A Complete guide
ITR 3 refers to individuals and HUFs that have revenue from business or professional sales and profits. Individuals with earnings from the preceding sources are entitled to file ITR 3:
- Carrying on a company or profession (both tax audit and non-audit situation)
- House property revenue, salary/pension, capital gains and interest from other assets can be included in the return.
NOTE: With effects from AY 2020-21, the maximum cap of Rs 1 crore for a tax audit is expected to be enhanced to Rs 5 crore if the taxpayer’s cash receipts are restricted to 5% of the gross receipts or turnover and if the taxpayer’s cash transactions are restricted to 5% of the combined transactions.
Major Changes in ITR 3 Form for AY 2020-21
The taxpayer must reveal this-
(a) the value of the cash deposits mostly in current accounts in bank exceeding Rs 1 crore.
(b) costs paid in excess of Rs 2 lakh for international travel.
(c) the cost generated on electricity over Rs 1 lakh.
Read – Mistakes to avoid filing ITR
- The ‘company type’ must also be declared whether a person is a director in a company or owns unlisted stock investments.
- In the event of short-term or long-term capital gains from the sale of the property or building, or even both, it is important to include the buyer’s information, i.e. name, PAN or Aadhaar card number, ownership share in percentage and address.
- Totally separate Schedule 112A for the measurement of long-term capital gains from the selling of STT-liable stock shares or corporate trust units.
- A taxpayer must provide the specifics of ‘all other revenue’ within ‘income from other sources’.
- The specifics of the deductions must be given against ‘profits from many other sources.’
- Under section 80EEA and section 80EEB, the ‘Schedule VI-A’ for tax deductions is revised to provide a deduction.
- The specifics of the ‘capital gains’ income and’ dividend ‘income must be given in the event of a corporate trust or pension fund.
- Information about the tax on secondary transfer price changes within section 92CECE (2A).
- Information of the applications for tax refunds relating to savings or payments or costs accrued between 1 April 2020 and 30 June 2020.
- While offering bank account information, if a taxpayer chooses several bank accounts for a reimbursement credit, the IT department can select any reimbursement processing account.
