How to file ITR 3?

Income Tax Return Form 3 (ITR-3) is for individuals and HUFs who have income under the head “profits or gains from business or profession” and who are not eligible to file Form ITR-1 (Sahaj), ITR-2 or ITR-4 (Sugam). Electronic filing of the return has been made compulsory for taxpayers. However, in order to file the ITR, you need to be registered on the e-filing portal. The due date to file this return:

  • Non-audit cases is is 31st July of the next financial year
  • Audit cases is 30th September of the next financial year.

Who should file ITR-3?

The persons having income from following sources are eligible to file ITR 3 :

  • Carrying on a business or profession (both tax audit and non-audit cases)
  • Taxpayers registered under presumptive taxation scheme and having a turnover of more than 2 crore during the financial year
  • Individuals and HUFs who are partners in a firm but do not carry out business under proprietorship. Such income may include income from salary, bonus, commission, interest or remuneration from the partnership firm.
  • The return shall also include income from House property, Salary/Pension, capital gains and Income from other sources
ITR for Proprietors with Business Income
CA Assisted Income Tax Return filing for Individuals & HUFs with business income from Proprietary Firm.
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How to file ITR 3?

A taxpayer has to compulsorily file ITR-3 online from the e-filing portal of the income tax department. The ITR-3 can be filed Online/Electronically:

  • Prepare ITR 3 offline using Tax Return Preparation Utility and submit it from your Login on Income Tax Website OR
  • Further, you can also prepare and submit it online using E-Return Intermediary (ERI) like Quicko.
  • You can furnish the return electronically under digital signature or by submitting the verification of the return in Form ITR-V/or E-verifying using other modes.
  • Once e-verified using digital signature you will receive the acknowledgement receipt on their registered email id.

Structure of ITR-3

Part/ Schedule Heading Fields
PART A- GENERAL Personal Information Name, Address, Date of Birth, PAN, contact details.
Filing Status Employer Category, Tax status, Residential status, Return filed under the section.
PART B-TI Computation of total income Total Income from all income sources, Losses of the current year set off, Gross Total Income, Deductions under Chapter VI-A.
PART B-TTI Computation of tax liability on total income The Bank Account details, Verification, and TRP details (if any) are to be provided. 
Schedule IT Details of Advance Tax and Self Assessment Tax Payments BSR code, Date of Deposit, Challan number, Tax Paid
Schedule TDS TDS-1: Details of Tax Deducted at Source from SALARY TAN of Employer, Employer Name, Tax Deducted, etc.
TDS-2: Details of Tax Deducted at sources from Income other than Salary (As per FORM 16A) & Details of tax deducted at source on sale of immovable property u/s 194IA (Form 26QB) TAN, Name of Deductor, Year of Deduction, Tax deducted, etc.
Schedule TCS Details of tax collected at source TAN of the collector, Name of Collector, Tax Collected, etc.
Manufacturing Account Manufacturing Account for the financial year Fill in the opening inventory, purchases, direct wages, direct expenses, factory overheads and closing stock.
Trading Account Trading Account for Financial Year Fill up the details of Trading Account for the financial year
such as Sales/Gross receipts of business/profession, duties, taxes and cess, etc. Further, in respect of supplies, closing stock and opening stock of finished goods, purchases, direct expenses, duties/taxes etc.
P&L Profit and Loss Account for the financial year
In case you were required to maintain regular books of accounts for the proprietary business or profession, please fill up details at item No. 13 to 60. In case you are not required to maintain regular books of accounts, please fill up details at item No. 61-65 falling into respective income sections
Balance-sheet Balance Sheet as on 31st day of March Balance Sheet of the business or profession as on 31st March of the FY in respect of the proprietary business or profession
carried out. I t shall include: Creditors, Debtors, Bank balance, Fixed Assets, etc.
Schedule OI Other Information Part A-OI, contains details of allowances & disallowances under Income tax act. Fill up the information of items which are applicable.
Schedule QD Quantitative details In Part A-QD, the quantitative details of trading and manufacturing account are required to be furnished in respect of principal items.
Schedule S Details of Income from Salary Name and PAN of the Employer, Address of the Employer, Salary, Perquisites, Allowance, etc.
Schedule HP Details of Income from House Property Details of House Property, Name and PAN of the Co-owners and Tenants, Details of Rent Income, Interest payable on Borrowed Capital, etc.
Schedule BP Computation of income from business or profession Income chargeable under the head ‘Profits and gains of business or profession’ is computed starting from the net profit before taxes arrived at in the profit and loss account
Schedule DPM Depreciation on Plant and Machinery(Other than assets on which full capital expenditure is allowable as deduction under any other section)  It provides for computation of depreciation admissible under the
Income-tax Act for the year in respect of plant and machinery
Schedule DOA Depreciation on other assets Computation of depreciation admissible under the
Income-tax Act for the year in respect of other category of assets – land, building, furniture and fittings, intangible assets and ships.
Schedule DEP Summary of depreciation on assets It contains a summary of depreciation admissible under the
Income-tax Act for the year in respect of all category of assets
Schedule CG Income from Capital Gains Details about the Short term and Long term Capital gains, Sales consideration, Cost of Acquisition, Deductions under Section 54, 54B, 54EC, 54F, 54GB.
Schedule OS Income from Other Sources A dividend, Interest, Rental income from machinery, Winnings from lotteries, Crossword puzzles, Races, Games.
Schedule CYLA Details of income after set­off of current year losses Details of current year losses and its Inter Headset off
Schedule BFLA Details of income after Set off of Brought Forward Losses of earlier years Details of brought forward losses set off against current year’s income, total brought forward losses set off.
Schedule CFL Details of Losses to be carried forward to the future years Total of earlier year losses, current year losses, Total of carried forward to future years.
Schedule VI-A Deductions under Chapter VI-A Deductions under section 80C, 80CCC, 80CCG, 80D, 80DDB, 80E, 80G, 80TTA.
80G Details of Donations Name of Donee, Address, City or District, State Code, PAN of Donee, Amount.
Schedule SPI The income of specified persons (spouse, minor child, etc.) included in the income of the assessee (income of the minor child, in excess of INR 1500 per child, to be included) Name and PAN of Person, Relationship, Nature of Income, Amount.
Schedule SI Income chargeable to income tax at special rates Description of Special Rate Income, Special Rate, Income, Taxable Income after adjusting min. chargeable to tax, Tax thereon.
Schedule EI Details of Exempt Income (Income not to be included in Total Income) Interest income, Dividend, Agricultural Income.
Schedule PTI Details of Income from Business Trust or Investment Fund  Details of Income earned from Business Trust or Investment Fund as per section 115UA, 115UB. 
Schedule FSI Details of Income from outside India and tax relief A country, Head of income, Income from outside India, Tax paid outside India, Tax payable in India, Relevant article of DTAA if relief is claimed u/s 90 or 90A
Schedule TR Summary of tax relief claimed for taxes paid outside India Details of tax relief claimed
Schedule 5A Information regarding the appointment of income between spouses governed by Portuguese Civil Code Name and PAN of a spouse, Income received under different heads, Amount appointed in the hands of the spouse, TDS details.
Schedule FA Details of Foreign Assets and Income from any source outside India Details of foreign bank accounts, financial interest in any entities, Immovable Properties, Other Capital Assets.
Schedule AL Details of Assets and Liabilities Details of an immovable asset, Details of a movable asset, Interest held in the asset of a firm or AOP.
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FAQ

