EVERYTHING YOU NEED TO KNOW ABOUT FORM ITR-3

Who is eligible to file ITR-3?

Form ITR-3 is  applicable for Individuals and Hindu Undivided Family (HUF) having income from profits and gains of business or profession.

Who is not eligible to file ITR-3?

This ITR Form should not be used by an Individual or HUF who is eligible to file ITR-1, ITR-2 or ITR-4.

This ITR Form can be filed with the Income-tax Department electronically on the e-filing web portal of Income-tax Department (www.incometaxindiaefiling.gov.in) and verified in any one of the following manner –

(i) digitally signing the verification part, or

(ii) authenticating by way of electronic verification code (EVC), or

(iii) by sending duly signed paper Form ITR-V (Acknowledgment) by post to CPC at the following address –

Post Bag No. 1, Electronic City Office, Bengaluru- 560500, Karnataka.

The Form ITR-V should reach within 120 days from the date of e-filing the return of income.

However, in a case where accounts are required to be audited under Section 44AB of the Income Tax Act, it is mandatory to verify the return of income electronically using a digital signature.

In case an assessee is required to furnish a report of audit under Sections 10AA, 44AB, 44DA, 50B, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA, 92E, 115JB or 115JC of the Income Tax Act, the assessee shall file such report electronically at least one month before the due date of filing the return of income.

What are the obligations to file Form ITR-3?

Every Individual or HUF whose total income before allowing deductions under Chapter VI-A of the Income-tax Act, exceeds the maximum amount which is not chargeable to tax is obligated to furnish his return of income. The claim of deduction(s) under Chapter VI-A is to be mentioned in Part C of this ITR Form. In case of any doubt, please refer to relevant provisions of the Income-tax Act. The maximum amount which is not chargeable to income tax for Assessment Year 2020- 21, in case of different categories of individuals and HUF are as follows;

1.In case of an individual, being resident in India, who is of the age of 60 years or more at any time during the previous year 2019-20 but below the age of 80 years- Rs.3,00,000.

2.In case of an individual who is below the age of 60 years or a Hindu Undivided Family (HUF)- Rs.2,50,000.

3.in case of an individual, being resident in India, who is of the age of 80 years or more at any time during the previous year 2019-20- Rs.5,00,000.

How do I file my ITR-3 Form?

A taxpayer has to compulsorily file ITR-3 online. The ITR-3 can be filed Online/Electronically:

By furnishing the return electronically under digital signature

By transmitting the data electronically and then submitting the verification of the return in Form ITR-V

If you submit your ITR-3 Form electronically under digital signature, the acknowledgment will be sent to your registered email id. You can also choose to download it manually from the income tax website. You are then required to sign it and send it to the Income Tax Department’s CPC office in Bangalore within 120 days of e-filing. Remember that ITR-3 is an annexure-less form i.e. you do not have to attach any documents when you send it.

Major Changes in ITR form 3 for AY 2021-22:

• Since 1st April 2020, the recipient of the dividend will be liable to pay tax. Relevant sections such as section 10(34), 10(35), 115-O, etc., have been amended in the Act. Accordingly, suitable changes are incorporated in the ITR form.
• The taxpayers are given relaxation on payment of advance tax liability if the dividend is not received. Hence, the ITR form allows the taxpayers to enter quarterly details of dividend income so that interest under section 234C can be computed for default in payment of advance tax.
• As per amendment by the Finance Bill 2021 in section 44AB, the threshold limit of tax audit is increased to Rs.10 crores from Rs.5 crores if the cash payments are less than 5 per cent of the total amount of sales or turnover. The corresponding amendment is incorporated in the ITR form.
• The Schedule DI inserted for the AY 2020-21 to claim deductions for investments or expenditures made in the extended period (1st April 2020 to 30th June 2020) is removed in the ITR form of AY 2021-22.
• Schedule 112A and Schedule 115AD(1)(b)(iii) proviso are modified with an additional column to mention the details of nature of securities transferred for the resultant capital gains tax under section 112A or section 115AD(1)(b)(iii) of the Income Tax Act. The schedules are also modified to enable the taxpayer to give information for the sale price, fair market value and the cost of acquisition of the security.
• Part-A General Information is modified where the taxpayer is given to choose the alternative option of new tax regime under section 115BAC.
• The taxpayer having income from business or profession and opting for an alternative tax regime is required to mention the date of filing Form no.10-IE and its acknowledgement number.

Note:

The due date for filing ITR-3 in case of a taxpayer subject to tax audit has been extended to 15th February 2022 from 31st October 2021 for the AY 2021-22 (FY 2020-21). The due date for furnishing tax audit report is extended to 15th January 2022.

The threshold limit of Rs 1 crore for a tax audit is proposed to be increased to Rs 5 crore with effect from AY 2020-21 (FY 2019-20) if the taxpayer’s cash receipts are limited to 5% of the gross receipts or turnover, and if the taxpayer’s cash payments are limited to 5% of the aggregate payments.