2B) for a thorough reconciliation

If any document is missing, you may have to think of another workaround. That’s why you can connect with the experts at Heet FinServe. We will guide you through all the prerequisites that should be met. Only then can you file the GST-3B form without any hurdle.

How to File GST-3B: A Step-by-step Guide

Step 1: Log in to the GST Portal

Once you have gathered all the documents, it’s time to file the GST-3B form. For this, log in to the official government portal for GST. 

• Only use credentials that are valid to avoid penalties. 
• Now, navigate to the Returns Dashboard on the homepage.

Step 2: Select the Filing Period

You need to select the correct financial year for which you want to file the GST-3B form. Apart from this, the Return Filing Period is also crucial. You can choose from the available options and then click on the Search button. A new window will open. Choose from “Prepare Online” or “Prepare Offline” under the GSTR-3B tab at your convenience. 

Step 3: Fill in the Details

Now it’s time to fill in all the details associated with your business. Numerous sections will be there. So, in this guide on how to file GST-3B, we will guide you through each category. 

Details of Inward and Outward Supplies 

Here, you need to provide the tax breakup and taxable value for IGST, SGST, CGST, and Cess. These will include the following parameters:

• Outward taxable supplies: Other than zero-rated, exempted, and nil-rated
• Outward taxable supplies: Zero-rated, like exports
• Other outward supplies: Exempted and nil-rated
• Inward supplies: Only those for which the reverse charge is applicable
• Non-GST outward supplies

Interstate Supplies to Unregistered Persons, Composition Dealers, and UIN Holders

These details should be state-specific. Here, you need to enter the information for:

• Unregistered dealers: Businesses who are yet to register themselves
• Composition scheme dealers
• UIN holders like diplomatic missions

Eligible ITC

The Input Tax Credit will be eligible for:

• Import of goods and services
• Domestic purchases, if any
• Inward supplies or purchases that are liable for the reverse charge
• ITC reversed under the rules, like exempted supplies

You also need to provide the information for the Net ITC available. This will be auto-calculated once you enter the details. 

Exempt, Nil, and Non-GST Inward Supplies

You have to mention the purchase value of inward supplies, including exempted, nil-rated, and non-GST supplies.

Payment of Tax

Once you have declared, the system will autofill the tax amount to be paid. All you have to do here is:

• Checking the credit balance and cash in the ledgers
• Choosing the appropriate ITC utilisation order 
• Paying the remaining amount using the Electronic Cash Ledger

Interest and Late Fee

Sometimes, you may have missed a deadline or received a penalty. The details should be mentioned here. 

Step 4: Save and Preview

Go through all the details you have filled in and the auto-calculated numbers. If you are satisfied, click on Save. You can download a summary by clicking the button that says “Preview Draft GSTR-3B”. 

Step 5: Submit and File 

Click on the Submit button and check if the status of your return shows Submitted. If it does, select the option “File GSTR-3B with DSC/EVC”. Here, you can use either of the two:

• DSC: Digital Signature Certificate
• EVC: Electronic Verification Code

Once the form is submitted successfully, you will receive an ARN or Acknowledgement Reference Number. 

How will Heet FinServe Help You file GST-3B?

Being a reputed provider of taxation and financial services, we at Heet FinServe will help you successfully file the GST-3B form in no time. Our experts will work diligently on your business details to prepare the entire return file. With us, you will get the following benefits:

• Accurate ITC claim: We will reconcile the ITC claims with the GSTR-2B form to ensure the amount is precise and without any discrepancies. 
• Preventing penalties: With us, you can file the GST-3B form on time. There won’t be any type of late fees or interest. 
• Correct filing period: Our experts always double-check the return filing period and the financial year before proceeding. 
• Matched tax liability: We will ensure the outward supplies eligible for the tax match with the details provided in the GSTR-1 form. 

Conclusion 

As you are now aware of how to file GST-3B, missing the filing period or delays can be eliminated from the picture. Just follow this guide to fill out the form with all the accurate information. Feeling confused? Do not worry! Connect with the experts at Heet FinServe to get more clarity.

There are two basic reasons for some common deductions like medical expenses and education loan interest, which do not apply in this new system: the not-so-favourable investment scenario for simple investments or financial profiles may prefer this easy tax way for added clarity. High deductions in well-insured home loans will, however, prefer the old scheme. A close look will identify the best option concerning the lowest tax liability, depending on personal circumstances.