Can we file ITR 3 without balance sheet?

If you have business income, you need to fill Business head income(BP), Balance Sheet, Trading Account, Profit and Loss Account, Quantitative Details, Depreciation (If claimed), Deductions Chapter VI-A, Tax paid, TDS, etc. You need to check which schedules are applicable to you and fill the requisite data in it.

Is quoting of Aadhaar Number mandatory?

Yes, it is mandatory to mention the Aadhaar number in the return of income or Aadhaar Enrolment ID if applied for.

How can I download ITR 3 utility?

Follow below steps to download ITR Utility:
1. Visit Income Tax E-filing Portal
2. Go to “Income Tax Return Preparation Utilities”.
3. Select your Assessment Year.
4. Download the utility (Excel/Java)

Where do we give disclosure of unexplained income and Dividend Income?

New fields have been inserted in schedule ‘Other Sources’ to declare unexplained credit or investment and dividend received from domestic companies. Further, such persons cannot opt for ITR 1 Sahaj.

Form 10-IE – Opt for the New Tax Regime

The Finance Minister, Nirmala Sitharaman had presented the Budget 2020 on the 1st of February 2020. The introduction of the new tax regime took place in the previous budget. This regime is available only to individuals and HUF where they need to opt by using Form 10-IE.

Under the new tax regime, taxpayers can pay lesser tax on the total income with reduced tax rates. Also, taxpayers cannot claim the deductions and tax benefits otherwise available in the old tax regime.

The taxpayer has to make his/her choice before filing the Income Tax Return (ITR) of the relevant Financial Year (FY). Tax Payer also need to communicate the selection to the Income Tax Department before filing the ITR.

How to inform the IT Department which tax regime is selected?

The Central Board of Direct Taxes (CBDT) has released Form 10-IE. Any person who wish to pay income tax as per the new tax regime has to communicate his/her choice to the Income Tax Department through form 10-IE.

In case a taxpayer wants to opt-out of the new tax regime, the same form 10-IE needs to be submitted before filing the income tax returns for the relevant Financial Year (FY).

Switching between Old Tax Regime & New Tax Regime

  • Business Income
    • Individuals having business income are not eligible to choose between the new and old tax regime every year. Once they have opted for the new tax regime, they only have a one-time option of switching back to the old tax regime in their lifetime. Once they switch back, they cannot opt for new tax regime again.
    • Essentially, people with business income may have to fill Form 10-IE twice – once to use the new tax regime and the second time to switch back to the old regime.
  • No Business Income
    • An individual having salaried income and no business income has the option to choose between the old and new tax regimes every year. In case the individual does not have a business or profession income, they do not have to file the Form 10IE. Instead they can just select the option under 115BAC while filing the ITR 1 or 2.

When to submit Form 10-IE?

As per the income tax laws, an individual having business income shall submit this form before the due date of filing ITR i.e. July 31 (unless extended by the government). For salaried individuals, they can submit form before/at the time of ITR filing.

How to File Form 10IE?

  1. Log in to the income tax portal

    Login to the portal using valid credentials and navigate to e-File > Income Tax Forms > File Income Tax Forms

  2. Form 10IE option

    Taxpayers will be able to find the form 10IE option under the Persons with Business / Profession Income tab.

  3. File Form 10IE Process

    Click on the option to File Now. On the next screen, select the relevant assessment year and click on continue.

  4. Preview Page

    Provide the details for the 4 sections mentioned on the application page.

  5. Assessing Officer

    The information on this page will be prefilled. Verify the details in case of any error and click on confirm.

  6. Basic Information

    Personal details such as name, PAN, date of birth and address are prefilled from the profile page. Verify such details. Select the appropriate option under the nature of business or profession tab (if any) and save these changes.

  7. Additional Information

    Select yes if the taxpayer has any unit in the IFSC. If yes, you will view a drop-down where you will have to enter additional details such as: name of unit, address of unit and nature of business or activities. Once done, save these details.

  8. Verification Stage

    The final step of filing the Form 10IE is the verification stage. Review the information presented on this screen and click on the option to save this information.

  9. Preview

    Finally, preview all of these details and proceed to e-verify these details to complete the filing o this form. You can also download this preview page for your reference.

  10. e-Verify Form 10IE

    Select from any of the options provided to e verify the form 10IE to complete the process. On completion, you will receive the acknowledgement number which you shall require while filing your ITR.

