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Krishna Kumar
| Updated: 11 Jul, 2022 | Category: Income Tax

What is Form ITR 3, and How to File it?

Form ITR 3
Reading Time: 5 minutes

There are different categories of taxpayers in India, and each requires various forms to file ITR (Income Tax Returns). Form ITR 3 is the most difficult ITR form for taxpayers, especially non-professionals. In this write-up, we will discuss Form ITR 3.

What is Form ITR 3?

Form ITR 3 applies to the individuals and HUF (Hindu Undivided Families) who earn profit from business/profession. If the individual or HUF has an income as a partner in a partnership firm, which is carrying out business, then the person will not be required to file ITR 3; in this scenario, he must file ITR 2 Form.

Eligibility for Filing Form ITR 3

An ITR 3 Form applies to individuals and HUF whose total income for a provided assessment year includes the following:

  • Income from the business or profession is carried under a proprietorship firm, wherein the taxpayer is the proprietor.
  • Rewards are earned from winning a lottery, horseracing, or income from other sources of activities.
  • Generate income from short or long-term capital gains.
  • Earn income from one or several house properties.
  • Income assets from the way of assets in a country outside India.

Structure of a Form ITR 3

ITR 3 is briefly divided into the following sections:

  1. Part A
  2. Schedules
  3. Part B
  4. Verification

Let’s elaborate the each of these sections one by one:

  1. Part A includes-
Part A- GEN Nature of Business and General information
Part A- BS Balance Sheet of the Proprietary Profession or Business as of 31st March 2021.
Part A- Manufacturing Account Manufacturing Account for the financial year 2021-2021.
Part A- Trading Account Trading Account for the financial year 2020-2021.
Part A- Profit & Loss Profit and Loss for the Financial Year 2020-2021.
Part A- Other Details It is optional in a case not liable for audit under Section 44AB.
Part A- QD Quantitative information (it is optional in a case not liable for audit under Section 44AB).
  • Schedules include-
Schedule- S Computation of income under head Salaries.
Schedule- HP Computation of income in the head Income from the Property of House.
Schedule- BP Computation of income from profession or business.
Schedule- DOA Computation of depreciation in another asset under the Income-tax Act.
Schedule- DPM Computation of depreciation in plant and machinery under the Income-tax Act.
Schedule- DEP Summary of depreciation on all the assets in the Income-tax Act.
Schedule- DCG Computation of deemed capital gain on the sale of depreciable.
Schedule- CG Computation of income under the head of Capital gains.
Schedule- ESR expenditure on scientific research Deduction under section 35.
Schedule- 112A Information on Capital gains where section 112A is applicable.
Schedule- OS Computation of income in the head Income from other sources.
Schedule 115AD(1)(B)(iii)Proviso For Non-Resident’s information on Capital gains where section 112A is applicable.
Schedule- CYLA-BFLA Statement of income after set off current year’s losses and statement of income after set off 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- UD Statement of unabsorbed depreciation.
Schedule- CFL Statement of loss to be carried forward to future years.
Schedule- ICDS Effect of income computation disclosure standard on profit.
Schedule- 80G Statement of donations entitled for Deduction in section 80G.
Schedule- 10AA Computation of Deduction under Section 10AA.
Schedule- RA Includes information on donations to institutions entitled to deduction under Section 35(2AA), 35(1) (iia), or 35(1)(iii).
Schedule- 80IA Computation of deduction under section 80IA.
Schedule- 80IB Computation of deduction under section 80IB.
Schedule VI-A Statement of deductions (from total income) in Chapter VIA.
Schedule- 80C/ 80-IE Computation of Deduction under section 80IC/ 80-IE.
Schedule AMT Computation of Alternate Minimum Tax Payable in Section 115JC.
Schedule AMTC Analysis of tax credit under section 115JD
Schedule SI Statement of income that is chargeable to tax at special rates.
Schedule SIP Statement of income arising to spouse/ son’s wife/ minor child or any other person or association of person to be included in the assessee’s income in Schedules-HP, BP, CG, and OS.
Schedule IF Details regarding partnership firms in which the assessee is a partner.
Schedule- PTI Pass-through income information from business trust or investment fund as per sections 115UA and 115UB.
Schedule- EI Statement of income not included with total income (exempt income).
Schedule- TPSA Secondary adjustment to transfer price according to section 92CE(2A)
Schedule- TR Statement of tax relief claimed in section 90 or section 90A or section 91.
Schedule- 5A The Portuguese Civil Code governs details regarding the apportionment of income between spouses.
Schedule- FA Statement of Foreign Assets & income from any source outside India.
Schedule- FSI Information on income from outside India and tax relief.
Schedule- AL Asset & Liability at the end of the year (applicable where the total income exceeds Rs.50 Lakhs)
Schedule- GST Details regarding turnover/ gross receipt reported for GST.
Schedule- DI Schedule of tax-saving investments, deposits, or payments to claim Deduction or exemption in the extended period from 1st April 2021 until 30th June 2021.
  • Part B
  • Part B- TI: It includes the computation of a taxpayer’s total income.
  • Part B- TTI: This Section computes the tax liabilities on one’s total income.
  • Verification: Lastly, the Form ITR 3 structure guarantees to authenticate the details furnished above.

