diff --git a/sentry_sdk/tracing_utils.py b/sentry_sdk/tracing_utils.py
index 0df1ae5bd4..fe9fe8ec36 100644
--- a/sentry_sdk/tracing_utils.py
+++ b/sentry_sdk/tracing_utils.py
@@ -180,6 +180,26 @@ def _get_frame_module_abs_path(frame):
         return None
 
 
+def _should_be_included(
+    is_sentry_sdk_frame,  # type: bool
+    namespace,  # type: Optional[str]
+    in_app_include,  # type: Optional[list[str]]
+    in_app_exclude,  # type: Optional[list[str]]
+    abs_path,  # type: Optional[str]
+    project_root,  # type: Optional[str]
+):
+    # type: (...) -> bool
+    # in_app_include takes precedence over in_app_exclude
+    should_be_included = _module_in_list(namespace, in_app_include)
+    should_be_excluded = _is_external_source(abs_path) or _module_in_list(
+        namespace, in_app_exclude
+    )
+    return not is_sentry_sdk_frame and (
+        should_be_included
+        or (_is_in_project_root(abs_path, project_root) and not should_be_excluded)
+    )
+
+
 def add_query_source(span):
     # type: (sentry_sdk.tracing.Span) -> None
     """
@@ -221,19 +241,15 @@ def add_query_source(span):
             "sentry_sdk."
         )
 
-        # in_app_include takes precedence over in_app_exclude
-        should_be_included = (
-            not (
-                _is_external_source(abs_path)
-                or _module_in_list(namespace, in_app_exclude)
-            )
-        ) or _module_in_list(namespace, in_app_include)
-
-        if (
-            _is_in_project_root(abs_path, project_root)
-            and should_be_included
-            and not is_sentry_sdk_frame
-        ):
+        should_be_included = _should_be_included(
+            is_sentry_sdk_frame=is_sentry_sdk_frame,
+            namespace=namespace,
+            in_app_include=in_app_include,
+            in_app_exclude=in_app_exclude,
+            abs_path=abs_path,
+            project_root=project_root,
+        )
+        if should_be_included:
             break
 
         frame = frame.f_back
diff --git a/tests/test_tracing_utils.py b/tests/test_tracing_utils.py
new file mode 100644
index 0000000000..239e631156
--- /dev/null
+++ b/tests/test_tracing_utils.py
@@ -0,0 +1,96 @@
+from dataclasses import asdict, dataclass
+from typing import Optional, List
+
+from sentry_sdk.tracing_utils import _should_be_included
+import pytest
+
+
+def id_function(val):
+    # type: (object) -> str
+    if isinstance(val, ShouldBeIncludedTestCase):
+        return val.id
+
+
+@dataclass(frozen=True)
+class ShouldBeIncludedTestCase:
+    id: str
+    is_sentry_sdk_frame: bool
+    namespace: Optional[str] = None
+    in_app_include: Optional[List[str]] = None
+    in_app_exclude: Optional[List[str]] = None
+    abs_path: Optional[str] = None
+    project_root: Optional[str] = None
+
+
+@pytest.mark.parametrize(
+    "test_case, expected",
+    [
+        (
+            ShouldBeIncludedTestCase(
+                id="Frame from Sentry SDK",
+                is_sentry_sdk_frame=True,
+            ),
+            False,
+        ),
+        (
+            ShouldBeIncludedTestCase(
+                id="Frame from Django installed in virtualenv inside project root",
+                is_sentry_sdk_frame=False,
+                abs_path="/home/username/some_project/.venv/lib/python3.12/site-packages/django/db/models/sql/compiler",
+                project_root="/home/username/some_project",
+                namespace="django.db.models.sql.compiler",
+                in_app_include=["django"],
+            ),
+            True,
+        ),
+        (
+            ShouldBeIncludedTestCase(
+                id="Frame from project",
+                is_sentry_sdk_frame=False,
+                abs_path="/home/username/some_project/some_project/__init__.py",
+                project_root="/home/username/some_project",
+                namespace="some_project",
+            ),
+            True,
+        ),
+        (
+            ShouldBeIncludedTestCase(
+                id="Frame from project module in `in_app_exclude`",
+                is_sentry_sdk_frame=False,
+                abs_path="/home/username/some_project/some_project/exclude_me/some_module.py",
+                project_root="/home/username/some_project",
+                namespace="some_project.exclude_me.some_module",
+                in_app_exclude=["some_project.exclude_me"],
+            ),
+            False,
+        ),
+        (
+            ShouldBeIncludedTestCase(
+                id="Frame from system-wide installed Django",
+                is_sentry_sdk_frame=False,
+                abs_path="/usr/lib/python3.12/site-packages/django/db/models/sql/compiler",
+                project_root="/home/username/some_project",
+                namespace="django.db.models.sql.compiler",
+            ),
+            False,
+        ),
+        (
+            ShouldBeIncludedTestCase(
+                id="Frame from system-wide installed Django with `django` in `in_app_include`",
+                is_sentry_sdk_frame=False,
+                abs_path="/usr/lib/python3.12/site-packages/django/db/models/sql/compiler",
+                project_root="/home/username/some_project",
+                namespace="django.db.models.sql.compiler",
+                in_app_include=["django"],
+            ),
+            True,
+        ),
+    ],
+    ids=id_function,
+)
+def test_should_be_included(test_case, expected):
+    # type: (ShouldBeIncludedTestCase, bool) -> None
+    """Checking logic, see: https://github.com/getsentry/sentry-python/issues/3312"""
+    kwargs = asdict(test_case)
+    kwargs.pop("id")
+    assert _should_be_included(**kwargs) == expected