ITR 3 Form is applicable for the individuals and Hindu Undivided Families that earn profit and gains from business or profession.
If the individual or the Hindu undivided family is having an income as a partner of a partnership firm that is carrying out business then ITR-3 cannot be filed as in such cases the individual is required to file ITR-2.
ITR 3 For is to be filed by the individuals and the HUFs who earn income from carrying a profession or from a proprietary business. ITR 3 Form can be used when the income of the assessee falls in the categories that are mentioned below:
In case if the individual or the Hindu Undivided Family is functioning as a partner of the partnership firm that is carrying out business or profession then he cannot file form ITR 3 as he will be eligible to file Form ITR 2.
Part A includes-
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:
ITR 3 Form can be filed either offline or online:
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.
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Income tax return filing for a taxpayer with taxable income of less than Rs.25 lakhs.
all inclusive fees
Income tax return filing for a taxpayer with taxable income of less than Rs.50 lakhs.
all inclusive fees
Income tax return filing for a taxpayer with taxable income of Rs.20 lakhs to Rs.100 lakhs.
The Changes that are incorporated in the ITR 3 Form are:
The recipient of the dividend will be liable to pay taxes from 1st April 2020. Relevant Sections such as Section 10(34), 10(35), 115-O are amended in the Act and accordingly, suitable changes are incorporated in the ITR Form.
In case if the dividend is not received the taxpayers are given relief payment of advance tax liability. So the ITR Form allows the taxpayers to enter the details of the dividend income every quarter so that the interest under Section 234C can be computed for default in the payment of advance tax.
With the amendments in the Finance Bill 2021 in section 44AB the threshold limit of the tax audit is increased from Rs. 5 crores to Rs.10 crores if the cash payments are less than 5 percent of the total amount of sales or turnover. The corresponding amendment is incorporated in the ITR Form.
The Schedule DI inserted for the AY 2020-2021 to claim the deduction for the investments or expenditures that are made in the extended period ( 1st April 2020 to June 30th, 2020) is removed in the ITR Form for the AY 2021- 2022.
Schedule 112A and Schedule 115AD (1) (b) (iii) proviso are changed with an additional column to mention the details of the nature of the securities that are transferred for the resultant capital gains tax under the Section 112A or Section 115 AD (1) (b) ( iii) of the Income Tax Act. The schedules are also modified so that the taxpayers can provide information for the sale price, fair market value, and the cost of acquisition of the security.
The Part A of the ITR 3 Form has general information that is modified where the taxpayer is given to choose the best alternative option of the new tax regime under Section 115 BAC.
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.
The list of documents necessary for balance ITR 3 filing are:
Balance sheet and profit and loss statement, bank account statement, and the passbook.
No, ITR 3 will be applicable for all the individuals or the HUF that have business a professional income not chargeable under the presumptive taxation scheme.
Yes, ITR 3 filing without auditing and pay the taxes on the intraday turnover.
Income Tax Return Form 3 is for all the individuals and HUFs with income under the head profits or gains from business or profession and who are not eligible to file ITR 4 should file ITR 3.
Switching from ITR 3 to ITR 4 is not possible unless the sales are declared in 44AD. Also, if the individual gets income from two residential houses he needs to choose ITR3.
No in case the individual has opted for a presumptive taxation scheme ITR 3 is not applicable for him. He can file ITR4 instead.
Last updated: July 19, 2021