- What is ITR 3 form?
- Who can File ITR Form Number 3?
- Who can not file ITR 3?
- Structure of ITR Form 3
- ITR 3 Preparing Parts and Schedules
- Documents needed to File ITR 3 Form?
- How to file the ITR 3?
- Sample ITR 3 Form AY 2021-22
- Major Changes in ITR 2 for AY 2021-22
What is ITR 3 form?
ITR 3 form means having income from business or Profession and from partnership firm/LLP for individual or HUFs. In simple words, ITR 3 needs to be filed when income is earned under the head “Profit or gain of business or profession“. It is also filed when Tax Audit is applicable.
Up to FY 2018-19 (AY 2019-20), it was not mandatory to file Income Tax Return if the total income was less than the basic exemption limit. However, Budget 2019 inserted the seventh proviso to Section 139(1). As per this new provision, if a taxpayer has entered into high-value transactions, it is mandatory to file the ITR even if the total income does not exceed the basic exemption limit. The high-value transactions can be either of the following:
- If the taxpayer has deposited more than INR 1 Cr in a current account
- If the taxpayer has incurred foreign travel expense of more than INR 2 lacs
- Or, if the taxpayer has incurred electricity expense of more than INR 1 lac
Who can File ITR Form Number 3?
The ITR 3 form can be filed by the person who is:
- A partner in a partnership firm or LLP
- Earning income from salary, house property, capital gain, other sources, and under the head “Profits or gains of business or profession” and not eligible to opt for Presumptive Taxation Scheme.
Who can not file ITR 3?
Any separate legal entity other than HUF can not file ITR 3 i.e, Partnership Firm, LLP, Company, Charitable Trust, etc can not file ITR 3.
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Structure of ITR Form 3
|PART A- GENERAL||Personal Information||Name, Address, Date of Birth, PAN, contact details, etc.|
|Filing Status||Employer Category, Tax status, Residential status, Return filed under the section, etc.|
|PART B-TI||Computation of total income|
|PART B-TTI||Computation of tax liability on total income||The Bank Account details, Verification and TRP details (if any) are to be provided here|
|Schedule IT||Details of Advance Tax and Self Assessment Tax Payments||BSR code, Date of Deposit, Chalan number, Tax Paid|
|Schedule TDS||TDS1: Details of Tax Deducted at Source from SALARY||TAN of Employer, Employer Name, Tax Deducted, etc.|
|Schedule TDS||TDS2: Details of Tax Deducted at sources from Income other than Salary (As per FORM 16A)||TAN, Name of Deductor, Year of Deduction, Tax deducted, etc.|
|Schedule TDS||TDS3: Details of tax deducted at source on sale of immovable property u/s 194IA (Form 26QB)||PAN & Name of the Buyer, TDS-certificated Number, TDS Amount, etc.|
|Schedule TCS||Details of Tax Collected at Source (TCS) [As per Form 27D issued by the collector]||TDS/TCS Number of the Collector, Name of the Collector, Tax Collected, Amount being Claimed|
|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 IF||Information regarding partnership firm in which you are a partner||Name and PAN of the Firm, Whether the firm is liable to audit?, Percentage share in profit, Amount of share in the profit, Capital balance as on 31st March in the firm.|
|Schedule BP||Details of Income from Firm of which you are a partner||Salary, bonus, commission or remuneration, Interest received from the firm on capital, expenses, Net Income|
|Schedule CG||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, etc.|
|Schedule OS||Income from Other Sources||Dividend, Interest, Rental Income from machinery, Winnings from lotteries, Crossword puzzles, Races, Games, etc.|
|Schedule CYLA||Details of income after setoff of current year losses|
|Schedule BFLA||Details of income after Set off of Brought Forward Losses of earlier years|
|Schedule CFL||Details of Losses to be carried forward to the future years|
|Schedule VI-A||Deductions under Chapter VI-A||Deductions under section 80C, 80CCC, 80CCG, 80D, 80DDB, 80E, 80G, 80TTA etc.|
|80G||Details of donations||Name of Donee, Address, city or district, state code, PAN of Donee, amount, etc.|
|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 Rs. 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, etc.|
|Schedule FSI||Details of Income from outside India and tax relief||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 the spouse, Income received under different heads, Amount appointed in the hands of the spouse, TDS details, etc.|
|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, etc.|
|Schedule AL||Asset and Liability at the end of the year (other than those included in PART A – BS of the return of the firm in which you are a partner) [Applicable in a case where total income exceeds Rs. 25 Lakh]||Particulars of Assets and Liability|
ITR 3 Preparing Parts and Schedules
- All items must be filled in the manner indicated therein; otherwise the return maybe liable to be held defective or even invalid.
- If any schedule is not applicable score across as “NA“.
- If any item is inapplicable, write “NA” against that item.
- Write “Nil” to denote nil figures.
- Except as provided in the form, for a negative figure/ figure of loss, write “” before such figure.
- All figures should be rounded off to the nearest one rupee. However, the figures for total income/ loss and tax payable be finally rounded off to the nearest multiple of ten rupees.
2. Sequence for filling out parts and schedules
You are advised to follow the following sequence while filing out the form:
- Part A- General on page 1.
- Part BTI and Part BTTI
- Details relating to TRP and counter signature of TRP if return is prepared by him.
Documents needed to File ITR 3 Form?
Acquire the given list of documents on the basis of relevant Incomes types in order to indulge in smooth filing process.