Contents of Form 10-IE

Given below are the basic details that we need to enter in form 10IE:

  • Name of the individual/HUF
  • Confirmation – Whether the individual/HUF has any income under the head profit or gains from business or profession
  • PAN
  • Address
  • Date of Birth/Incorporation (in dd/mm/YYYY format)
  • Nature of Business/Profession
  • Confirmation – If taxpayer has any unit in International Financial Services Centre (IFSC), as referred to in sub-section (1A) of section 80LA. (if yes, the details have to be provided)
  • Details of the previous form 10-IE filed (If applicable)
  • Declaration

E-filing the Form 10-IE

The notification has given the clarification that tax payer need to file the form electronically. Taxpayers can file the form on the IT Portal to opt for the new tax regime for FY 2020-21 onwards. The form will be filed using either digital signature certificate or electronic verification code.

Download Form 10 IE
You can download the form 10 IE from here
Download
Download Form 10 IE
You can download the form 10 IE from here
Download

FAQs

Can I choose a new tax regime at the time of filing ITR, if I have opted for the old tax regime with my employer?

If an individual who has opted for old tax regime with his/her employer for TDS on salary, plans to opt new tax regime at the time of filing ITR, then he/she can do that by filling the new form i.e. 10-IE.”

What if I forget to fill the new form?

If an individual forgets to fill the new form i.e. Form 10-IE, at the time of filing ITR, then he/she may be disallowed the tax rates available under the new tax regime. The tax department will calculate his/her income tax liability based on the existing/old tax regime.

Who needs to sign the form 10-IE?

This form shall be signed by the individual/Karta of the HUF/Authorized Representative only.

SFT – Statement of Financial Transaction

Statement of Financial Transaction – SFT consists of certain specified financial high-value transactions undertaken by citizens that the Government proposes to track, with an intent to curb black money and widen the tax base in India.
The Government of India requires certain specified persons and entities to report high-value transactions undertaken by citizens to the Income Tax department.
Such specified persons were required to submit ‘Annual Information Return (AIR)’ introduced in 2003 with respect to specified financial transactions under Section 285BA.

What is SFT?

SFT is a report of specified financial transactions specified persons need to submit to the to the income tax authority or such other specified authority or agency.

Also, as per section 285ba of Income Tax Act, specified persons who need to register, maintain or record such specified financial transaction are under an obligation to submit SFT.

Specified transactions required to be reported in SFT or Statement of Financial Transaction

Financial transaction under Section 285BA are as follows:

  • Transaction of purchase, sale or exchange of goods or property or right or interest in a property; or
  • The tansaction for rendering any service; or
  • Transaction under a works contract; or
  • Any transaction by way of an investment made or an expenditure incurred; or
  • Transaction for taking or accepting any loan or deposit

Specified persons required to report such transactions

Following persons shall be required to furnish statement of financial transactions or reportable accounts registered or recorded or maintained by them during a financial year to the prescribed authority:

  • An assessee;
  • The prescribed person in the case of an office of Government;
  • A local authority or other public body or association;
  • The Registrar or Sub-Registrar appointed under the Registration Act, 1908;
  • The registering authority empowered to register motor vehicles under Chapter IV of the Motor Vehicles Act, 1988;
  • The Post Master General as referred to in section 2 of the Indian Post Office Act, 1898;
  • The Collector referred to in section 3 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013;
  • The recognised stock exchange referred to in section 2 of the Securities Contracts (Regulation) Act, 1956;
  • An officer of the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934;
  • A depository referred to in section 2 of the Depositories Act, 1996 (22 of 1996); or
  • A prescribed reporting financial institutions
  • A person, other than those referred to in clause (a) to (k), as may be prescribed.

When the transactions are required to be reported?

Section 285BA authorizes CBDT to prescribe values for specified financial transactions.
Moreover, based on such specified value of different nature of transactions, specified persons need to report the same in SFT.
The nature and value of transactions prescribed by CBDT via Rule 114E is given below:

Sr No Nature of transaction to be reported Monetary Threshold limit Specified person required to submit SFT
1

Cash payment for purchase of bank drafts or pay orders or banker’s cheque

Payments in cash for purchase of pre-paid instruments issued by Reserve Bank of India

Cash deposits or Cash withdrawals from one or more current account of a person

Aggregating to INR 10 lakh or more in a FY

Amount aggregating to INR 10 lakh or more during the FY 

 

Aggregating to INR 50 lakh  or more in a FY

A banking company or Co-operative bank to which Banking Regulation applies

2

Deposits in one or more accounts other than a current account and time deposit of a person Aggregating to INR 10 lakh or more in a FY A banking company or Co-operative bank to which Banking Regulation applies
Post-Master General of post office
3 One or more time deposits (other than renewed time deposit of another time deposit) of a person Aggregating to INR 10 lakh or more in a FY

(i) A banking company or a co‑
operative bank

(ii) Post Master General

(iii) Nidhi Company

(iv) Non-banking financial company

4 Credit card payments made by any person either in cash or by any other mode in a FY. Aggregating to INR 1 lakh or more in cash or INR 10 lakh or more by any other mode in a FY A banking company or Co-operative bank to which Banking Regulation applies or any other company or institution issuing credit card
5 Receipt from any person for acquiring bonds or debentures issued by the company or institution (other than renewal) Aggregating to INR 10 lakh or more in a FY A company or institution issuing bonds or debentures
6 Receipt from any person for acquiring shares (including share application money) issued by the company Aggregating to INR 10 lakh  or more in a FY Any company issuing shares
7 Buyback of shares from any person (other than the shares bought in the open market) Aggregating to INR 10 lakh  or more in a FY Listed company purchasing its own securities under section 68 of the Companies Act, 2013
8 Receipt from any person for acquiring units of one or more schemes of a Mutual Fund (other than transfer from one scheme to another) Aggregating to INR 10 lakh or more in a FY A trustee of a Mutual Fund or any such other person authorized to manage the affairs of the Mutual Fund
9 Receipt from any person for sale of foreign currency including any credit of such currency to foreign exchange card or expense in such currency through a debit or credit card or through issue of travelers cheque or draft or any other instrument Aggregating to INR 10 lakh or more during a FY Authorized person as referred in the Foreign Exchange Management Act, 1999
10 Purchase or sale of immovable property Transaction value or valuation of stamp duty authority referred in Section 50C for an amount of INR 30 lakhs or more. Inspector-General appointed under section 3 of the Registration Act, 1908 or Registrar or Sub-Registrar appointed under section 6 of that Act.
11 Cash receipt for sale, by any person, of goods or services of any nature (other than those specified at Sl. Nos. 1 to 10) Exceeding INR 2 lakh Any person who is liable for audit under section 44AB of the Act
12 Cash deposits during the period 09th November, 2016 to 30th December, 2016 Aggregating to INR 12,50,000 or more in one or more current account of a person or INR 2,50,000 or more in one or more account (other than current account) of a person A banking company or Co-operative bank to which Banking Regulation applies
Post Master General of post office
13 Cash deposits during the period 1st of April, 2016 to 9th November, 2016 in respect of accounts that are reportable under Sl.No.12.   A banking company or Co-operative bank to which Banking Regulation applies
Post Master General of post office