Updated Income Tax Slabs and Rates – FY 2025-26 (AY 2026-27) | FY 2024-25 (AY 2025-26)

Finance Minister Nirmala Sitharaman announced revised income tax slabs under the new framework in the Union Budget 2025. These revised slabs will take effect on April 1, 2025, and apply to the financial year 2025-26. The proposal includes raising the Section 87A tax rebate to Rs 60,000 for taxpayers with incomes up to Rs 12 lakh. This hike grants zero tax liability for those earning up to Rs 12 lakh annually. There is no change in the surcharge on tax liability under the new system for FY 2025-26.

Proposed Income Tax Slabs under New Framework for FY 2025-26 (AY 2026-27)

Below is a quick tax regime Overview showing old system rates for recent years.

Here is the table of income tax rates for FY 2024-25 (AY 2025-26), FY 2023-24 (AY 2024-25), FY 2022-23 (AY 2023-24) and FY 2021-22 (AY 2022-23), depending on the old tax regime.

Old system tax rates for FY 2024-25 (AY 2025-26) through FY 2021-22 (AY 2022-23).

An example below shows how to compute payable income tax under the new system for FY 2024-25. For example, suppose an individual’s gross total income reaches Rs 20 lakh in the financial year 2024-25. He is eligible for a standard deduction of Rs 75,000 in the current financial year. The employer recently deposited Rs 2 lakh in his Tier-I NPS account for retirement benefits. He can claim this deduction under section 80CCD(2) of the Income-tax Act, for example.

Old versus New Slab Rates for FY 2024-25 (AY 2025-26)

Individuals with net taxable income up to Rs 5 lakh qualify for a rebate under section 87A in the old system. Their resulting tax liability will be nil under this provision for incomes up to Rs 5 lakh.

Exemptions and Deductions Excluded from the New System

The list below shows major deductions and exemptions excluded from the new system:

Salary 

• Professional tax and entertainment allowance on salaries
• Leave Travel Allowance (LTA)
• House Rent Allowance (HRA)
• Allowances to MPs/MLAs
• Helper allowance
• Children’s education allowance
• Other special allowances [Section 10(14)]

House Property 

• Interest on housing loan on the self-occupied property or vacant property (Section 24)

Other Sources 

• Gifts up to Rs 50000 received in a financial year remain exempt from tax under the Gifts Act.
• Budget 2023 introduced a deduction under Section 57(iiia) for family pension income with a limit of Rs 15000

Chapter VI: A Dedication 

• Employer’s contribution to the employee’s NPS account qualifies for deduction under Section 80CCD(2) of the Income Tax Act
• Expenses on additional workers in specified sectors qualify for deduction under Section 80JJA of the Income Tax Act
• Budget 2023 allowed a deduction for sums paid or deposited in the Agniveer Corpus Fund under Section 80 CCH(2)
• Budget 2024 raised the limit on employer contributions to pension schemes from ten percent to fourteen percent under Section 80CCD(2)

Old Tax Regime Vs. New Tax Regime – Analysis of Deductions 

• This comparison clarifies which deductions apply under each tax regime for individuals with diverse financial profiles.

Old Regime Vs. New Regime – Which Works Best? 

• Super senior citizens benefit from a higher basic exemption limit of Rs. 5 lakh under the old regime
• The new tax regime suits taxpayers who make low investments and want a simpler tax plan

Taxpayers with tax-saving investments, medical claims or insurance premiums may enjoy larger deductions under the old tax regime. Home loan EMIs and education loan repayments also reduce taxable income in the old regime. Evaluating these options provides clarity on which tax plan suits the taxpayer’s unique financial profile and goals.

Any payments for brokerage fees coupled with stamp duty expenses and GST on brokerage and SEBI turnover charges remain deductible, no matter if capital gain or profits from business and professional activity taxation apply. The tax regulations do not permit indexation benefits in cases of STCG vs LTCG. Short-term capital losses from STCG and LTCG can be used to offset each other, but long-term capital losses cannot be reduced through short-term gains. The tax rules explained above operate identically for individuals as well as HUFs, companies, LLPs, and other tax entities when dealing with listed securities and related financial instruments.

