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ITR 3

 

If an individual or Hindu Undivided Family receives income from a company or profession, they are required to file an ITR-3 form. ITR-3 cannot be filed if the individual or the Hindu undivided family receives income from being a partner in a partnership that is conducting business because in such circumstances, the individual must file ITR-2.

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Possibility of submitting ITR 3 Form

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Who can submit an ITR 3?

 

ITR 3 for is required to be filed by both individuals and HUFs who make money from their vocation or a small business. The ITR 3 Form may be utilized if the assesses income falls into one of the following categories:

  • Earnings from working a profession

  • Revenue from a private business

  • In addition to this, the returns of the business may also comprise real estate, wages or pensions, and revenue from other sources.

 

Who is not qualified to submit an ITR 3 Form?

A person or Hindu Undivided Family cannot file Form ITR 3 if they are partners in a partnership firm that is engaged in business or practice since they are only qualified to file Form ITR 2.

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Form ITR 3's structure

 

In ITR-3, there are:

Contains in Part A:

  • A-GEN: General Information and Business Nature

  • Part A-BS: Proprietary Business or Profession's Balance Sheet as of March 31, 2020

  • Manufacturing Account for the fiscal year 2019–20 is included in Part A of the Manufacturing Account.

  • Part A: Trading Account details the trading account for the 2019–20 fiscal year.

  • The Financial Year 2019–20 Part A–P&L: Profit and Loss

  • Informational Supplement A-OI (optional in a case not liable for audit under Section 44AB)

  • Quantitative Information, Part A (optional in a case not liable for audit under Section 44AB)

 

Schedules consist of:

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  • Calculation of income under the heading "Salaries" in Schedule-S.

  • Income under the heading of "Income from House Property" is computed in Schedule-HP.

  • Calculation of revenue from a company or profession in Schedule BP

  • Schedule-DPM: Depreciation computation for plant and equipment under the Income Tax Act Schedule-DOA: Depreciation computation for other assets under the Income Tax Act Schedule-DEP: Depreciation computation for all assets under the Income Tax Act Schedule-DCG: Determination of deemed capital gains on the sale of depreciable assets

  • Section 35 deduction is listed on Schedule ESR (expenditure on scientific research)

  • Schedule-CG: Income computation under the heading of capital gains.

  • Schedule 112A: Information on Capital Gains for which Section 112A Applies

  • Calendar 115AD(1) (iii)

  • Provision: Information on Capital Gains for Non-Residents under Section 112A

  • Income under the heading "Income from other sources" is computed in Schedule-OS.

  • Schedule-CYLA-BFLA: Statement of Income After Setoff of Losses for Current Year and Statement of Income After Setoff of Unabsorbed Loss Prorated from Prior Years.

  • Schedule-CYLA: Income statement following the deduction of losses for the current year

  • Schedule BFLA: Statement of income after set-off of carried-forward unabsorbed loss from prior years.

  • Schedule CFL: Losses  to be carried over to subsequent years.

  • Schedule-UD: Unabsorbed Depreciation Statement.

  • Schedule ICDS: Profit Impact from Income Computation Disclosure Standards

  • Calculation of the deduction under section 10AA is described in Schedule 10AA.

  • Statement of donations eligible for a deduction under section 80G, Schedule 80G.

  • Schedule RA: Statement of Contributions to Research Associations and Other Organizations Eligible for Section

  • Schedule RA: Statement of donations to research associations and other organisations that are eligible for a deduction under Sections 35(1)(ii), 35(1)(iiA), 35(1)(iii), or 35(1)(iiiA) (2AA)

  • Calculation of deductions under section 80IA is done in Schedule 80IA.

  • Calculation of the deduction under Section 80IB is done in Schedule 80IB.

  • Schedule 80IC/ 80-IE: Calculation of deductions under section 80IC/ 80-IE.

  • Statement of deductions from total income under Chapter VIA, found in Schedule VIA.

  • Schedule SPI-SI-IF: Information on partnership firms in which the assesse is a partner, income chargeable at special rates, and income of designated people (spouse, minor, etc.) includable in the income of the assessee.

  • Schedule AMT: Section 115JC Alternate Minimum Tax Payable Calculation

  • Calculation of the tax credit under section 115JD: Schedule AMTC

  • Schedule SPI: Income arising to Spouse, Minor Child, Son's Wife, or Any Other Person or Association Statement of income for spouse, minor child, son's wife, or any other individual or or group of individuals whose income is to be reported on Schedules HP, BP, CG, and OS by the assessee.

  • Income Statement Subject to Special Rates of Tax Schedule SI

  • Schedule-IF: Details on the partnership companies where the assessee is a partner.