Aggregation rule

As it can be seen from the above monetary threshold for specified financial transaction except SI No 10 and 11, aggregation is required to analyze if monetary threshold is being crossed. While aggregating the amount, the following shall be noted:

  • All accounts of the same nature in respect of that person during the Financial Year shall be taken into account
    • For eg: If Mr. Z has two current accounts and deposited amount of INR 10 lakh each, in order to check monetary threshold of INR 20 lakh, amount in both savings account need to be aggregated
  • All transactions of the same nature in respect of that person during the FY shall be aggregated
    • For eg: If Mr. Y has purchased shares for a value of INR 15 lakhs in October in a FY also INR 7 lakhs in November of the same FY, value of both shares need to be aggregated to check monetary threshold of INR 22 lakhs
  • In a case where the account is maintained or transaction is recorded in the name of more than one person like joint account, attribute the entire value of the transaction or the aggregated value of all the transactions to all the persons
    • For eg: In case Mr. Y and Mr. Z holds two joint savings account of INR 8 lakhs and INR 12 lakhs, aggregation of INR 20 lakhs is attributed to both Mr. A and Mr. B separately to check for monetary threshold

Forms to be used for furnishing SFT

The statement of financial transaction shall be furnished electronically (under digital signature) in Form 61A to the Director of Income-tax (Intelligence and Criminal Investigation) or the Joint Director of Income-tax (Intelligence and Criminal Investigation).

However, Post Master General or a Registrar or an Inspector General may furnish Form 61A in a computer readable media being a Compact Disc or Digital Video Disc (DVD), along with the verification in Form-V on paper.


What is the Procedure to Submit SFT?

SFT shall be submitted through following procedure:

  1. Generate New ITDREIN

    Log in on e-filing portal and go to My Account> Manage ITDREIN (Income Tax Department Reporting Entity Identification Number)
    Select form type and Reporting entity category and click on ‘Generate ITDREIN’
    Based on this selection, appropriate ITDREIN will be generated and confirmation email and SMS will be sent to registered email id and mobile number respectively
    ITDREIN generated will now appear under My Account>Manage ITDREIN

  2. Prepare Form

    Go to e-file>Upload Form ‘xxx’ (appropriate Form No appears based on the selection made during registration)
    Verify/enter PAN, Form Name, FY, Reporting entity category, Half year, upload type i.e., whether original/correction form /Nil statement

  3. Upload the file

    On successful validation of above details, upload the file along with digital signature certificate

Success message will be displayed on the screen on successful uploading and confirmation email and SMS will be sent to registered email id and mobile number respectively

Uploaded file may be either ‘accepted’ or ‘rejected’. In case of rejection, reason for rejection would be mentioned and correction form shall be submitted through above procedure

Due date of furnishing SFT

The statement shall be furnished on or before 31st May immediately following the financial year in which the transaction is registered or recorded.

Information under SI No. 12 and 13 in the Table being related to demonetization period, the due date was 31 January 2017
Tip
Information under SI No. 12 and 13 in the Table being related to demonetization period, the due date was 31 January 2017

Inaccurate or defective statement of financial transaction

If any person, after filing the statement, comes to know or discovers any inaccuracy in the information provided in the statement, he shall inform such inaccuracy to the prescribed income-tax authority within a period of ten days and furnish the correct information.

On the other hand, the prescribed income-tax authority may also intimate the defect to the person and give him an opportunity of rectifying the defect within a period of thirty days from the date of such intimation or within such extended period as may be allowed by prescribed income-tax authority.

Non-furnishing of statement of financial transaction or reportable account will attract penalty under section 271FA. Penalty can be levied of Rs. 500 per day of default

In case of non-furnishing of SFT within due date, the prescribed income-tax authority may serve notice upon such person requiring him to furnish SFT within a period not exceeding 30 days from the date of service of such notice and he shall furnish the statement within the time specified in the notice.

If person fails to file the statement within the specified time, then a penalty of INR 1,000 per day will be levied from the day immediately following the day on which the time specified in such notice for furnishing the statement expires.

FAQs

What is the remedy available if inaccurate information is submitted in the SFT?

If any person, after filing the statement, comes to know or discovers any inaccuracy in the information provided in the statement, he shall inform such inaccuracy to the prescribed income-tax authority within a period of ten days and furnish the correct information.

What if SFT is not rectified within the due date as mentioned in the intimation sent by concerned income-tax authority for defects in SFT?

If defect is not rectified within such period, such statement shall be treated as invalid and consequences of non-furnishing of SFT shall apply

Is it mandatory to file nil return also?

Nil Statement is not mandatory but to stay on the safer side an assessee should consider filing the SFT (Statement of Financial Transactions).

Form 26QD : TDS on Contractual and Professional Payments

The CBDT had announced that Individuals/HUFs making contractual or professional payments need to deducted TDS under section 194M from FY 2019-20 (1st Septemeber, 2019). TDS is deducted at 5% if the paid amount exceeds INR 50,00,000 and TDS Return for the same needs to be filed in Form 26QD. The payee gets Form 16D as proof of TDS Deduction.

