ITR-3 Form – what's ITR3 & the way to file ITR-3

What is the ITR-3 Form?

The ITR 3 is applicable for individual and HUF who have income from profits and gains from business or profession. The persons having income from following sources are eligible to file ITR 3 :
• aCarrying on a business or profession (both tax audit and non-audit cases)
• The return may include income from House property, Salary/Pension, capital gains and Income from other sources

    Overview

    Note:

    The maturity for filing ITR-3 just in case of a taxpayer subject to tax audit has been extended to 15th February 2021 from 31 January 2021 for the AY 2020-21 (FY 2019-20). The maturity for furnishing tax audit report is extended to 15th January 2021 from 31st December 2020.

    The threshold limit of Rs 1 crore for a tax audit is proposed to be increased to Rs 5 crore with effect from AY 2020-21 (FY 2019-20) if the taxpayer’s cash receipts are limited to five of the gross receipts or turnover, and if the taxpayer’s cash payments are limited to five of the mixture payments.

    What is the structure of the ITR-3 Form for AY 2021-22?

    ITR-3 is split into:

    1. Part A
    2. Part A-GEN: General information and Nature of Business
    3. Part A-BS: record as of March 31, 2020, of the Proprietary Business or Profession
    4. Part A- Manufacturing Account: Manufacturing Account for the fiscal year 2020-21
    5. Part A- Trading Account: Trading Account for the fiscal year 2020-21
    6. Part A-P&L: Profit and Loss for the fiscal year 2020-21
    7. Part A-OI: Other Information (optional during a case not responsible for audit under Section 44AB)
    8. Part A-QD: Quantitative Details (optional during a case not responsible for audit under Section 44AB)

    After this, there are the subsequent schedules.

    1. Schedule-S: Computation of income under the top Salaries.
    2. Schedule-HP: Computation of income under the top Income from House Property
    3. Schedule BP: Computation of income from business or profession
    4. Schedule-DPM: Computation of depreciation on plant and machinery under the Income-tax Act
    5. Schedule DOA: Computation of depreciation on other assets under the Income-tax Act
    6. Schedule DEP: Summary of depreciation on all the assets under the Income-tax Act
    7. Schedule DCG: Computation of deemed capital gains on the sale of depreciable assets
    8. Schedule ESR: Deduction under section 35 (expenditure on scientific research)
    9. Schedule-CG: Computation of income under the top Capital gains.
    10. Schedule 112A: Details of Capital Gains where section 112A is applicable
    11. Schedule 115AD(1)(b)(iii)Proviso: For Non Residents Details of Capital Gains where section 112A is applicable
    12. Schedule-OS: Computation of income under the top Income from other sources.
    13. Schedule-CYLA-BFLA: Statement of income after depart of current year’s losses and Statement of income after depart of unabsorbed loss brought forward from earlier years.
    14. Schedule-CYLA: Statement of income after depart of current year’s losses
    15. Schedule BFLA: Statement of income after depart of unabsorbed loss brought forward from earlier years.
    16. Schedule CFL: Statement of losses to be carried forward to future years.
    17. Schedule- UD: Statement of unabsorbed depreciation.
    18. Schedule ICDS: Effect of Income Computation Disclosure Standards on Profit
    19. Schedule- 10AA: Computation of deduction under section 10AA.
    20. Schedule 80G: Statement of donations entitled for deduction under section 80G.
    21. Schedule RA: Statement of donations to research associations etc. entitled for deduction under section 35(1)(ii) or 35(1)(iia) or 35(1)(iii) or 35(2AA)
    22. Schedule- 80IA: Computation of deduction under section 80IA.
    23. Schedule- 80IB: Computation of deduction under section 80IB.
    24. Schedule- 80IC/ 80-IE: Computation of deduction under section 80IC/ 80-IE.
    25. Schedule VI-A: Statement of deductions (from total income) under Chapter VIA.
    26. Schedule AMT: Computation of Alternate Minimum Tax Payable under Section 115JC
    27. Schedule AMTC: Computation of decrease under section 115JD
    28. Schedule SPI: Statement of income arising to spouse/ minor child/ son’s wife or the other person or association of persons to be included within the income of the assessee in Schedules-HP, BP, CG and OS.
    29. Schedule SI: Statement of income which is chargeable to tax at special rates
    30. Schedule-IF: Information regarding partnership firms during which assessee may be a partner.
    31. Schedule EI: Statement of Income not included in total income (exempt incomes)
    32. Schedule PTI: undergo income details from a business trust or investment fund as per section 115UA, 115UB
    33. Schedule TPSA: Secondary adjustment to transfer price as per section 92CE(2A)
    34. Schedule FSI: Details of income from outside India and tax relief
    35. Schedule TR: Statement of tax relief claimed under section 90 or section 90A or section 91.
    36. Schedule FA: Statement of Foreign Assets and income from any source outside India.
    37. Schedule 5A: Information regarding apportionment of income between spouses governed by Portuguese Civil Code
    38. Schedule AL: Asset and Liability at the top of the year(applicable where the entire income exceeds Rs 50 lakhs)
    39. Schedule GST: Information regarding turnover/ Gross receipt reported for GST
    40. Part B-TI: Computation of Total Income.
    41. Part B-TTI: Computation of liabilities on total income.
    42. Verification

