A Complete Guide for Filing ITR 3 Form

Jun 25, 2018 | 5 months ago | Read Time: 3 minutes | By iKnowledge Team

What is ITR Form 3?

The ITR 3 is meant for persons and HUF who earn their income, profits and gains from business or profession. This means individuals who generate income from the below two sources are should file ITR 3:

  • Have a business or profession
  • Generate income from your property such as house, salary/pension and other sources

Who is eligible for filing ITR Form 3?

People who belong to the following category are eligible to file their returns through ITR form 3

  • Part of an inherited business or Profession
  • Drawing income from property, salary/pension from other sources.

Individuals and Hindu Undivided Family can file their return through ITR form 3 if their total income includes:

  • Income from a single or multiple House Property
  • Income from short or long-term capital gains
  • Income from business or profession practised under a proprietorship firm owned by the individual or the HUF
  • Income from winning a lottery, betting on races and other legal forms of gambling
  • Income from foreign assets belonging to the individual.

Who is not eligible for filing returns via ITR form 3

If individuals or HUF draw their income from a partnership or as partners from a business or profession, such individuals are not eligible for ITR filing under ITR form 3. In such a case, individuals or HUF need to file returns through the ITR 2.

The structure of ITR 3 form is divided into 2 parts and 23 schedules:

  • Part A consists of:
  • GEN: General information and Nature of Business
  • BS: Balance Sheet as of March 31, 2018 of the Proprietary Business or Profession
  • P&L: Profit and Loss for the Financial Year 2017-18
  • OI: Other Information (optional if you are not eligible for audit under Section 44AB)
  • QD: Quantitative Details (optional if you are not eligible for audit under Section 44AB)

 

  • Part B summarizes the total income and tax computation with respect to income chargeable to tax.

Ways to File Income Tax through ITR Form 3

There are 2 ways of filing an income tax return through the ITR Form 3: Online and Offline modes. Once an income tax return is filed by an individual, the individual gets an acknowledgement in ITR V from the Income Tax Department. The acknowledgement can also be downloaded from the website.

Individuals will have to submit the duly completed form to the Income Tax Department’s CPC office in Bangalore within 10 days of e-filing or e-verify.

What is the sequence to fill ITR 3 form?

The easiest way to fill ITR 3 Form is in the following order:

  1. Part A which has the general information
  2. Schedules
  3. Part B TI and Part B TTI
  4. Verification

What are the major changes made in ITR 3 form?

It has become mandatory to provide the Aadhar number while filing a return of income. If an individual does not have an Aadhar number but has applied for one, he or she can provide the enrolment identification number of the Aadhar application form when filing the ITR.

  • Declaration of valuable assets and liabilities

Before 2016, Taxpayers whose total income exceed INR 50 lakhs, would have to declare assets of income and liabilities. From 2016 onwards, taxpayers would have to provide detailed information of movable assets in their declaration. Moreover, while doing so, taxpayers will have to disclose the address of the immovable property, if any.

  • Disclosure of cash deposit during demonetization

After demonetisation, a new column has been introduced in all tax return form. Taxpayers will have to provide information as per instructions if they have deposited INR 2 lakh or more during the time of demonetisation.

  • Disclosure of unexplained income and Dividend Income

In the recent year, the Schedule ‘OS’ will contain new fields to assist taxpayers while filing returns. Under these fields, individuals will have to declare unexplained credit or investment, as well as a dividend that exceeds more than INR 10 lakhs. Persons who have received such dividends from domestic companies cannot opt for ITR 1 of the Indian tax system.

  • Registered number of Chartered Accountant Firm

From now on, individuals will have to provide details of the firm performing an audit. Additionally, the registration number of the Chartered Accountant will have to be mentioned in the ITR forms.

Advt. no.: IA/Jun 2018/4130


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