The Income Tax Act, 1961, and the Income Tax Rules, 1962 , of India require those who have earned income in India to file Income Tax Returns with the Income Tax Department of India. The ITR-3 Form is a part of this process of filing returns and is in accordance with the rules and regulations laid down by the Government of India.
The ITR-3 Form particularly applies to those Individuals and Hindu Undivided Families who are registered as Partners in a firm. As per Rule 12 of the Income Tax Rules, 1962, this form does not apply to those who are Proprietors of a firm. it is mainly for the business which includes partnership deals. It is also applicable for professionals but it should be a partnership profession.
ITR-3 can be used by an assessee who is an individual or HUF (Hindu Undivided Family) and who is a partner in a firm but does not have income from business or profession or carry business under proprietorship.
ITR3 form can be filed where taxable business income is only from the salary, interest, commission, remuneration or bonus receivable from the firm as a partner.
Income Tax Slab – Assessment Year 2016-17
Every individual whose total income before allowing deductions under Chapter VI-A of the Income-tax Act, exceeds the maximum amount which is not chargeable to income-tax is obligated to furnish his return of income. The deductions under Chapter VI-A are mentioned in Part C of this Return Form. In case of any doubt, please refer to relevant provisions of the Act. The maximum amount not chargeable to income tax in case of different categories of individuals is as follows:-
In case of an Individual (resident or non-resident) or HUF or Association of Person or Body of Individual or any other artificial juridical person
|Income Tax Slab||Income Tax Rate|
|Income upto Rs. 2,50,000||Nil|
|Rs. 2,50,000 to Rs. 5,00,000||10%|
|Rs. 5,00,000 to Rs. 10,00,000||20%|
|Above Rs. 10,00,000||30%|
a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).
b) Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by education cess calculated at the rate of two per cent of such income-tax and surcharge.
c) Secondary and Higher Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by secondary and higher education cess calculated at the rate of one per cent of such income-tax and surcharge.
d) Rebate under Section 87A: The rebate is available to a resident individual if his total income does not exceed Rs. 5,00,000. The amount of rebate shall be 100% of income-tax or Rs. 2,000, whichever is less.
Filing of Income Tax Returns ITR 3 Form
Individuals who fulfill any one of the following conditions should by law file their Income Tax Returns during a financial year:
- • Possesses a valid Credit Card
- • Pays for foreign travel, either for himself or another individual
- • Is the member of a Club where entrance fees charged is twenty five thousand or more
- • Occupies a particular floor area of an immovable piece of property
- • Is the owner of a vehicle
Why to efile ITR 3 Form
Benefits on non-filing of returns are more than the penal provisions imposed for non-filing. Following are the benefits of filing of the income tax returns:
Work as Evidence in court trial while making claims: This is one of the rare benefits of filing the ITR every year. It can help you in the future for an example, in case of accidental death of any one member(s) during a road accident or any other claims. In a court trial, insurance companies need the proof of income to arrive at the amount of accidental claim, and if any return is missing for the previous three years, this could lower the claim amount or even can become no claim because the court takes ITR as evidence.
Eligibility in Home / Personal loan applications from Banks: Income tax returns of last three years are the basic need for all loan cases like housing, business or personal loan, and are a declaration of your income. Before granting the loan, banks want to know your financial capacity and your income details as shown by you in income tax returns.
If you are planning immigration outside India: The High Commissions of various countries or VFS centres across India have records of fabricated documents, including income tax returns of visa applicants. They want to know if you are financially sound before they issue you a visa and for this purpose they will rely on your ITR. Every assessee should file genuine returns, especially if one intends to go abroad in the future.
For obtaining government tenders, registration on panels: The value of business profiles of various corporate agencies, contractors, professional service providers or individuals is dependent on the yearly income tax returns. Sometime contractors have very good history of procuring heavy projects in their line, be it a service or works contract, but they lack the knowledge of the benefits of filing returns on time or the importance of filing on factual provisions.
