ITR-3: Income Tax Return Form 3 is available for Assessment Year (AY) 2020-21 relating to Financial Year (FY) 2019-20. ITR 3 with other ITRs alongwith manner of furnishing the Return of Income for AY 2020-21 / FY 2019-20 is been notified by CBDT vide Notification No. 31/2020 dated 29.05.2020. This Income Tax Return form is used by Doctors, Chartered Accountants, manufacturer, traders etc, if not opting presumptive taxation scheme.
Who can file ITR-3?
Form ITR-3 can be used by an Individual or HUF who is having Income from PGBP (Profits and Gains from Business and Profession) and who is not eligible to file form ITR-1, ITR-2 or ITR-4. It is also used by persons having following Income-
- Person having Business or Profession
- Any Individual Director in a Company
- Any Investment in Unlisted equity shares at any time during the year
- Income under ITR 3 form may include Income from House property, Salary, Pension, Capital Gain and Income from Other Source
- Income of a person as a Partner in the firm or LLP.
Read Also: Income Tax Rate For AY- 2020-2021/ FY- 2019-2020
What is the Due date of ITR-3?
Due date for filling return of income for FY 2019-2020 has been extended to 30th November, 2020.
What are the details required in Income tax return form?
The details required in ITR-3 are generally divided into 2 parts-
Part-A – (1) General
It includes details such as PAN, Name, Date of Birth, Aadhar number, Nature of employment, if Return filed in response to notice then some details related to that has to be provided.
In case of Individuals/HUF, Residential status has to be provided such as Resident/Resident but not ordinary resident/Non Resident. In case of Non Resident details of Jurisdiction of residence has to be provided. Further, it requires details of representative assesse such as name, capacity, address and PAN if return has been filed by such person. Also, if person is a director in a company then details such as Name of Company, Type of Company, PAN, etc. has to be provided.
Further, details are to be provided with respect to Directorship or partnership, if any at any time during the year and Unlisted equity shares held at any time during the year. The form also ask for details of Non-resident having Permanent establishment in India and if any assessee is located at IFSC (International Financial Service Centre) deriving income solely in convertible foreign exchange.
In Audit information column, following details are to be provided-
- Assess liable to maintain Books of Accounts as per section 44AA of Income tax. Read more: Books of Accounts -Section 44AA of Income Tax Act, 1961
- Assess liable to Audit as per section 44AB of Income tax. Read more: FAQs on Income Tax Audit under section 44AB of Income Tax Act, 1961
- Assess liable to Audit u/s section 92E of Income tax
- Assess liable to Audit under any other Act
Lastly, details are to be provided with respect to nature of business, if more than one business and profession income that has been declared under presumptive taxation.
Read Also: Partner’s Remuneration, salary & Interest on capital – Section 40b under Income Tax Act
Part-A (2) Financial Statement
This part include Balance Sheet, Profit and Loss account, Trading account, Manufacturing account showing Cost of goods produced which is transferred to trading account. If assessee have another business then Details with respect to Computation of Presumptive income u/s 44AD(Business), 44ADA(Profession), 44AE(Goods Carriage) are also to be provided.
In case no books of accounts are required to be maintained then some details are to be provided such as Gross receipts, expenses, net profit and income from speculative business.
Part-B (3) Other Information
It has to be mandatorily filled if assessee is liable to audit u/s 44AB and includes following details, however, such details shall be easily available in form 3CD which is annexure to form 3CA/3CB-
- Method of accounting employed
- Change in accounting method
- Increase/decrease in profit/loss due to ICDS
- Method of valuation of closing stocks
- Expenses/incomes allowed and disallowed
- Amount of tax that is outstanding, etc.
- Quantitative details of Opening stock, Closing stock, Finished products/By products
Read Also: TDS on Cash Withdrawal w.e.f 1st July 2020- simplified with examples
Schedules of ITR 3
- Schedule S provides for details of Salary income, deductions, etc. which can be gathered from form 16. Apart from basic details it also requires name/ address/ TAN of Employer, city, state, etc.
- Schedule HP calculate Income from House property which includes details such as ownership of property, co-owner, address of property, PAN of tenants, Pass through income, if any etc.
- Schedule BP calculate Income from Business and Profession such as Speculative Business, Specified business, etc. P/L account in this schedule further requires details such as income/expense-allowed/disallowed, exempt income, deductions allowed, etc. It also shows intra head set off of business loss of current year.
- Schedule DPM/ DOA/DEP provides for depreciation on Assets of the entity.
- Schedule DCG requires details to be submitted with respect to deemed capital gains on sale of depreciable asset.
- Schedule ESR requires details of expenditure on scientific research.
Read Also: Income tax on Agriculture Income with examples
- Schedule CG requires details of Capital Gains on sale of asset, equity shares, etc. showing further details through bifurcation into short term and long term capital gains, deductions against capital gains etc., set off of current year capital loss with current year capital gains, etc.
- Schedule OS requires details to be provided with respect to income from other source like Interest, Dividend, special rates income, etc.
- Schedule CYLA/BFLA require current year loss set off against current year Income and brought forward loss of earlier years set off against current year income.
- Schedule CFL require details of losses to be carried forward to next years.
- Schedule ICDS shows the quantitative effect of income computation disclosure standard on profit.
- Schedule 10AA shows deductions taken in respect of unit in Special economic zone on exports.
- Schedule 80G requires details of donations entitled for deductions upto 100%/50% with and without qualifying limit.
Read Also: NPS Tier II Tax Saver Scheme 2020 – Benefits
- Some specific deductions are also required to be submitted under Schedule 80-IA, Schedule 80-IB, Schedule 80-IC or Schedule 80-IE, if any.
- Schedule VI-A shows details with respect to deductions available under section 80C, 80CCC, 80CCD, 80CCG, 80D, 80DD, 80DDB, 80G, 80IA, 80IB, 80JJAA etc.
- Schedule AMT/AMTC calculates Alternate Minimum tax payable u/s 115 JC and Tax credit.
- Schedule SPI is for income of specified income like son, spouse, daughter which is includible in the total income of assessee.
- Schedule SI is for details of special rates of Income.
- Schedule IF requires details with respect to partnership firm in which assessee was partner.
- Schedule PTI/EI is for Pass through Income under capital gains and income exempt.
- Schedule FSI requires details to be provided with respect to income earned from outside India and tax relief available to the assessee with respect to same under DTAA.
- Other schedules with respect to foreign assets and foreign income is Schedule FA.
- Schedule GST is for information of turnover/gross receipt reported under GST.
Read Also: 5 Home Loan tax benefits u/s 24, 80C, 80EE, 80EEA of Income Tax Act
Part-B Total Income and Total Tax liability
This part of Income tax Return (ITR) calculates Total Income from all the heads of income after deduction and tax liability on total income. It also requires details of taxes paid such as TDS, TCS, Advance tax, self-assessment tax, etc. If assessee is having more than one bank account then details of all bank accounts are to be furnished. At the end verification is made by signing the form and details of TRP i.e. Tax Return preparer is provided, if prepared by him.
Read Also
- ITR-1 Sahaj: Who can file it | Who cannot | How to file ITR 1 online?
- ITR-2 : Who can File ITR-2 | Who cannot file | How to file ITR?
- ITR 4 Sugam – Who can file | Who cannot file ITR 4 | How to file ITR 4?
- 10 new Changes in Income Tax Return Forms for A.Y. 2020-2021
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The author of the above article is CA Rahul Gaur.
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