Let us take an example: A person has made paid a professional INR 55 Lakh on July 20th in the Financial Year. Hence, the tax deducted by the person must be deposited with the central government on or before August 30. Therefore, the person must also issue the TDS certificate (Form 16D) by September 15.

Steps to Fill Form 26QD

  1. Visit the Income Tax e-Filing portal

    Click on the “e-Pay Tax | Challans” option under the Quick Links section.

  2. Click on the “Continue to NSDL Website” option.

    A pop-up message will appear on the screen.

  3. Click on the “Proceed

    Click on the “proceed” option under the Form 26QD section.

  4. Fill up the form with the required details like Tenant, Landlord, TDS, Property etc.

    Click on the “Submit” option to complete the process.

Details Required in Form 26QD

  • PAN of Deductor/Payer
  • PAN of Deductee/Payee
  • Nature of payment (work in pursuance of a contract/commission/brokerage or fees for professional services)
  • Date of contract/agreement
  • Amount paid
  • Number of the certificate under section 197 issued by the Assessing Officer for non-deduction or lower deduction
  • Date of credit
  • The rate of TDS
  • Details of payment of TDS
Ask an Expert (TDS)
Talk to an expert via call, whatsapp or message. Ask questions about TDS Deduction, TDS Return Filing and Compliance.
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Ask an Expert (TDS)
Talk to an expert via call, whatsapp or message. Ask questions about TDS Deduction, TDS Return Filing and Compliance.
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FAQs

What is the due date to file Form 26QD?

Form 26QD has to be filed by the 30th of next month of the deduction of the TDS. For example, the TDS of October has to be deposited by the 30th of November of the same year. TDS of November has to be deposited by 30th of the December and not 31st of December.

What is the penalty for late deposit?

Interest @1% is levied if there is a delay in the deduction of TDS. Similarly, 1.5% interest is levied if there is a delay in the deposition of the TDS. Moreover, a late fee of INR 200 per day has to be paid for the late filing of Form 26QD. This penalty cannot be more than the TDS amount.

When will I receive Form 16D?

Form 16D will be given to the payee within 15 days from the date of filing of Form 26QD. It will be provided by the payer/deductor.

ITR Documents : Income from other sources

Income from other source (IFOS) includes any income which is not taxed under the following Income heads:

  1. Salary Income
  2. Business and Profession income
  3. Capital gain Income
  4. House property Income

The Income From Other Source includes Bank Interests, Investment Interests, Dividend Income, Family Pension, Gifts, Royalty, etc.

ITR for Income from Other Sources (IFOS)
CA Assisted Income Tax Return filing for individuals having interest, provident fund and other income covered under the head IFOS.
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ITR for Income from Other Sources (IFOS)
CA Assisted Income Tax Return filing for individuals having interest, provident fund and other income covered under the head IFOS.
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Document Checklist for Income From Other Source

PAN

Income Tax Department (ITD) issues Permanent Account Number (PAN). It is an alphanumeric ID of a taxpayer who is liable to pay taxes. PAN enables the department to link all transactions of the “Person” with his “Income”. Hence it is the most essential document while filing ITR.

Aadhaar

Aadhaar (Aadhaar Card) a 12 digit unique identification number issued by the UIDAI (Unique Identification Authority of India). It is mandatory for Resident Individuals to provide details of Aadhaar while filing ITR.

Form 26AS

Form 26AS is a consolidated Tax Credit Statement. It has the following details:

  • ​Details of TDS from the taxpayer’s income.
  • ​Details of TCS from taxpayer’s payments.
  • Advance Tax, Self Assessment Tax paid by the taxpayers.
  • Details of the Refund received during the year.
  • Details of any high-value transactions (for eg. Shares, Mutual Funds, etc.).

It is very important to check Form 26AS before e-filing the ITR. Since it has details of TDS deducted on Interest and Other Income by deductors.

31st July
ITR filing Due Date for taxpayers having Income From Other Source.
31st July
ITR filing Due Date for taxpayers having Income From Other Source.

Investment proofs

A taxpayer can claim the deduction of certain Investments and expenses while filing ITR. Investments proofs, Donation Receipts, Fixed Deposit Statement, etc are required to claim Chapter VI-A deductions. These investments reduce the net taxable income of a taxpayer.

Bank Statements

Bank Statement with IFOS transactions is an essential document to prepare ITR. It is important to look at bank statements to derive total income earned in the form of Interest, Dividend, Gift, etc.

FAQs

What is Income from other sources?

Income from other sources is a residual income that cannot be taxed under other heads. It includes income from a savings bank account, Fixed deposits, Post office savings, Family pension, etc. It also includes any monetary/non-monetary gifts received by an individual.

What is the tax treatment of dividends received from a foreign company?

Dividend received from an Indian company is exempt from tax. However, Dividend received from a foreign company is taxable as “Income from other sources”. And you need to pay taxes at rates based on the income slab you fall under.

I have won a lottery of Rs 2 lakhs. Is this taxable?

Yes. When any individual receives any kind of lottery or price money it is taxable. It is converted under IFOS.

I have received Rs. 1,00,000 in cash from my father as a wedding gift. Is it taxable?

No. Gifts received on a wedding occasion is exempt from tax. Hence Rs, 1,00,000 will be exempted from tax. However, you should report the same while filing ITR.

What are the documents required to file ITR?

Following are the documents required to file ITR:
-PAN
-Aadhaar
-Form 26AS
-Bank Account Details
-Tax Payment Challan
-Original Return (if filed)

ITR Documents : Business and Professional Income

Any Income earned from the Business and Profession of a taxpayer is taxed under the head “Income from Business and Profession“. Business is an occupation that is carried by a person with the intent of earning profits. Any income earned from that is considered as Business Income. A profession is a job requiring specialized knowledge, skill, or thought. Any income earned from that is called Professional income.

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Document Checklist for Business and Profession Income

PAN

Income Tax Department (ITD) issues Permanent Account Number (PAN). It is an alphanumeric ID of a taxpayer who is liable to pay taxes. PAN enables the department to link all transactions of the “Person” with his “Income”. Hence it is the most essential document while filing ITR.