  • Statement of Income on Schedule EI: Income not included in total (exempt incomes)

  • Schedule PTI: Information on pass-through income from a business trust or investment fund in accordance with Sections 115UA and 115UB

  • Schedule TPSA: Secondary adjustment to the transfer price in accordance with Section 92CE (2A)

  • Schedule FSI: Information on income earned outside of India and tax breaks

  • Schedule TR: Claim for tax relief pursuant to Section 90 or Section 90A or Section 91

  • Schedule FA: Statement of Foreign Assets and Foreign Source Income.

  • Schedule 5A: Information about the division of income between partners under the Portuguese Civil Code

  • Schedule AL: Year-end asset and liability data (applicable where the total income exceeds Rs 50 lakhs)

  • Schedule DI: Schedule of tax-saving investments, deposits, or payments to claim a deduction or exemption for the extended period of time beginning on April 1, 2020, and ending on June 30, 2020

  • Schedule GST: Details of the turnover and gross receipts reported for GST

  • Compute Total Income in Part B-TI.

  • Part B-TTI: Calculation of the tax obligation on the total income.

  • Verification.

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ITR 3 Form filing guidelines to be adhered to

 

The Form must answer the questions in the aforementioned Sections. But here is a list of crucial guidelines to bear in mind when submitting the ITR 3 Form:

  • If the Schedule does not apply to the assesse, the assesse must simply enter -NA.

  • Mention Nil if no figure is available to denote.

  • When putting a negative balance against a profit column, the "-" sign must be added before the value.

  • The figures should be rounded up to the closest rupee.

  • Rounding up to the nearest multiple of Rs. 10 should be done for both the total income and payable loss.

After completing the Section in Part A, you must complete the 23 schedules in Part B, and then you must verify the document.

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How should I submit Form ITR 3?

 

You can file the ITR 3 Form online or offline:

 Offline: A paper return with a bar code can be used to provide the returns.

Online: The returns may be provided electronically with the aid of a Digital Signature Certificate. Following the submission of the return verification, this data may be transferred.

 

When filing returns online, the assesse is required to have two printouts of the ITR 3 Form.

  • When, you may file electronic returns:

  • Whether the signing authority is situated outside of India or the assesse resides there.

  • Assessments with total revenue of more than Rs. 5 lakh must online submit their returns.

  • The schedule FSI and schedule TR that apply must be filed online by assesses who are claiming relief under Sections 90, 90A, and 91.

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ITR Form 3 for the AY 2021–2022 underwent significant changes.

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The ITR 3 Form incorporates the following changes:

From the first of April 2020, the dividend recipient will need to pay taxes. Relevant Sections, such as Sections 10(34), 10(35), and 115-O, are altered by the Act, and the ITR Form is updated to reflect these changes.

 

The taxpayers receive a payment of relief for the owed advance tax in the event that the dividend is not received. So that the interest under Section 234C for failing to pay advance tax can be calculated, the ITR Form enables the taxpayers to enter the specifics of the dividend income every quarter.

 

The threshold limit of the tax audit is raised from Rs. 5 crores to Rs. 10 crores with the changes made to section 44AB of the Finance Bill 2021 if the cash payments are less than 5% of the entire amount of sales or turnover. The ITR Form incorporates the relevant change.

 

The Schedule DI that was included for the AY 2020–2021 to claim the deduction for investments or expenses made over the extended period (from April 1–June 30, 2020) has been eliminated in the ITR Form for the AY 2021– 2022.

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With the addition of a new column, Schedules 112A and 115AD (1) (b) (iii) provisos are updated to reflect the details of the type of securities that are transferred for the purposes of the resulting capital gains tax under Sections 112A or 115 AD (1) (b) (iii) of the Income Tax Act. The schedules have also been changed to allow taxpayers to enter data on the sale price, fair market value, and purchase cost of the security.

 

General information is amended in Part A of the ITR 3 Form, and the taxpayer is given the opportunity to select the best alternative option of the new tax regime in accordance with Section 115 BAC.

 

The Assesses must state the date on which the Form 10-IE was filed and the Acknowledgement Number if they are electing an alternative tax regime and earning income from their company or profession.

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Documents Needed To File ITR-3 Return (in case of income from salary)

  • Form 16 / Salary Slips,

  • Rental Agreement, any proof of rental income, and any evidence of investments to support a claim Exemption from Tax Form 26AS

  • Daily Sales Return Details Daily Purchase Return Details Monthly Purchase Bill

  • Challan for GST Tax Paid

  • Administration costs that are incurred on a daily basis and general expenses

  • The invoice for fixed assets (if Applicable)

  • Particulars of Cash's investments

  • Information about investments made through a bank

  • Source Documentation for Cash Flows, Both Incoming and Outgoing

  • Receivables and payments that are still owing

  • Money Statement

  • Bank Statement Broken Down

  • Bank loan information Documentation of foreign income (if applicable)

  • Particulars about Foreign Assets (if applicable)

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