    What is the structure of the ITR-3 Form for AY 2020-21?

    ITR-3 is split into:

    1. Part A
    2. Part A-GEN: General information and Nature of Business
    3. Part A-BS: record as of March 31, 2020, of the Proprietary Business or Profession
    4. Part A- Manufacturing Account: Manufacturing Account for the fiscal year 2020-21
    5. Part A- Trading Account: Trading Account for the fiscal year 2020-21
    6. Part A-P&L: Profit and Loss for the fiscal year 2020-21
    7. Part A-OI: Other Information (optional during a case not responsible for audit under Section 44AB)
    8. Part A-QD: Quantitative Details (optional during a case not responsible for audit under Section 44AB)

    After this, there are the subsequent schedules.

    1. Schedule-S: Computation of income under the top Salaries.
    2. Schedule-HP: Computation of income under the top Income from House Property
    3. Schedule BP: Computation of income from business or profession
    4. Schedule-DPM: Computation of depreciation on plant and machinery under the Income-tax Act
    5. Schedule DOA: Computation of depreciation on other assets under the Income-tax Act
    6. Schedule DEP: Summary of depreciation on all the assets under the Income-tax Act
    7. Schedule DCG:  Computation of deemed capital gains on the sale of depreciable assets
    8. Schedule ESR: Deduction under section 35 (expenditure on scientific research)
    9. Schedule-CG: Computation of income under the top Capital gains.
    10. Schedule 112A: Details of Capital Gains where section 112A is applicable
    11. Schedule 115AD(1)(b)(iii)Proviso: For Non Residents Details of Capital Gains where section 112A is applicable
    12. Schedule-OS: Computation of income under the top Income from other sources.
    13. Schedule-CYLA-BFLA: Statement of income after depart of current year’s losses and Statement of income after depart of unabsorbed loss brought forward from earlier years.
    14. Schedule-CYLA: Statement of income after depart of current year’s losses
    15. Schedule BFLA: Statement of income after depart of unabsorbed loss brought forward from earlier years.
    16. Schedule CFL: Statement of losses to be carried forward to future years.
    17. Schedule- UD: Statement of unabsorbed depreciation.
    18. Schedule ICDS: Effect of Income Computation Disclosure Standards on Profit
    19. Schedule- 10AA: Computation of deduction under section 10AA.
    20. Schedule 80G: Statement of donations entitled for deduction under section 80G.
    21. Schedule RA: Statement of donations to research associations etc. entitled for deduction under section 35(1)(ii) or 35(1)(iia) or 35(1)(iii) or 35(2AA)
    22. Schedule- 80IA: Computation of deduction under section 80IA.
    23. Schedule- 80IB: Computation of deduction under section 80IB.
    24. Schedule- 80IC/ 80-IE: Computation of deduction under section 80IC/ 80-IE.
    25. Schedule VI-A: Statement of deductions (from total income) under Chapter VIA.
    26. Schedule AMT: Computation of Alternate Minimum Tax Payable under Section 115JC
    27. Schedule AMTC: Computation of decrease under section 115JD
    28. Schedule SPI: Statement of income arising to spouse/ minor child/ son’s wife or the other person or association of persons to be included within the income of the assessee in Schedules-HP, BP, CG and OS.
    29. Schedule SI: Statement of income which is chargeable to tax at special rates
    30. Schedule-IF: Information regarding partnership firms during which assessee may be a partner.
    31. Schedule EI: Statement of Income not included in total income (exempt incomes)
    32. Schedule PTI: undergo income details from a business trust or investment fund as per section 115UA, 115UB
    33. Schedule TPSA: Secondary adjustment to transfer price as per section 92CE(2A)
    34. Schedule FSI: Details of income from outside India and tax relief
    35. Schedule TR: Statement of tax relief claimed under section 90 or section 90A or section 91.
    36. Schedule FA: Statement of Foreign Assets and income from any source outside India.
    37. Schedule 5A: Information regarding apportionment of income between spouses governed by Portuguese Civil Code
    38. Schedule AL: Asset and Liability at the top of the year(applicable where the entire income exceeds Rs 50 lakhs)
    39. Schedule GST: Information regarding turnover/ Gross receipt reported for GST
    40. Part B-TI: Computation of Total Income.
    41. Part B-TTI: Computation of liabilities on total income.
    42. Verification

