Income Tax Return Form-3
ITR 3 form can be used by an individual or a Hindu Undivided Family (HUF) earning income from a business or a profession. ITR-3 is also required to be filed by a person whose income is chargeable to tax under “profits and gains of business or profession” in the nature of interest, salary, bonus, commission or remuneration.
Form ITR 3 can’t be used by any person other than an individual or a HUF. Also, an individual or a HUF not earning any income from business or profession can’t use ITR.
It is a type of Income Tax Return form to be used by individuals or HUF’s deriving income from proprietary business or profession. It is to be used for Assessment Year 2018-19 by the groups mentioned below to file their returns.
ITR 3 is applicable for those Individuals and HUFs who have income from proprietary business or are carrying on any profession.
The persons having income from following sources are eligible to file ITR 3:
- Carrying on a business or profession
- Return may include income from House property, Salary/Pension and Income from other sources
Who can file their income tax return on ITR-3?
Income Tax Return is prepared on ITR-3 when:
- an individual or an HUF is a partner in a firm AND
- where income chargeable to income-tax under the head “Profits or gains of business or profession” does not include any income except the income by way of any interest, salary, bonus, commission or remuneration, due to, or received by him from such firm.
In case a partner in the firm does not have any income from the firm by way of interest, salary, etc. and has only exempt income by way of share in the profit of the firm, the assessee shall use this form only; not Form ITR-2.
When to file ITR 3?
ITR-3 form is to be used when the assessee has income that falls into the below category:
- Income from carrying on a profession
- Income from Proprietary Business
- Along with income from a profession or proprietary business, return may also include income from House property, Salary/Pension and Income from other sources
Structure of the ITR-3 Form for AY 2018-19:
ITR-3 is divided into:
- Part A
- Part A-GEN: General information and Nature of Business
- Part A-BS: Balance Sheet as of March 31, 2018, of the Proprietary Business or Profession
- Part A-P&L: Profit and Loss for the Financial Year 2017-18
- Part A-OI: Other Information (optional in a case not liable for audit under Section 44AB)
- Part A-QD: Quantitative Details (optional in a case not liable for audit under Section 44AB)
- Part B: Outline of the total income and tax computation in respect of income chargeable total tax.
- Tax Payments: Details of advance tax, TDS, self-assessment tax
After this, there are the following schedules.
- Schedule-S: Computation of income under the head Salaries.
- Schedule-HP: Computation of income under the head Income from House Property
- Schedule BP: Computation of income from business or profession
- Schedule-DPM: Computation of depreciation on plant and machinery under the Income-tax Act
- Schedule DOA: Computation of depreciation on other assets under the Income-tax Act
- Schedule DEP: Summary of depreciation on all the assets under the Income-tax Act
- Schedule DCG: Computation of deemed capital gains on the sale of depreciable assets
- Schedule ESR: Deduction under section 35 (expenditure on scientific research)
- Schedule-CG: Computation of income under the head Capital gains.
- Schedule-OS: Computation of income under the head Income from other sources.
- 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 CFL: Statement of losses to be carried forward to future years.
- Schedule- UD: Statement of unabsorbed depreciation.
- Schedule ICDS – Effect of Income Computation Disclosure Standards on Profit
- Schedule- 10AA: Computation of deduction under section 10AA.
- Schedule 80G: Statement of donations entitled for deduction under section 80G.
- Schedule- 80IA: Computation of deduction under section 80IA.
- Schedule- 80IB: Computation of deduction under section 80IB.
- Schedule- 80IC/ 80-IE: Computation of deduction under section 80IC/ 80-IE.
- Schedule VIA: Statement of deductions (from total income) under Chapter VIA.
- Schedule AMT: Computation of Alternate Minimum Tax Payable under Section 115JC
- Schedule AMTC: Computation of tax credit under section 115JD
- Schedule SPI: Statement of income arising to spouse/ minor child/ son’s wife or any other person or association of persons to be included in the income of the assessee in Schedules-HP, BP, CG and OS.
- Schedule SI: Statement of income which is chargeable to tax at special rates
- Schedule-IF: Information regarding partnership firms in which assessee is a partner.
- Schedule EI: Statement of Income not included in total income (exempt incomes)
- Schedule PTI: Pass through income details from a business trust or investment fund as per section 115UA, 115UB
- Schedule FSI: Details of income from outside India and tax relief
- Schedule TR: Statement of tax relief claimed under section 90 or section 90A or section 91.
- Schedule FA: Statement of Foreign Assets.
- Schedule 5A: Information regarding apportionment of income between spouses governed by Portuguese Civil Code
- Schedule AL: Asset and Liability at the end of the year(applicable where the total income exceeds Rs 50 lakhs
How to fill ITR-3 Form?
Instructions for filling out ITR-3:
- 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.
Sequence for filling out parts and schedules:
The Income Tax Department advises assesses to follow the sequence mentioned below while filling out the income tax return.
1. Part A- General on page 1
3. Part B-TI and Part B-TTI
Major Changes in ITR 3
It is necessary to quote the Aadhaar number in the return of income. If any person does not have the Aadhaar Number but he had applied so, then he can quote the Enrollment ID of Aadhaar Application Form in the ITR.
Declaration of value of assets and liabilities
In 2016 taxpayers have to declare the value of assets and liabilities if the total income is more than Rs.50 lakhs but from now they have to declare also the description of movable assets and disclose the address of the immovable property.
Disclosure of Cash deposits during Demonetisation
It is necessary to fill this new column which introduced in all ITR forms if the taxpayer has deposited Rs 2 lakh or more during the demonetization period.
Disclosure of unexplained income and Dividend Income
New fields inserted in Schedule ‘OS’ to declare unexplained credit or investment and dividend received from domestic companies above Rs 10 lakhs. Such persons cannot opt for ITR 1 (Sahaj).
Registration number of Chartered Accountant Firm
It is mandatory to mention the registration number of the firm of Chartered Accountant which has done the audit in ITR forms.
Who is not eligible to file ITR 3?
As, ITR-3 form is used for business returns, any individual filing his/her personal income tax return, ie. Salaried employee or filing using ITR 1 form does not have to file ITR3.