Aadhaar

Aadhaar (Aadhaar Card) a 12 digit unique identification number issued by the UIDAI (Unique Identification Authority of India). It is mandatory for Resident Individuals to provide details of Aadhaar while filing ITR.

Books of accounts

A balance sheet is a financial statement that reports a company’s assets, liabilities and shareholders’ equity for a particular year. While profit & loss statement/Income-Expense statement discloses incomes and gains that are credited and expenses and losses that are debited in order to show the net profit or loss for a given period of time. Supporting documents are also required in case of any extra expenses incurred that has been mentioned in the P&L/I&E Statement.

Bank account statement

Bank Statement with details of business transaction is an essential document to prepare ITR. Details of incomes and expenses can also be derived using the Bank Statement to prepare financial statements such as Balance Sheet and P&L Account.

Cash Register

Cash transactions reported in the Cash Register is used to prepare the Income Tax Return of the business. It is important to disclose information such as Cash Balance as on 31st March, details of cash payments for expenses etc

Form 26AS

Form 26AS is a consolidated Tax Credit Statement which provides the following details to a taxpayer.

  • ​Details of taxes deducted from the taxpayer’s income.
  • ​Details of taxes collected from taxpayer’s payments.
  • Advance Taxes, Self Assessment Taxes and Regular Assessment Taxes paid by the taxpayers.
  • Details of the refund received during the year.
  • Details of any high-value transactions (for eg. Shares, Mutual Funds, etc.).

It is very important to check Form 26AS before e-filing the Income Tax Return because no one would want their tax credits to be unclaimed. 

Investment Proofs

Investment proofs such as Donation Receipts, Fixed Deposit Statement, Rent Agreement, etc are required to claim eligible deductions under Chapter VI-A while filing ITR of a business or profession.

31st July
ITR filing Due Date for taxpayers having Business and Profession Income to whom Tax Audit is not applicable.
31st July
ITR filing Due Date for taxpayers having Business and Profession Income to whom Tax Audit is not applicable.

FAQs

Do I have to submit an Audit report while filing ITR for business income?

Tax Audit is applicable if your turnover from the business is more than 1 Cr. and the net profit of a business in less than 6%. Or if your gross receipts from the profession are more than 50 lakhs or net receipts are less than 50%. In this case, the Audit Report also has to be included while filing ITR.

Which financial statements are prepared to file ITR for business or professional income?

Balance sheet and Profit and loss statement are required to filed in ITR for business and professional income. A balance sheet is a financial statement that reports a company’s assets, liabilities and shareholders’ equity for a particular year. Profit and loss statement is used by businesses to record their incomes and gains credited and expenses and losses debited.

Which ITR to file for business income?

In the case of proprietor having a business income, he can file either ITR-3 or ITR-4. ITR-3 for business income and trading income. ITR-4 for business under presumptive taxation scheme. Moreover, Partnership Firm and LLP carrying business need to file ITR-5 and Companies have to file ITR-6.

What happens if I delay filing my ITR?

Firstly, If your income falls under the taxable bracket you have to file your ITR without fail. Secondly, If you missed the deadline to file the ITR you can still file it but you may attract penalties. Moreover, If you don’t pay your taxes on time then if you are claiming any refunds they will get delayed. You will get lesser time to revise your ITR. and Lastly, You will have to pay interest on the taxable amount if you delay filing your ITR.

Who is required to file ITR?

If your age is below 60 years and your income is more than rupees 2.5 lakh p.a then you are eligible to file your ITR.

What are the documents required to file ITR?

Following are the documents required to file ITR:
-PAN
-Aadhaar
-Form 26AS
-Bank Account Details
-Tax Payment Challan
-Original Return (if filed)

ITR Documents Checklist : House Property Income

House property is any Land or Building or land attached to the building. The land could be a courtyard, parking space, or compound. A taxpayer needs to report income earned from such Property while filing ITR. Hence it is important to keep supporting documents checklist while calculating Income tax. It also includes:

  • Residential houses/Flats
  • Shops
  • Office space
  • Factory sheds
  • Farmhouses
  • Godowns
  • Cinema building
  • Workshop building
  • Hotel building etc.

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You can file ITR-1 if you have earned income from one property. However, you need to file ITR-2 if you own more than one property. You can file ITR online using ITR Utilities or through registered e-Return Intermediary (ERI) like Quicko.

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House Property Income Documents Checklist

PAN

Income Tax Department (ITD) issues Permanent Account Number (PAN). It is an alphanumeric ID of a taxpayer who is liable to pay taxes. PAN enables the department to link all transactions of the “Person” with his “Income”. Hence it is the most essential document while filing ITR.

Aadhaar

Aadhaar (Aadhaar Card) a 12 digit unique identification number issued by the UIDAI (Unique Identification Authority of India). It is mandatory for Resident Individuals to provide details of Aadhaar while filing ITR.

Utility Bill

While filing ITR taxpayers have to disclose the address of all the properties owned by them. Utility Bill contains property addresses and thus serves as a proof of address.

Rent Agreement

Rental Income is taxable income. Therefore, rent agreement between the owner and the tenant for a particular house property serves as proof of income earned during the financial year.

Form 16A 

Form 16A will be provided if TDS is deducted on your rental income. While filing your ITR you can claim this TDS using Form 16A.

Home loan repayment certificate/ Interest Certificate from the bank

This certificate consists of capital amount, repayment amount, the interest charged, and co-ownership details. This serves as proof for claiming a deduction on Interest Repayment and Principal Repayment. And reduces your net taxable house property income.

Municipal Tax Receipts

Municipal tax is paid on properties. Taxes paid on let out properties can bring down your net taxable rental income. Therefore, Municipal Tax receipts are required while calculating the income from house property.

31st July
ITR filing Due Date for taxpayers having House Property Income.
31st July
ITR filing Due Date for taxpayers having House Property Income.

FAQs

How to calculate self-occupied house property income?