    How do I file my ITR-3 Form?

    A taxpayer has got to compulsorily file ITR-3 online. The ITR-3 are often filed Online/Electronically:

    • By furnishing the return electronically under digital signature

    • By transmitting the info electronically then submitting the verification of the return in Form ITR-V

    If you submit your ITR-3 Form electronically under digital signature, the acknowledgment are going to be sent to your registered email id. you’ll also prefer to download it manually from the tax website. you’re then required to sign it and send it to the tax Department’s CPC office in Bangalore within 120 days of e-filing. Remember that ITR-3 is an annexure-less form i.e. you are doing not need to attach any documents once you send it.

    How does one send your ITR-V to the CPC Office?

    Major Changes in ITR form 3 for AY 2021-22

    Below changes are incorporated within the ITR-3 sort of the FY 2020-21:

    1. Since 1st April 2020, the recipient of the dividend are going to be susceptible to pay tax. Relevant sections like section 10(34), 10(35), 115-O, etc., are amended within the Act. Accordingly, suitable changes are incorporated within the ITR form.
    2. The taxpayers are given relief from payment of advance liabilities if the dividend isn’t received. Hence, the ITR form allows the taxpayers to enter quarterly details of dividend income in order that interest under section 234C are often computed for default in payment of advance tax.
    3. As per amendment by the Finance Bill 2021 in section 44AB, the edge limit of tax audit is increased to Rs.10 crores from Rs.5 crores if the cash payments are but 5 per cent of the entire amount of sales or turnover. The corresponding amendment is incorporated within the ITR form.
    4. The Schedule DI inserted for the AY 2020-21 to say deductions for investments or expenditures made within the extended period (1st April 2020 to 30th June 2020) is removed within the ITR sort of AY 2021-22.
    5. Schedule 112A and Schedule 115AD(1)(b)(iii) proviso are modified with a further column to say the small print of nature of securities transferred for the resultant capital gains tax under section 112A or section 115AD(1)(b)(iii) of the tax Act. The schedules also are modified to enable the taxpayer to offer information for the sale price, fair market price and therefore the cost of acquisition of the safety .
    6. Part-A General Information is modified where the taxpayer is given to settle on the choice option of latest tax regime under section 115BAC.
    7. The taxpayer having income from business or profession and choosing an alternate tax regime is required to say the date of filing Form no.10-IE and its acknowledgement number.

    Major Changes in ITR form 3 for AY 2020-21

    1. The taxpayer should disclose
    2. the amount of money deposits above Rs 1 crore within the current accounts with a bank,
    3. expenditure incurred above Rs 2 lakh on foreign travel
    4. expenditure incurred above Rs 1 lakh on electricity.
    5. In case a private may be a director during a company or holds unlisted equity investments, the ‘type of company’ should even be disclosed.
    6. In case of short-term or future capital gains from sale of land or building or both, the small print of the buyer(s) i.e. name, PAN or Aadhaar, percentage share of ownership and address need to tend .
    7. A separate schedule 112A for the calculation of the long-term capital gains on the sale of equity shares or units of a business trust which are susceptible to STT.
    8. Under ‘income from other sources’, a taxpayer should provide the small print of ‘any other income’.
    9. The details of the deductions against ‘income from other sources’ should be provided.
    10. The ‘Schedule VI-A’ for tax deductions is amended to incorporate deduction under section 80EEA and section 80EEB.
    11. In the case of a business trust or investment fund, the small print of ‘capital gains’ income and ‘dividend’ income should be provided.
    12. The details of tax on secondary adjustments to transfer price under section 92CE(2A).
    13. The details of tax write-off claims for investments or payments or expenditure made between 1 April 2020 until 30 June 2020.
    14. While providing the small print of bank accounts, if a taxpayer selects multiple bank accounts for credit of refund, the tax department may choose any account for processing the refund.