How to file Form ITR 3?

Form ITR 3 can be filed either online or offline:

  1. Online: The income tax return can be done electronically using the Digital Signature Certificate. This data can be transmitted after the submitting verification of the return.
  2. The Form ITR 3 online filing process starts with visiting the official e-filing web portal of the Income Tax Authority.
  3. You need to register an account with the portal if you are new.
  4. This portal auto-generates your PAN information. Then choose ‘Assessment Year’ for which you are filing the ITR 3 Form.
  5. Then go to the Revised Return section, if you wish to file a revised return against a previously filed original return’.
  6. Submit the online form and click on ‘Continue’.
  7. At this point, you are required to provide income details, exemptions, deductions, and investments.
  8. Then, add the details of tax payments through TDS, TCS, and/or advance tax.
  9. Remember to fill all data accurately and carefully. Additionally, periodically click on ‘save the Draft’ to avoid losing data.
  10. Select the preferred verification option from the following:
  11. Instant e-verification
  12. E-verification later but within 120 days from filing Form ITR 3.
  13. Verification through a duly signed ITR V sent to Centralised Processing Centre (CPC)[1] via post and within 120 days of filing return.
  14. Select Preview and Submit the Form.

Electronic returns can be filed when:

  • The assessee is an Indian resident, or in case the signing department is located out of India.
  • Assess those claiming relief under sections 90, 90A, and 91 for whom the schedule FSI & Schedule TR must file the returns electronically.
  • The assesses with more than Rs.5 Lakh total income must be outside India.

New Update in Form ITR 3

  • THE ITR 3 e-filing offline utility for taxpayers is now available on the income tax portal.
  • ITR 3 JSON Schema for the annual year 2022-23.
  • The Form ITR 2 validation rules V1 for the annual year 2022-23 are available on the income tax e-filing portal.
  • The income-tax authority has issued notification No. 134/2021/F.No. 1 78/4/2021-ITA related to the LIC of India for the annual year 2021-22.
  • The due date for completion of the penalty proceeding under the Act has been extended from 30th September 2021 to 31st March 2022.

What is the Due-Date for Filing the Form ITR 3?

The date due for filling an ITR is as for individuals & businesses:

  • The Annual Year 2022-2023: 31st July 2021 for Non-audit Cases and 31st October 2022 for audit Cases.
  • The Financial Year 2020- 21 (the Annual Year 2021 -22): 31st December 2021 (Revised) for Non-audit Cases and 15th March 2022 (Revised) for Audit Cases.

Conclusion

Individuals and Hindu Undivided Families who earn money from their profession or a business can use the ITR 3 Form. ITR-3 cannot be filed if an individual or a Hindu Undivided Family receives income from a business partnership.

Read our Article:Types of ITR (Income Tax Returns)

Krishna Kumar

Krishna Kumar has completed BA-LLB with a specialization in constitutional Laws from ICFAI University. As a recent graduate, He has both legal research and content writing experience in various law firms. He secures good drafting skills for various legal documents in multiple fields of law.

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