A Self Occupied House Property is the one that you use as your own residence. This property can be in use by your children, spouse, and/or parents. Since there is no Income from such House Property, the gross annual value of this property is NIL (zero).

How do you calculate Income from House Property?

The assessee must be the owner of the properties. Identify the Gross annual value (GAV) of the house property. For self-occupied property, the GAV would be nil while for let out property the GAV will be the total rent received. Deduct municipal taxes paid by you (owner) towards the house property. Now you will realize the Net annual value of the house property. From NAV, deduct standard deduction of 30% and interest paid by you on a house loan. This will give you your Income from house property.
GAV- Municipal tax = NAV
NAV- Standard deduction- interest on borrowed capital= Income from house property.

What happens if I delay filing my ITR?

Firstly, If your income falls under the taxable bracket you have to file your ITR without fail. Secondly, If you missed the deadline to file the ITR you can still file it but you may attract penalties. Moreover, If you don’t pay your taxes on time then if you are claiming any refunds they will get delayed. You will get lesser time to revise your ITR. and Lastly, You will have to pay interest on the taxable amount if you delay filing your ITR.

Who is required to file ITR?

Every taxpayer whose income exceeds the Basic Exemption limit needs to file ITR. If your age is below 60 years and your income is more than rupees 2.5 lakh p.a then you are eligible to file your ITR.

What are the documents required to file ITR?

Following are the basic documents required to file ITR:
-PAN
-Aadhaar
-Form 26AS
-Bank Account Details
-Tax Payment Challan
-Original Return (if filed)

Form 61A : Annual Information Return (AIR)

Some individuals need to file Form 61A to justify their High Value Transactions, you can track the status of this filing on the TIN-NSDL website. Entities such as Banks and other Financial Institutes are responsible to furnish certain transaction details through Form 61A (AnnualInformation Return). Hence, with an aim to curb black money and to track high-value transactions, the government has implemented new reporting guidelines. Therefore, “High valued transaction” of Individuals and Businesses are monitored u/s 285BA of The IncomeTax Act.

Form 61A contains details of the transaction and reportable account maintained by the specified persons during the Financial Year. The Income Tax Department using AIR monitors these High valued transactions.

Who should file Form 61A (AIR)?

According to the section 285BA of the Income Tax Act, 1961, “Specified persons” are required to record and report “High-value financial transactions” of individuals and file Form 61A, upon receipt of notice. For instance, these specified persons can be:

  • Individuals and Taxpayers
  • Banks
  • Mutual funds
  • Institutions issuing bonds and registrars or sub-registrars

Detailed information on who should file Form 61A (AIR) as per the Tax Information Network (TIN) is as follows:

Sr. No.

 

Class of Person

Nature and value of the transaction

Clarification by Central Board of Direct Taxes vide circular

 

1.

 

Banking Company to which the Banking Regulation Act, 1949 applies.

 

Cash deposits of any person totaling to Rs. 10,00,000 or more in a year in the savings account of any bank.

 

The total of all the cash deposits in the savings account of a person should be reported as one single transaction. However, the date of the transaction should be the last date of the financial year.

 

 

2.

 

Banking Company to which the Banking Regulation Act, 1949 applies or any other Company or Institution issuing the credit card.

 

 

If credit card payments against a person are Rs.2,00,000 or more in a financial year.

 

The total of all the payments by a person to the credit card company should be reported as one transaction. And hence the date of the transaction is to be the last date of the financial year.

 

3.

 

trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund as may be duly authorized by the trustee in this behalf.

 

 

This is if you are acquiring any units of fund amounting to Rs. 2,00,000 or more in a financial year.

 

The amount actually received from the transacting party and not the amount relating to the allotment is to be reported.

 

4.

 

Company or Institution issuing bonds or debentures.

 

This is if you are acquiring any bonds or debentures amounting to Rs.5,00,000 or more in a financial year by the Company or institution.

 

 

The amount actually received from the transacting party and not the amount relating to the allotment is to be reported.

 

5.

 

Company issuing shares through public or rights issue.

 

If you are acquiring any shares of a company amounting to Rs. 1,00,000 or more

 

 

The amount actually received from the transacting party and not the amount relating to allotment is to be reported.

 

6.

 

Registrar or Sub Registrar appointed under section 6 of the Registration Act, 1908.

 

If you are purchasing or selling any immovable property that values Rs.30,00,000 or more in a financial year

 

Certain situations where the transaction of property valued at Rs. 30,00,000 involves joint parties and value for one or more parties is less than Rs. 30,00,000.

In such situations, all such transactions are to be reported even though the value of transaction in the hands of one or more of the joint parties is less than the threshold limit.

 

 

7.

 

An officer of the Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, 1934 who is duly authorized by the Reserve Bank of India in this behalf.

 

 

This is applicable if you are acquiring any bonds issued by the RBI amounting to Rs. 5,00,000 rupees or more in a year

 

The total of all the receipts from a person is required to be reported as one transaction and the date of the transaction is to be mentioned as the last date of the financial year.

Circumstances under which Form 61A is rejected

AIR may be rejected due to the following reasons:

  • Filers have to mention the filer’s name, TAN, PAN, Form number and the Current Financial Year. Any mismatches with the form and file submitted will end up in rejection.
  • If the return file provided on Computer media is not generated by the AIR FVU.
  • When you don’t file Form 61A (Part A) in the physical paper format along with the AIR file.
  • When your Form 61A (Part A) is not duly signed or verified.
  • Overwriting on Form 61A (Part A) not approved by the person who has signed the same.
  • When you use more than one computer to file the AIR. Also, when computer media finds your submission corrupted or with any viruses.
  • If you compress the AIR file using any other compression utilities than Winzip 8.1 or ZipItFast 3.0 or higher version.
  • Mismatch of the total in Form 61A with the total of SAM (Statement Acceptance Module) at the TIN Facilitation Centre.

Consequences of not submitting Form 61A on Time

Tax authorities of India, under section 285BA (5) can issue a notice to a specified person asking them to file Form 61A (Annual Information Return) within a period of 30 days from the date of receiving the notice. If they fail to file the statement within the allotted time then they will face a penalty of INR 1,000 per day after the date mentioned in the notice for furnishing the statements.