    Major Changes in ITR form 3 for AY 2019-20

    • The field for residential status has been categorized into “Residential status in India (for Individuals)” and “Residential status in India (for HUF)”.In case of “Residential status in India (for Individuals)”, the three sub-categories – “Resident”, “Resident but not Ordinarily Resident’ and “Non-resident”, are mentioned requiring the individual to tick the precise category to which they belong. Taxpayers need to mention the amount of days of residency in India. Further, within the case of non-resident, a private is additionally required to specify the jurisdiction(s) of residence during the previous year providing the Taxpayer Identification Number(s) of the relevant jurisdictions. Also, just in case the individual may be a Citizen of India or an individual of Indian Origin (PIO), the duration of stay in India during the previous year (in days) and therefore the duration of stay in India during the 4 preceding years (in days).
    • In a case where the ITR is filed by a representative assessee, additional information about the capacity of the representative assessee (by way of choice during a sink provided) has got to tend .
    • An individual taxpayer has got to give information about the Directorship held in any company during the previous year, also mentioning whether the shares are listed or unlisted.
    • An individual taxpayer has got to give information about the investment in unlisted equity shares and therefore the movement in such investment throughout the year.
    • An individual taxpayer who may be a partner during a Firm has got to disclose details of name and PAN of the Partnership firm.
    • Partners of partnership firms as against ITR 2 will need to file their returns in ITR 3.
    • Details of computation of presumptive income under section 44AD, 44ADA and 44AE.
    • Under Part A-OI, disclose amount of expenditure disallowed u/s 14A.
    • The break-up of all exempt allowances and deductions under Schedule S – Details of income from salary.
    • In Schedule HP, under details of income from house property, the PAN of the tenant just in case TDS credit is claimed.
    • In Schedule OS, under the other income chargeable at special rate, taxpayer has got to provide the small print for every income mentioned therein e.g., interest income, income from units etc.Also, Information has got to be provided about accrual/ receipt of income from other sources e.g., winnings from lotteries, crossword puzzles, betting etc for the aim of calculation of interest under section 234C.
    • In Schedule 80G, bifurcation of donation qualifying for deduction under section 80G into cash and other mode. Similar disclosure to be made under Schedule RA for donations made to research associations under section 35.
    • In Schedule VI-A, introduction of section 80TTB deduction for oldster .
    • In Schedule FA, below details, if held during the year:Foreign Depository Accounts (including beneficial interest) Foreign Custodial Accounts (including beneficial interest) Foreign Equity and Debt Interest (including beneficial interest) Foreign cash value insurance contract or Annuity Contract held (including beneficial interest)
    • In Schedule GST, Information regarding turnover / Gross receipt reported for GST

    ITR 3 for AY 2018-19

    ITR-3 is split into:

    • Part A
    • Part A-GEN: General information and Nature of Business
    • Part A-BS: record as of March 31, 2017, of the Proprietary Business or Profession
    • Part A-P&L: Profit and Loss for the fiscal year 2016-17
    • Part A-OI: Other Information (optional during a case not responsible for audit under Section 44AB)
    • Part A-QD: Quantitative Details (optional during a case not responsible for audit under Section 44AB)
    • Part B: Outline of the entire income and tax computation in respect of income chargeable total tax.
    • Verification
    • Tax Payments: Details of advance tax, TDS, self-assessment tax.

     

    After this, there are the subsequent schedules.

