A comprehensive guide to understanding the ITR-3 Form
Updated on
Budget 2021 update: The ‘Tax Audit’ limit under Section 44AB has been increased from Rs.10 crores to Rs.5 crores where 95% of business transactions are done in digital mode.
Budget 2021 update :Taxpayers need to pay advance tax on dividend income only after the declaration or payment of dividend.
This page contains information on filing ITR-3 for FY 2019-20 (AY 2020-21) and FY 2018-19 (AY 2019-20)
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 :
a. Carrying on a business or profession (both tax audit and non-audit cases)
b. The return may include income from House property, Salary/Pension, capital gains and Income from other sources
NOTE: (1) The due date for filing ITR-3 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 due date for furnishing tax audit report is extended to 15th January 2021 from 31st December 2020.
(2) 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 5% of the gross receipts or turnover, and if the taxpayer’s cash payments are limited to 5% of the aggregate payments.
2. What is the structure of the ITR-3 Form for AY 2020-21?
ITR-3 is divided into:
Part A
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)
After this, there are the following schedules.
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)Provison: 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 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 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
3. How do I file my ITR-3 Form?
A taxpayer has to compulsorily file ITR-3 online.The ITR-3 can be filed Online/Electronically:
By furnishing the return electronically under digital signature
By transmitting the data electronically and then submitting the verification of the return in Form ITR-V
If you submit your ITR-3 Form electronically under digital signature, the acknowledgement will be sent to your registered email id. You can also choose to download it manually from the income tax website. You are then required to sign it and send it to the Income 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 do not have to attach any documents when you send it.
How do you send your ITR-V to the CPC Office?
We have a guide to help you print and send your ITR-V to the CPC office.
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The taxpayer should disclose (a) the amount of cash deposits above Rs 1 crore in the current accounts with a bank, (b) expenditure incurred above Rs 2 lakh on foreign travel (c) expenditure incurred above Rs 1 lakh on electricity.
In case an individual is a director in a company or holds unlisted equity investments, the ‘type of company’ should also be disclosed.
director holding unlisted equitydetails of unlisted equity
In case of short-term or long term capital gains from sale of land or building or both, the details of the buyer(s) i.e. name, PAN or Aadhaar, percentage share of ownership and address have to be given.
PAN Aadhaar of buyer ITR-3
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 liable to STT.
schedule 112A ITR-3
Under ‘income from other sources’, a taxpayer should provide the details of ‘any other income’.
details of other income
The details of the deductions against ‘income from other sources’ should be provided.
deduction from other income
The ‘Schedule VI-A’ for tax deductions is amended to include deduction under section 80EEA and section 80EEB.
schedule VI-A 80EEA
In the case of a business trust or investment fund, the details of ‘capital gains’ income and ‘dividend’ income should be provided.
Business trust and investment fund capital gains
The details of tax on secondary adjustments to transfer price under section 92CE(2A).
secondary adjustment to transfer price
The details of tax deduction claims for investments or payments or expenditure made between 1 April 2020 until 30 June 2020.schedule DI
While providing the details of bank accounts, if a taxpayer selects multiple bank accounts for credit of refund, the income tax department may choose any account for processing the refund.
details of bank account
5. Major Changes in ITR form 3 for AY 2019-20
The field for residential status has been categorised into “Residential status in India (for Individuals)” and “Residential status in India (for HUF)”.In case of “Residential status in India (for Individuals)”, the 3 sub-categories – “Resident”, “Resident but not Ordinarily Resident’ and “Non-resident”, have been mentioned requiring the individual to tick the specific category to which they belong. Taxpayers have to mention the number of days of residency in India.Further, in the case of non-resident, an individual is also required to specify the jurisdiction(s) of residence during the previous year providing the Taxpayer Identification Number(s) of the relevant jurisdictions. Also, in case the individual is a Citizen of India or a Person of Indian Origin (PIO), the duration of stay in India during the previous year (in days) and 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 in a drop down provided) has to be given.
An individual taxpayer has 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 to give information about the investment in unlisted equity shares and the movement in such investment throughout the year.
An individual taxpayer who is a partner in a Firm has to disclose details of name and PAN of the Partnership firm.
Partners of partnership firms as against ITR 2 will have 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 in case TDS credit is claimed.
In Schedule OS, under any other income chargeable at special rate, taxpayer has to provide the details for each income mentioned therein e.g., interest income, income from units etc.Also, Information has to be provided about accrual/ receipt of income from other sources e.g., winnings from lotteries, crossword puzzles, betting etc for the purpose 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 senior citizen.
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
5. ITR 3 for AY 2018-19
ITR-3 is divided into:
Part A
Part A-GEN: General information and Nature of Business
Part A-BS: Balance Sheet as of March 31, 2017, of the Proprietary Business or Profession
Part A-P&L: Profit and Loss for the Financial Year 2016-17
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)
Part B: Outline of the total 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 following schedules.
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-OS: Computation of income under the head Income from other sources.
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- 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 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 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 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 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
Schedule AL: Asset and Liability at the end of the year(applicable where the total income exceeds Rs 50 lakhs)
6. What is the structure of the ITR-3 Form for AY 2018-19?
1.Quoting of Aadhaar Number
Now, it is mandatory to mention the Aadhaar number in the return of income or Aadhaar Enrolment ID if applied for.
2. Declaration of the value of assets and liabilities by Individuals/HUF earning above Rs 50 lakhs in Schedule ‘AL’
Taxpayers are required to disclose the value of assets and liabilities if their total income exceeds Rs. 50 lakhs and mention the cost of immovable property with details of address, jewellery, bullion, vehicles with details of movable assets, shares, bank and cash balance, etc.
3. Disclosure of unexplained income and Dividend Income
New fields have been inserted in schedule ‘OS’ to declare unexplained credit or investment and dividend received from domestic companies above Rs 10 lakhs. Such persons cannot opt for ITR 1 Sahaj.
4. Disclosure of GST related details
In the Profit and Loss schedule, the GST related details have to be disclosed.
5. Limitation on claim for depreciation
A limitation of maximum 40% is placed on depreciation in all depreciation related Schedules.
6. Partners filing of income tax return
Partners of partnership firms have to file returns in ITR 3 as against ITR 2
7. Option to select section 115H
In the general information tab, an option to select section 115H (who is a non-resident Indian in any previous year, becomes assessable as a resident in India in respect of the total income of any subsequent year) has been added.
7. Major Changes in ITR form 3 for AY 2018-19
1.In the general information tab, an option to select section 115H (who is a non-resident Indian in any previous year, becomes assessable as a resident in India in respect of the total income of any subsequent year) has been added.2.In the Profit and Loss schedule, the GST related details have been added
Limitation of maximum 40% depreciation in all depreciation related Schedules4.Partners of partnership firms as against ITR 2 will have to file their returns in ITR 3.
8. How to fill out the verification document?
While filling up the data in the income tax return, a taxpayer should also fill up the verification. Please note that any person making a false statement in the return or in any of the accompanying schedules shall be liable to be prosecuted under section 277 of the Income-tax Act, 1961 and on conviction be punishable under that section with rigorous imprisonment and with fine.Frequently asked Questions:
I am an individual who has income from business and have opted for presumptive taxation.
ITR 3 is applicable for me ?
AnsNo, if you are opting for presumptive taxation of business or profession ITR3 is not applicable for you. ITR 4 will be applicable for you.
ITR-3 is applicable for all assessees having business income ?
AnsNo, ITR-3 will be applicable for Individuals or HUF having business and profession income not chargeable under presumptive taxation.
