ITR 3 Form Filing

Hindu Undivided Families and individuals who get income from a business or profession are eligible to use the 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.

Eligibility for filing ITR 3 Form

Who can file ITR 3?

If a person or HUF receives income from practising a profession or running a small business, they must file Form ITR-3. When an assessee's income falls into one of the following categories, they can use the ITR 3 Form:

• Income from carrying a profession
• Income from proprietary business
• Apart from this, the returns of the business can also include the house property, the salary or pension, and the income from other sources.

Who is not eligible to file 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 practise since they are only qualified to file Form ITR 2.

Structure of Form ITR 3

ITR-3 is divided into:

Part A includes-

• Part A-GEN: General information and Nature of Business
• Part A-BS: Balance Sheet as of March 31, 2020, of the Proprietary Business or Profession
• Part A- Manufacturing Account: Manufacturing Account for the financial year 2019-20
• Part A- Trading Account: Trading Account for the financial year 2019-20
• Part A-P&L: Profit and Loss for the Financial Year 2019-20
• Part A-OI: Other Information (optional in a case not liable for audit under Section 44AB)
• Part A-QD: Quantitative Details (optional in a case not liable for audit under Section 44AB)

Schedules include:

• Schedule-S: Computation of income under the head Salaries.
• Schedule-HP: Computation of income under the head 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 head Capital gains.
• Schedule 112A: Details of Capital Gains where section 112A is applicable
• Schedule 115AD(1)(iii)Provision: For Non-Residents Details of Capital Gains where section 112A is applicable
• Schedule-OS: Computation of income under the head Income from other sources.
• Schedule-CYLA-BFLA: Statement of income after set off of current year’s losses and Statement of income after set off of unabsorbed loss brought forward from earlier years.
• Schedule-CYLA: Statement of income after set off of current year’s losses
• Schedule BFLA: Statement of income after set off 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 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)
• 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 SPI-SI-IF: Income of specified persons(spouse, minor, etc) includable in the income of the assessee, Income chargeable at special rates, info partnership firms in which assessee is a partner.
• Schedule AMT: Computation of Alternate Minimum Tax Payable under Section 115JC
• Schedule AMTC: Computation of tax credit under section 115JD
• Schedule SPI: Statement of income arising to spouse/ minor child/ son's wife or any other person or association of persons to be included in the income of the 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 in which the assessee is a partner.
• Schedule EI: Statement of Income not included in total income (exempt incomes)
• Schedule PTI: Pass-through income details from a business trust or investment fund as per section 115UA, 115UB
• Schedule TPSA: Secondary adjustment to transfer price as per section 92CE(2A)
• 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 and income from any source outside India.
• Schedule 5A: Information regarding apportionment of income between spouses governed by Portuguese Civil Code
• Schedule AL: Asset and Liability at the end of the year(applicable where the total income exceeds Rs 50 lakhs)
• Schedule DI: Schedule of tax-saving investments or deposits or payments to claim deduction or exemption in the extended period from 1 April 2020 until 30 June 2020
• Schedule GST: Information regarding turnover/ gross receipt reported for GST
• Part B-TI: Computation of Total Income.
• Part B-TTI: Computation of tax liability on total income.
• Verification

Instructions to be followed while filing ITR 3 Form

The Sections mentioned above will have to be addressed in the Form. But here is the list of important instructions that are to be followed while filing the ITR 3 Form:

1. If in case the Schedule is not applicable to the assessee, then the assessee has to just put -NA-
2. In case if there is no figure to denote, mention Nil.
3. If there is a negative balance and you are writing it against a profit column then the" - " sign needs to be added before the figure.
4. Round off the figures to the nearest one rupee.
5. The total income or the payable loss should be rounded off to the nearest multiple of Rs.10.
6. The Section in Part A needs to be filled after that 23 schedules are to be filled in Part B, Finally, you need to verify the document.

How to file ITR 3 Form?

ITR 3 Form can be filed either offline or online:

1. Offline: The returns can be furnished in a paper format through a bar-coded return.
2. Online: The returns can be furnished electronically using the Digital Signature Certificate. This data can be transmitted after submitting the verification of the return.

The assessee must have two print copies of the ITR 3 Form when he is filing the returns online.

Electronic returns can be filed when:

The assessee is a resident of India or if the signing authority is located outside India.

The assessees with more than Rs.5 lakh total income are required to furnish the returns electronically.

Assessees that are claiming relief under Section 90, 90A,91 for whom the schedule FSI and Schedule TR that applies must file the returns electronically.

Major Changes made to the ITR 3 Form for the AY 2021-2022

The Changes that are incorporated in the ITR 3 Form are:

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.

If the cash payments are less than 5% of the entire amount of sales or turnover, section 44AB of the Finance Bill 2021's modifications will raise the threshold limit for tax audits from Rs. 5 crores to Rs. 10 crores. In the ITR Form, the necessary modification is included.

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

A new column has been added to Schedule 112A and Schedule 115AD (1) (b) (iii) provisos to specify the specifics of the type of securities being transferred for the purposes of the capital gains tax resulting from the transfer under those Schedules' respective Sections 112A and 115AD (1) (b) (iii) of the Income Tax Act. Additionally, the schedules have been changed to allow taxpayers to include data on the security's sale price, fair market value, and cost of acquisition.

When the taxpayer is given the opportunity to select the best alternate choice of the new tax system under Section 115 BAC, the general information in Part A of the ITR 3 Form is updated.

The assessee that earns income from business or profession and opting for an alternative tax regime is needed to mention the date of filing the Form 10-IE and the acknowledgment number.