- PAN (Permanent Account Number)
- Bank account details
- TDS certificates
- Counterfoils of taxes paid
- Details of original return if filing revised return
- Details of notice if filing in response to the notice
Documents on the basis of your type of Income
- Salary income
- Form-16 / Salary slips received from your employer and
- Pension statement/passbook.
- House/Property Income
- Address of the property,
- Coowner details in case the property is coowned,
- In case of house/property loan Interest certificates/repayment certificate from bank,
- In case of let out property Rent agreement
- Other sources
- Savings/current account statements/passbook
- Interest certificates for deposits/bonds/NSC
- PPF account statement/passbook
- Dividend warrants/counterfoils
- Rent agreement in case of let out machinery
- Details about receipts of any other incomes
- Capital Gains
- For land/building Sales & Purchase deeds, stamp duty valuation
- Details of improvement costs
- For securities Contract notes/stock ledgers/trading statement
- For other capital assets Cost of purchase, cost of improvement & sales receipts
- Details of expenses incurred on transfer of capital assets
- Details of investments in order to claim exemptions
- Capital gains deposit account details if any
- If you’re eligible for any Tax Breaks, you may need to acquire the relevant documents from the list:
- PPF account statement/Passbook
- Fixed deposit certificates/statements
- Mutual fund NAV statements
- ELSS/ULIP/NSC investment details
- Life insurance premium receipts
- Medical insurance premium receipts
- Preventive health checkup details
- Pension fund/ National pension scheme statement
- House/property loan interest certificate/repayment statement
- Education loan interest certificate/repayment statement
- Tuition fees receipts
- Donation receipts
- Certificate from specified medical authorities in case of disability
- Receipts/proof of any other tax saving investment/contributions
How to file the ITR 3?
You can either file your ITR 3 physically or electronically. Since the Financial year 2013-14, electronic filing of ITR 3 has been made compulsory for taxpayers having an income of more than INR 5 Lakhs.
In case of Physical submission
- You can submit the ITR-3 in paper form or
- You can submit the bar-coded return form duly filled.
The department will provide you with an acknowledgement along with the stamp of submission on your copy.
In case of Online / Electronic submission
- You can submit the ITR 3 online after digitally signing the same or
- You can submit the ITR 3 online and subsequently send the signed verification of the filed return in ITR-V to Central Processing Center Bangalore within 120 days of filing.
- Or, with the newly introduced e-verification of ITR, you can avoid sending the ITR-V and get done with the entire process within three to five weeks.
Sample ITR 3 Form AY 2021-22
Major Changes in ITR 2 for AY 2021-22
- Taxpayers are given the option to choose between the old tax regime and the new tax regime
- Dividend Income has to be added with a quarterly breakdown for accurate calculation of Interest under Section 234C
The due date to file ITR-3 is 31st July of the next financial year for taxpayers to whom tax audit is not applicable.
Yes, ITR-3 can be filed after the due date. It will be considered as a belated return. And late filing fees will be levied while filing a belated return.
Yes, partners in partnership firm needs to file ITR-3. And needs to provide specific details relating to income earned from partnership firm.
Thanks for the blog! Just one quick question - Why do we have to report a quarterly breakdown of Dividend Income under IFOS?
This quarterly breakdown of Dividend Income under IFOS will help to calculate and determine penalty u/s 234C for the delay in payment of Advance Tax.
Hope this helps!
I had received dividend recently but I had noticed that TDS had been deducted. any idea as to why has it happened and is there a way I can claim this TDS?
After the introduction of Budget 2020, dividend income is now taxable in the hands of the shareholder; and is also subject to TDS at 10% in excess of INR 5000 u/s 194 & 194K. Foreign Dividend is taxable at slab rates. TDS is not applicable to such dividends. The taxpayer should report such income under the head IFOS in the ITR filed on the Income Tax Website.
Hope this helps!
Yes, dividend income is now taxable from FY 2021-22 onwards and it has to be reported under the head of IFOS.
You can read more about it here:
You need to pay Income tax on the net taxable income, i.e. after subtracting deductions, expenses, etc.
If the net taxable income is negative i.e. if there is loss, you can carry it forward when filing the ITR
Here are some of the articles which might help
The amount of TDS deducted shall reflect in your Form 26AS only and it will also reflect the name of the deductor.
Using the name of the deductor you can find out on which share you have received the dividend and you can also cross-check the same in your bank statement.
Yes, you are right, TDS is to be deducted when the dividend paid exceeds 5000 INR in a financial year. However, the 5,000 INR limit pertains to all the dividends an individual gets in a year, or the total dividend per shareholder that a company pays out in a year, is left to interpretation, and hence registrars and share transfer agents (RTA) are not taking any chances and are deducting TDS even on small amounts.
Hope this helps
You can submit a grievance on Income Tax Portal mentioning the issue and also attach the 26AS.
The other option is to leave it as it is and clarify it when the tax department sends the notice.
Consider that I have 10 shares each of 10 different Indian companies. Each of the 10 companies are declaring a dividend of INR 100 before the FY ends. Now I will be recieving 1000 as dividend from each company, thereby a total of 10,000.
The 5,000 dividend limit, is it applicable to each company / total dividend recieved by me in a year. If it is applicable to each company, then I would not attract TDS of 10% for dividend.
Also pl clarify, how would the company B know that I have got shares of Company A,C,D,E so on…
@Saad_C @Laxmi_Navlani @Divya_Singhvi @Kaushal_Soni @AkashJhaveri can you help with this?
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