    • Schedule-S: Computation of income under the top Salaries.
    • Schedule-HP: Computation of income under the top Income from House Property
    • Schedule BP: Computation of income from business or profession.
    • Schedule-DPM: Computation of depreciation on plant and machinery under the Income-tax Act
    • Schedule DOA: Computation of depreciation on other assets under the Income-tax Act
    • Schedule DEP: Summary of depreciation on all the assets under the Income-tax Act
    • Schedule DCG: Computation of deemed capital gains on the sale of depreciable assets
    • Schedule ESR: Deduction under section 35 (expenditure on scientific research)
    • Schedule-CG: Computation of income under the top Capital gains.
    • Schedule-OS: Computation of income under the top Income from other sources.
    • Schedule-CYLA: Statement of income after depart of current year’s losses
    • Schedule BFLA: Statement of income after depart of unabsorbed loss brought forward from earlier years.
    • Schedule CFL: Statement of losses to be carried forward to future years.
    • Schedule- UD: Statement of unabsorbed depreciation.
    • Schedule ICDS: Effect of Income Computation Disclosure Standards on Profit.
    • Schedule- 10AA: Computation of deduction under section 10AA.
    • Schedule 80G: Statement of donations entitled for deduction under section 80G.
    • Schedule- 80IA: Computation of deduction under section 80IA.
    • Schedule- 80IB: Computation of deduction under section 80IB.
    • Schedule- 80IC/ 80-IE: Computation of deduction under section 80IC/ 80-IE.
    • Schedule VIA: Statement of deductions (from total income) under Chapter VIA.
    • Schedule AMT: Computation of Alternate Minimum Tax Payable under Section 115JC.
    • Schedule AMTC: Computation of decrease under section 115JD.
    • Schedule SPI: Statement of income arising to spouse/ minor child/ son’s wife or the other person or association of persons to be included within the income of assessee in Schedules-HP, BP, CG and OS.
    • Schedule SI: Statement of income which is chargeable to tax at special rates
    • Schedule-IF: Information regarding partnership firms during which assessee may be a partner.
    • Schedule EI:  Statement of Income not included in total income (exempt incomes)
    • Schedule PTI: undergo income details from a business trust or investment fund as per section 115UA, 115UB
    • Schedule FSI: Details of income from outside India and tax relief
    • Schedule TR: Statement of tax relief claimed under section 90 or section 90A or section 91.
    • Schedule FA: Statement of Foreign Assets.
    • Schedule 5A: Information regarding apportionment of income between spouses governed by Portuguese Civil Code

    Benefits of Private Limited Company

    A. Quoting of Aadhaar Number

    Now, it’s mandatory to say the Aadhaar number within the return of income or Aadhaar Enrolment ID if applied for. Declaration of the worth of assets and liabilities by Individuals/HUF earning above Rs 50 lakhs in Schedule ‘AL’ Taxpayers are required to disclose the worth of assets and liabilities if their total income exceeds Rs. 50 lakhs and mention the value of immovable property with details of address, jewellery, bullion, vehicles with details of movable assets, shares, bank and cash balance, etc.

    B. Disclosure of unexplained income and Dividend Income

    New fields are inserted in schedule ‘OS’ to declare unexplained credit or investment and dividend received from domestic companies above Rs 10 lakhs. Such persons cannot choose ITR 1 Sahaj.

    C. Disclosure of GST related details

    In the Profit and Loss schedule, the GST related details need to be disclosed.

    D. Limitation on claim for depreciation

    A limitation of maximum 40% is placed on depreciation altogether depreciation related Schedules.

    E. Partners filing of tax return

    Partners of partnership firms need to file returns in ITR 3 as against ITR 2

    F. Option to select section 115H

    In the general information tab, an choice to select section 115H (who may be a non-resident Indian in any previous year, becomes assessable as a resident in India in respect of the entire income of any subsequent year) has been added.

    Major Changes in ITR form 3 for AY 2018-19

    1. In the overall information tab, an choice to select section 115H (who may be a non-resident Indian in any previous year, becomes assessable as a resident in India in respect of the entire income of any subsequent year) has been added.
    2. In the Profit and Loss schedule, the GST related details are added Limitation of maximum 40% depreciation altogether depreciation related Schedules
    3. Partners of partnership firms as against ITR 2 will need to file their returns in ITR 3.

    How to fill out the verification document?


    While filling up the info within the tax return, a taxpayer should also refill the verification. Please note that a person making a falsehood within the return or in any of the accompanying schedules shall be susceptible to be prosecuted under section 277 of the Income-tax Act, 1961 and on conviction be punishable thereunder section with rigorous imprisonment and with fine.

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