A comprehensive guide to understand the ITR 3
Category: Income Tax, Posted on: 07/01/2022 , Posted By: Webtel
Visitor Count:273

This ITR is for an individual or Hindu undivided family having income from both the business and profession (both audit and non-audit case), then it is the ITR-3 to be taken into consideration. As a result, if you making a living through a proprietary business or a profession concerned to accountancy, engineering, clinical, designing, and so on, you can file ITR-3 for income tax returns. The sources of income for ITR 3 shall include:

  • Income from Salary/Pension.

  • Income from multiple House Properties.

  • Income from Capital Gains (Both Short Term and Long Term)

  • Income from Business and Profession.

  • Income from Other Sources (including winning from Lottery, bets on Race Horses, and other legal means of gambling)

  • Foreign Assets/Foreign Income.

  • Agricultural Income more than Rs. 5000.

  • Resident not ordinarily resident and a Non-resident.

  • A Director of listed and unlisted companies will be required to file their returns in ITR-3.

  • Individual was a partner in any Firm and receiving salary, interest, remuneration etc.

What is ITR-03?

Who is Eligible to File ITR 3 for AY 2021-22?

ITR-3 structure is ideal for any individual or Hindu Undivided Family (HUF) whose total income for a particular tax year includes the following:

  • Income from a company or profession through a proprietorship firm in which the taxpayer is a proprietor.

  • Income obtained from one or more housing properties.

  • Prizes won in lotteries, horse racing, and other activities that fit under Income from Other Sources.

  • Income resources using resources in a nation other than India.

  • Income generated by short-term or long-term capital increases.

  • Share of Profit from Firm Only.

Who cannot file ITR 3 for AY 2021-22?

  • Individuals those who opt for presumptive taxation scheme.

What documents are required to file ITR-3?

Following documents are required for successful filing of the ITR-3:

  • First thing, you will need to check your Annual Information Statement

  • Profit and loss statement and Balance sheet for the previous year.

  • You will need Form-16 issued by your employer- in case of income from salary.

  • Form-16A (TDS Certificate) issued by TDS Deductor.

  • Details of Chartered Accountant conducting Tax audit in case the person is covered under section 44AB.

  • Copies of books of accounts required to be maintained as per section 44AB i.e. Cash book, Journal book, Sales and Purchase register etc. in case of business and Receipt book in case of profession.

  • Form-26AS to verify TDS on salary as well as TDS other than salary. Form 26AS could be downloaded from the income tax portal.

  • In case you have received rent from any rented house property then you will require local tax payment, interest on borrowed capital if any, and tenant details.

  • If you have any capital gain transaction then you will be required the summary of profit or loss statement, for computation of capital gain.

  • For claiming tax-saving deduction under 80C, 80D, or 80G, such as life insurance premium, health insurance expenditure, donations, rent receipts or relevant documents need to be produced as proof of such expenditure made.

How to file ITR-3 Stepwise?

The taxpayers have been divided into different groups, based on their source of income and the limits. Accordingly, each taxpayer has to file the type of return that applies to them.

The user can file ITR in two ways:

  • Online mode through E filing portal

  • Offline mode through offline utility

There are the following methods for filing ITR-3:

  • Filing a return electronically under digital signature.

  • Transmitting information in the ITR-3 structure electronically using an electronic verification code.

  • Transferring the information in ITR-3 structure electronically followed by the accommodation of return confirmation in.

Pre-requisites for filing ITR-3:

  • Registered user on E-filing portal with a valid username and password.

  • The status of the pan should be active.

  • ITR-3 has many sections that you need to fill before submitting the form, including Part-A general information and Part B- Balance Sheet, Profit, and Loss Account, Quantitative details of goods traded mandatory in case, etc.

Steps To File ITR-3 In Online Mode:

  1. Login into the Income-tax portal, by filing the mandatory fields.

  2. Click on the e-file under the income tax return link.

  3. Select assessment year 2021-2022, then continue.

  4. Select mode of filing as online

  5. Select the status that applies to you and then select, ITR-3, if applicable to you.

  6. Select the checkboxes applicable to you.

  7. After reading the instructions, fill in all the applicable and mandatory fields, as Form ITR-3 has been divided into two parts. It has Thirty-Six Schedules.