Steps to file Form 61 (AIR)

  1. Visit the TIN-NSDL website

    Download your AIR Return Preparation Utility (RPU) provided through NSDL

  2. Next you download your AIR RPU

    This is how your downloaded AIR RPU form will look like

  3. You need to fill in the required details in the given sheets under the downloaded excel file

    Post downloading the form

  4. Next you need to download the E-AIR FVU application

    To do this you need to download the latest JAVA software

  5. After setting up the application, you can now upload your excel sheet there

    If your file has any errors, the application will generate errors through the error file path. All errors need to be cleared in order to have the file accepted.

  6. Your accepted file needs to be copied on a CD or a Floppy

    Lastly, you need to visit the TIN-NSDL AIR section and skip to the 5th step and download Part A of Form 61A

  7. Next, visit your nearest TIN Facilitation Center (TINFC) and file your AIR return

    Now that you have your file on a CD or a Floppy and have your Part A of Form 61A filled.

Track Form 61A Filing Status

  • Visit the Tax Information Network Portal and click on services and select Annual Information Return from the dropdown
  • Select “AIR status view for filers
  • Enter your PRN and valid TAN

FAQs

What is File Validation Utility (FVU)?

FVU created by NSDL is a program to verify the format of AIR submitted by filers and to measure its accuracy.
FVU will accept AIR submissions only if it is error-free. If there are any errors in the details an error code and error description and details about the error will be displayed.
You can resubmit your form after correcting the errors. If there remains no error in filing AIR then the “File Validation Successful” message pops up.

How does the Income Tax Department (ITD) come to know about my “High value Transactions”?

If any Individual/Business makes a Financial Transaction which can be considered as “High value Transactions”, then the Bank and other Financial Institutes are responsible to report the transaction to the ITD, along with the registered PAN of that Person. Hence, ITD can come to know about your “High valued Transactions”

What are the Forms required for AIR?

AIR can be furnished through Form 61A (Part B) in a digitized form in a CD/Floppy. While Form 61A (Part A) in a paper format duly signed.

How to fill Form 12BB?

All the salaried taxpayers need to fill Form 12BB. It is supposed to be submitted at the beginning of every financial year by the employee to his/ her employer for the correct deduction of TDS. It discloses all their tax-saving investments of that particular financial year.

Steps to Fill Form 12BB

Time needed: 3 minutes.

  1. Download Sample Form 12BB

    You can download the sample Form 12BB from the Income Tax Department website.

  2. Add Personal Details

    Fill Personal Details i.e, Add your Name, Address, and PAN details. Also, mention the current financial year i.e 2020-2021.

  3. Add house rent allowance Details

    If you are incurring any rental expenses for your work then that can be deducted under HRA.

  4. Add LTA Details

    Add details of LTA if any.

  5. Enter Details regarding Interest on Loan for Borrowings

    If you are paying any Interest on EMI of home loans in this particular Financial year it can avail you benefit up to 2,00,000 for self-occupied property and no limit on rented property.

  6. Add Chapter VI-A Deductions

    Add details of tax deductable investments and deductions under 80C, 80CCD (1B), 80D, 80DD, 80E, 80G etc.

Who needs to Fill Form 12BB?

Effective from 1st June 2016, Every salaried taxpayer has to submit Form 12BB. You will also have to submit proofs/evidence to support your investments. It can help you reduce your taxable income and it also helps your employer to deduct correct TDS from your salary. 

Yet in case… If you haven’t filed your Form 12BB your employer might have deducted excess TDS from your salary. But, you can claim your excess TDS while filing your Income Tax returns.

FAQs

What is Form 12BB?

Salaried employees have to provide certain information to their employer in order to avail tax benefits while filing for Income Tax Return. There was no particular standard format before to disclose investments. But, from June 2016, Introduction of standard form 12BB has made lives easier.

What is the purpose of form 12BB?

Form 12BB serves the following two purposes:
1. Helps employer deduct correct TDS of an employee,
2. Helps employee determine his tax liability and make tax savings investments accordingly.

Do I have to submit the Form 12BB to Income tax department?

No, the form is not to be submitted to the Income-tax department. It is to be submitted to the employer.

Income Tax e-Filing Portal : Change ITR Form Details

As it usually takes a month from the date of filing for the Income Tax Department (ITD) to process tax returns. The taxpayers who have filed their Income Tax Return (ITR) for the Financial Year 2018-2019 onwards can update or change certain details in their ITR form. These updates can be made prior to the processing of the return. The user can change details of:

  1. Bank Account Details
  2. Address Details and,
  3. E-Mail ID/Mobile Number Details
Check which ITR Form to file?
Income Tax Return Forms to file depends on your Income Source, Residential Status, and other financial situation. Know which ITR Form you should file.
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Check which ITR Form to file?
Income Tax Return Forms to file depends on your Income Source, Residential Status, and other financial situation. Know which ITR Form you should file.
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Steps To Change ITR Form Details

  1. Go to Income Tax e-Filing Portal

    Log in using valid credentials.

  2. Click on My Account

    Go to Service Request

  3. Select “New Request” from the drop-down list.

    Select “Change ITR Form Particulars” from the drop-down list.

  4. Click on submit

    Enter the acknowledgment number

  5. Enter the correct details in the respective field

    Bank Account Details, Address Details or E-Mail ID/Mobile Number and click on submit.

  6. A success message will be displayed on the screen.

    The process is finished.

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FAQs

Can I make changes in filed ITR?

Yes. A taxpayer can make changes to filed ITR before it gets processed by the CPC Bangalore. You can make changes online from Income Tax E-filing Portal or by filing Revise ITR.

Is it possible to make changes in Income using above facility?

No. You can only make changes to primary information using change in ITR Form Particulars function.

How to file ITR Online?

A taxpayer can file ITR online using any of the following options:
1. Visiting Income Tax E-filing Portal,
2. Using ITR Utility issued by the IT Department,
3. Using Online Platforms like Quicko.