For appointment in Judicial & Class one Jobs: In judicial jobs or where a candidate is a chartered accountant or lawyer even in Territorial Army needs to demonstrate annual professional income for the judicial/judge’s, senior auditors post income tax return is presented.
For obtaining LIC/GIC agency: Insurance corporations, before allotting an agency, check the financial health and habits of the agents. Previous three years’ returns are called for before allotting any agency.
For Start-up Funding: Many a time, seed, angel or VC investors include income tax returns filed till date in their statistical analysis. From returns they not only want to know your profitability but also your scalability, various cost parameters, and validity of the data produced from the auditor’s report.
Last Date for ITR 3 tax returns
Last date for filing Income Tax return for year FY 2015-16 is up to 31st July
Who cannot use ITR 3 Form?
Form ITR – 3 cannot be used by an individual or HUF whose total income for the year includes income from Business or Profession under any proprietorship
Who can use ITR 3?
Return Form ITR – 3 can be used by an individual or a Hindu Undivided Family who is a partner in a firm and income chargeable to income-tax in his/its hand under the head “Profits or gains of business or profession” does not include any other income, except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from such firm.
In case a partner of 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, he shall use Form ITR – 3 only and not Form ITR-2.
Newly Required Fields in ITR 3
- Aadhar Number: Individual is mandatorily required to specify Aadhar Number if (s) he has
- Passport Number: Individual is mandatorily required to specify Aadhar Number if (s) he has
- Return Filed u/s 119(2) b: Assessee is required to specify if the return is filed in pursuant to order, instruction or direction of CBDT (Board).
- Details of Bank Account held in India at any time during the previous year (excluding dormant account)
- Date of Formation of HUF
- Details of Income Taxable under the Double Taxation Avoidance Agreement (DTAA)
- Reporting of Agriculture income
- Tax Paid Payment, TDS from Salary & TDS on Income schedule is moved to page 3 which was on Page 10 previously in ITR 2 (old forms)
- Details of Income from Property if it is deemed to be let out: Previously only the income from property which is let out is required to be reported.
What is the structure of the ITR 3 Form?
ITR 3 is divided into:
- Part A: General Information
- Part B-TI: Computation of Total Income
- Part B-TTI: Computation of tax liability on total income
- Details to be filled if the return has been prepared by a Tax Return Preparer
- Schedule S: Details of income from salaries
- Schedule HP: Details of income from House Property
- Schedule CG:. Computation of income under Capital gains.
- Schedule OS: Computation of income under 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 VIA: Statement of deductions (from total income) under Chapter VIA.
- Schedule 80G: Statement of donations entitled for deduction under section 80G.
- 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 assessee in Schedules-HP, CG and OS.
- Schedule SI: Statement of income which is chargeable to tax at special rates
- Schedule EI: Details of Exempt Income
- Schedule IT: Statement of payment of advance-tax and tax on self-assessment.
- Schedule TDS1: Details of tax deducted at source on salary.
- Schedule TDS2: Statement of tax deducted at source on income other than salary.
- Schedule FSI: Statement of income accruing or arising outside India.
- Schedule TR: Details of taxes paid outside India.
- Schedule FA: Details of Foreign Assets.
- Schedule 5A: Statement of apportionment of income between spouses governed by Portuguese Civil Code.
How do I fill out the ITR 3 Form?
Documents which you should keep in hand before filling out your ITR-1 form are:
- Form 16s, issued by all your employers for the given Financial Year
- Form 26AS – remember to verify that the TDS mentioned in Form 16 matches the TDS in Part A of your Form 26AS
- If you have not been able to submit proof of certain exemptions or deductions (such as HRA allowance or Section 80C or 80D deductions) to your employer on time, keep these receipts handy to claim them on your income tax return directly.
- PAN card
- Interest from bank account details – bank passbook or FD certificate
What do the following terms mean?
What is Revised Return: If you have already filed your income tax return but you later discover that you have made a mistake in it, you can re-file. This is called a Revised Return. For the Financial Year 2015-16, you can file your Revised Return till March 31, 2017.