    The details of these parts and Schedule are as under:

  8. Part-A

    Schedule

    Meaning

    GEN

    General information related to Assessee

    BS

    Balance Sheet

    P & L

    Profit and Loss Account

    OI

    Other Information (option in case of Tax Audit U/s 44AB)

    QD

    Quantitative details of Goods traded(option in case of Tax Audit U/s 44AB)

    Part-B (Schedule related to Computation)

    In ITR Form

    Meaning

    Schedule - S

    Salary Head Income

    Schedule - HP

    House Property Income

    Schedule - BP

    Business or Profession

    Schedule - DPM

    Depreciation on Plant and Machinery

    Schedule - DOA

    Depreciation on Other Assets

    Schedule - DEP

    Summary of Depreciation of All Assets

    Schedule -DCG

    Deemed Capital Gain on Sale of Depreciable Assets

    Schedule - ESR

    Deduction U/s 35(Expenditure on Scientific Research)

    Schedule - CG

    Capital Gain

    Schedule - OS

    Other Sources Income

    Schedule - CYLA

    Current Year Loses

    Schedule - BFLA

    Unabsorbed Brought Forward Loses

    Schedule - CFL

    Carry Forward Losses

    Schedule - UD

    Unabsorbed Depreciation

    Schedule - ICDS

    Income Computation Disclosure Standards on profit

    Schedule –VI A

    Deductions under chapter VI-A

    Schedule - AMT

    Alternate Minimum Tax

    Schedule - AMTC

    Computation of Tax Credit

    Schedule - SPI

    Income of specified persons (spouse, minor child etc.) includable in income of the assessee

    Schedule - SI

    Income which is chargeable to tax at Special Rates

    Schedule - IF

    Information of Partner regarding partnership Firm

    Schedule - EI

    Exempted Income (Income not included in Total Income)

    Schedule -PTI

    Pass Through Income details from business trust

    Schedule -TPSA

    Tax on secondary adjustments

    Schedule -FSI

    Details of Income accruing or arising outside Income

    Schedule -TR

    Statement of Tax Relief claimed under section 90 or section 90A or Section 91.

    Schedule - FA

    Statement of Foreign Assets.

    Schedule –5A

    Statement of apportionment if Income between Spouses governed by Portuguese CIVIL CODE

    Schedule - AL

    Statement of your Assets and Liability at the end of the year. It is mandatory if your Total Income exceeds Rs. 50 lakhs.

    Schedule - GST

    Information regarding turnover/gross receipt reported for GST.

    Part-B

    Part B-TI

    Total Income

    Part B -TTI

    Tax liability on total income

  9. Review your pre-filled data and confirm at the end of each section.

  10. In case there is a tax liability, you will be shown a summary of your tax computation, you can either choose to pay now or pay later, whichever option is suitable.

  11. In case you are eligible for any refund, preview the page and proceed to submit.

  12. The taxpayer can choose any of the applicable verification options under the ‘taxes paid and verification tab’

  13. To verify all the details entered, click on Preview and submit button.

  14. Submit the ITR.

  15. E-verification can be done by entering the AADHAR OTP when asked for.

  16. The AADHAR OTP has to be filled under 60secs, otherwise, the ITR will be auto-submitted, which will have to be verified later under the ‘My Account section’ within 120 days.

  17. You can view the uploaded ITR.

If you are using OFFLINE MODE UTILITY, then download to prefill the data and fill schedule as discussed above in the tables above for online mode. After filling in all respective information, generate a JSON file and upload it with the help of the utility.

Is there any easy way to file ITR-3?

Now file your ITR-3 smoothly using Webtel’s hassle-free Income Tax filing software, i.e., Web-e-Tax. Web-e-Tax allows you to bulk upload and e-filing income tax returns securely, accurately, and quickly. Moreover, its additional functionalities let you do easy tax calculation and deduction and even digitally sign in the ITR forms. So, if you want to know more in-depth about Web-e-Tax and to book a free demo, then click here OR if you are an existing user of Webtel’s Income Tax filing solution, then click here to know the process of filing ITR-3 through Web-e-Tax.


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