STCG vs LTCG FY 24-25 Under New Regime

Disclaimer

The author holds personal opinions in this article. The content within this document serves only for educational purposes while excluding any kind of professional guidance. The article only aims to offer you general information. Therefore, all readers should get professional advice from competent professionals and tax advisors before making any decisions. In this article, the author bears no accountability for any damage, financial loss, or other consequences that emerge from the content distribution or from taking decisions based on this information delivery.

Before now, a head office could claim input service credit on an optional ISD registration without obligatory distribution. 1 April 2025 states that any branch must distribute the credit in the same month in which the invoice is received. Therefore, this update provides yet another compliance requirement and strengthens the need for a well-defined process.

As such, the pivotal problem is now determining the correct distribution value for service credit by ITC allocation by ISD. Rule 39 of CGST does cover this situation somewhat, but still leaves it vague, concerning some other situations. Each organisation should consider each invoice and calculate the correct distribution value before filing the returns. Companies must act now to avoid penalties and maintain full GST compliance through correct credit distribution. However, let us discuss the complexities: 

1. Input tax credit allocation is to be treated under a pro-rata method based on turnover in each state. This rule applies to the ITC allocation by ISD in case multiple units share the input service. The purpose of this rule is thus to encourage equitable sharing of GST credit among respective branches concerning key input services during each month.

Use Case:  

A firm may have separate branches in various states or union territories across the country. One input service may benefit more than one distinct branch in the same operation period.

Distribution Rules:  

1. Allocate GST credit only to those units that directly receive the input service from the distributor.
2. Distribution must follow a pro-rata calculation based on each recipient’s turnover in that state period.
3. Proportion equals each recipient’s turnover divided by the total turnover of all active recipients in the relevant period.  

Illustrative Example:  

• Three units labeled A, B, and C each operate across different Indian states under GST.
• An input service, such as cloud software, is used by Units A and B only.

During the relevant period:  

• Unit A recorded a turnover of Rs 10 lakh in Maharashtra while operational during the specified period.  
• Unit B recorded a turnover of Rs 30 lakh in Gujarat while operational during the specified period. 
• Unit C did not use this service and is excluded from credit distribution under ISD.
• The combined turnover of Units A and B is Rs 40 lakh in the current period.
• Total GST credit available for distribution equals Rs 4000 for the specified period under ISD rules. 

Credit Allocation:  

• Unit A receives = Rs.4,000 × (10 ÷ 40) = Rs.1,000 credit on the service  
• Unit B receives = Rs.4,000 × (30 ÷ 40) = Rs.3,000 credit on the service  

This process grants fair input service credit distribution in proportion to each unit’s turnover share in the period.

1. In this rule, the tax credit input is to be shared among the eligible persons as defined by the rule in the following a pro-rata formula based on the turnover generated by each recipient in their respective states and union territories. The formula computes each recipient’s turnover in its respective state or union territory for that period. It compares this recipient’s turnover with the total turnover of all active recipients for distribution. This rule provides the ITC allocation by ISD to the various applicable branches for every relevant month.

Scenario:

• A single GST number already covers three operating units: A, B, and C.  
• Common input services, such as licensing audit software, will provide benefits to the branches concerned, so that a shared credit pool will be needed.   
• The overall GST credit on this service will then need to be shared with all eligible recipients during the period.

Distribution Rule:

• The credit must be distributed among recipients who operate in the current year and receive the service.  
• The distribution follows a pro rata method to assign each recipient its share of the credit.  
• The formula compares each recipient’s turnover in its region to the total turnover of all operational recipients.  

Example for Better Understanding;

• A company operates three units named A, B, and C in different states under the same GST registration.  
• An input service like corporate branding applies to all three recipients in the current month.  
• Turnovers during the relevant period: 

Credit Allocation: 

• Unit A: Rs.10,000 × (20 ÷ 100) = Rs.2,000 
• Unit B: Rs.10,000 × (30 ÷ 100) = Rs.3,000 
• Unit C: Rs.10,000 × (50 ÷ 100) = Rs.5,000

The clause takes care to provide for a fair and proportional distribution of ITC since the input service benefits all branches in correspondence to the scale of operations (turnover) of each recipient.

1. The input tax credit that is to be apportioned under the provisions of clause (d) and (e) to one of the recipients “R1,” whether registered or not, out of all the recipients to whom input tax credit is attributable including recipients engaged in exempt supply or are otherwise not registered for any reason, shall be R1 as computed following the formula given here:

Calculation Formula: 

C1 = (t1 / T) x C  

• “C” denotes the overall amount of credits that the Input Service Distributor must distribute for use during the relevant period.  
• “t1” signifies the turnover value of recipient R1 during the said relevant period within the state or union territory concerned.  
• “T” stands for the total turnover of all eligible recipients during the said relevant period for all the areas. 