What is Notice Number: You should fill this in only if you are filing your return in response to a notice from the Income Tax Department.
What is Advance Tax: For salaried individuals, TDS mostly takes care of advance tax payments. However you might have other forms of income – like interest on savings bank accounts, fixed deposits, rental income, bonds or capital gains. If tax on income is more than Rs. 10,000 per year, you are required to estimate your income and pay Advance Tax. This has to be paid in quarterly instalments in September, December and March.
What is Self Assessment Tax Payments: This is the difference between tax payable and tax paid and it needs to be paid before you file your return. When you fill out the form for the first time, you won’t know whether Self Assessment Tax has to be paid or not. So fill out the form first along with the Advance Tax details, if paid. Compute your income and if after computing, you find that tax is still payable pay it and then fill in the details in this section.
What is Annexure-less Return: ITR-1 Form is an Annexure-less return. This means that you do not have to attach any documents (such as Form 16/Form 26AS) with the ITR-1 Form
How do I file my ITR 3 Form?
You can submit your ITR-1 Form either online or offline. From the Financial Year 2013-14, all taxpayers earning more than Rs. 5 lakhs must furnish their Income Tax Returns electronically, through either Mode 3 or Mode 4 mentioned here.
- By furnishing a return in a physical paper form
- By furnishing a bar-coded return
- The Income Tax Department will issue you an acknowledgment at the time of submission of your physical paper return.
- By furnishing the return electronically under digital signature
- By transmitting the data electronically and then submitting the verification of the return in Return Form ITRV
If you submit your ITR-1 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.
Manner of filing this Return Form
This Return Form can be filed with the Income Tax Department in any of the following ways, –
- (i) by furnishing the return in a paper form;
- (ii) by furnishing the return electronically under digital signature;
- (iii) by transmitting the data in the return electronically under electronic verification code;
- (iv) by transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V;
Where the Return Form is furnished in the manner mentioned at 5(iv), the assessee should print out two copies of Form ITR-V.
NOTE: One copy of ITR-V, duly signed by the assessee, has to be sent by post to – Post Bag No. 1, Electronic City Office, Bengaluru— 560100, Karnataka. The other copy may be retained by the assessee for his record.
Filling out the acknowledgment
Only one copy of this Return Form is required to be filed. Where the Return Form is furnished in the manner mentioned at 5(i), the acknowledgment/ ITR-V should be duly filled.
Submission of ITR-1 Sahaj Form
The form can be submitted physically at any Income Tax Returns Office. An Acknowledgment Receipt can be obtained upon submission.
In case of Electronic Filing of the form there are two alternatives. Firstly, if a Digital Signature is obtained, the Form is uploaded online. Secondly, the Form is downloaded, printed, signed, and a copy of the acknowledgement is sent by post to the Income Tax Department’s office in Bengaluru.
ITRV can now be verified online Using Aadhaar Card or Electronic Verification Code (EVC). The EVC can be generated either via One Time Password sent to email and registered mobile number (if income is less than INR 5 Lakhs) or via Net Banking. After online verification Income Tax Assesses is not required to send ITRV to Bangalore CPC.
Please complete the Verification Section and Sign in the box given. Without a valid signature, your return will not be accepted by the Income- tax Department
This return can be prepared by a Tax Return Preparer (TRP) also in accordance with the Tax Return Preparer Scheme, 2006 dated 28th November, 2006. If the return has been prepared by him, the relevant details have to be filled by him and the return has to be countersigned by him in the space provided in the said item.
E-filing compulsory for a certain section of Income Earners
The Central Board of Direct Taxes (CBDT) has made it compulsory for Individual and Hindu Undivided Families earning an income in excess of Rupees Five Lakh to file their Tax Returns only through the E-Filing Process. The manual filing of returns is no more an option for Assessees who come under this category. Electronic Filing of their Tax Returns is the only way this category can file their Income Tax Returns.