The clause elucidates the manner in which GST shares of credit should be calculated for a particular service recipient under circumstances whereby there are other service recipients.  

• Approved input service credit share through these rules,” thus connotes a recipient registered under GST.  
• Recipients registered for any reason still qualify for credit sharing based on the turnover that is duly registered.  
• Recipients supplying exempt supplies qualify for this credit share distribution.

Process Steps:

The following steps calculate C1, which is the credit share for recipient R1, using the formula.  

• Calculate t1 by summing the recipient R1 turnover during the relevant period in its state or union territory.
• Compute the ratio by dividing t1 by T, where T is the total turnover of all eligible recipients.
• Multiply the ratio by C, which is the total credit amount to allocate for the period.
• The final result equals C1, which is the credit share allocated to recipient R1 under the formula.

This formula distributes input service credit fairly based on each recipient’s turnover ratio under GST for ITC allocation by ISD.

Take an example to understand:

• Total Credit (C) = Rs. 1 lakh  
• Recipient R1’s turnover (t1) = Rs. 20 lakh  
• Total turnover of all recipients (T) = Rs. 1 crore  

Then C1 equals the result of (20,00,000 divided by 1,00,00,000) multiplied by 1,00,000, which gives Rs. 20,000. Recipient R1 then receives Rs. 20,000 as its share of the total input tax credit for the period.  

The relevant period here is said to be the fiscal year preceding the year credit is due for distribution. For calculating the credit share ratio, recipients should either consider turnover for that given year or,

Meaning Thereby:

• Suppose the ITC allocation by ISD distributes credit in September 2025 for the FY 2025-26 relevant period.  
• Recipients Unit A and Unit B recorded turnover during FY 2024-25 for the relevant period.  
• In this scenario, the FY 2024-25 turnover figures determine the credit proportion for Units A and B.  

This element, therefore, warrants the reliance on current financial data in the credit distribution process. This equally supports the fair and proportionate sharing of the credit according to the economic activities occurring during that period.

(b) Clause b applies when no turnover exists in the preceding financial year for some or all recipients. Then, the last available quarter turnover details before the distribution month determine the credit share.  

Assuming the ISD credit disbursement for this period in August 2025, Future Year 2025-26 meant that Unit A and Unit B have not made any turnover in their respective states during the last financial year 2024-25. However, the last financial year has some turnover figures for the quarter of January-March, as it is the last financial year. The same must be applied to compute each, especially the recipient credit share of the distributor, using those quarter figures. 

This rule requires that input credit shares reflect actual turnover for fair ITC allocation by ISD among recipients. It applies the same quarter data to all units, even if some units had no sales in the prior year.  

Conclusion 

The rule, effective 1 April 2025, makes ISD registration mandatory for all input service credit distributions. This change shifts the framework from optional to compulsory for businesses with multiple state registrations. Rule 39 guides the distribution formula, but application clarity remains needed for varied business models. Firms must adapt their processes promptly to align with the new ITC Allocation by ISD requirements. Stakeholders should track official guidance updates for consistent compliance through precise monthly turnover-based allocations.

Non-residents pay higher TDS and TCS rates. The taxation rates for lottery, winnings, and particular capital gains are equal to 30%. But, Section 194LB of infrastructure bond interest and Section 194LC of foreign currency loans attract 5% to 4% and 9%, respectively, tax. Section 195 applies to diverse income payments that attract 10% and 30% based on income. The TCS mechanism requires payments for liquor, timber, and scrap to be taxed at different rates, between 1% and 5%. There is 1% for the sale of automobiles valued over ₹10 lakh and 5%-20% for overseas travel packages. There is a 20% tax deduction for LRS foreign remittance unless it is for education or medical expenses, where the rate becomes 5%.

TDS Rates for Financial Year 2025-26

Assessment Year 2026-27

Where the Recipient is a Resident

Assessment Year 2026-27

Where the Recipient is Non-Resident

INDIVIDUAL/HUF/AOP/BOI/AJP

TCS Rates for Financial Year 2025-26

Assessment Year 2026-27

Rates of Tax Collected at Source