INSTRUCTION FOR ITR 3


 

1.             Assessment Year for which this Return Form is applicable

 

This Return Form is applicable for assessment year2021-22only, i.e., it relates to income earned in Financial Year2020-21.

 

2.             Who is eligible to use this Return Form?

 

This Return Form is to be used by an individual or a Hindu Undivided Family who is having income under the head “profits or gains of business or profession” and who is not eligible to file Form ITR-1 (Sahaj), ITR-2 or ITR-4 (Sugam).

 

3.              Manner of filing this Return Form

 

This Return Form can be filed with the Income-tax Department electronically on the e- filingweb portal of Income-tax Department (www.incometaxindiaefiling.gov.in) [www.incometax.gov.in from 7-June-2021]and verified in any one of the following manners

(i)          digitally signing the verification part, or

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

(iii)       Aadhaar OTP, or

(iv)      by sending duly signed paper Form ITR-V Income Tax Return Verification Form by post to CPC at the following address

“Centralized Processing Centre, Income Tax Department, Bengaluru— 560500, Karnataka”.

The Form ITR-V-Income Tax Return Verification Form should reach within 120 days from the date of e-filing the return.

 

The confirmation of the receipt of ITR-V at Centralized Processing Centre will be sent to the assessee on e-mail ID registered in the e-filing account.

 

However, in a case where accounts are required to be audited u/s 44AB, it is mandatory to verify the return electronically under 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, he shall file such

report electronically one month before the due date of filingof return of income.

 

4.                  Filling out the ITR V-Income Tax Return Verification Form

 

Where the Return Form is furnished in the manner mentioned at 3(iv), the assessee should print out Form ITR-V-Income Tax Return Verification Form. ITR-V-Income Tax Return Verification Form, duly signed by the assessee, has to be sent by ordinary post or speed post

only to Centralized Processing Centre, Income Tax Department, Bengaluru–560500 (Karnataka).

 

4.      Key changes (as compared to ITR for AY 2020-21)

 

Ø  Option to avail benefit u/s 115BAC is provided in ITR.

If new tax regime is opted, loss under the head House Property is not allowed to be set off and the following deductions/allowances cannot be claimed

1)   Certain allowances u/s section 10 (LTA, HRA, allowances granted to meet expenses in performance of duties of office, Allowances granted to meet personal expenses in performance of duties of office, Allowance received by MP/MLA/MLC, Standard deduction in case of Minor child)

2)                                           Deductions           u/s16   (Standard    Deduction,   Entertainment        allowance  and Professional tax)

3)       Interest payable on borrowed capital for self-occupied property 4)Standard Deduction in case of family pension

5) Chapter VIA Deduction (life insurance, health insurance premium, pension funds, provident fund, donation etc. except Contribution made by employer to notified pension scheme u/s 80CCD (2))

6)   Deduction u/s 10AA in respect of newly established Units in Special Economic Zones

7)  Additional depreciation u/s 32(1)(iia) 8)Deduction u/s 32AD, 33AB,3ABA, 35AD,35CCC

9) Deduction under sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub- section (1) or sub-section (2AA) of section 35

 

Ø  Option of Filing ITR in response to notice u/s 153A and 153C is removed from ITR as requirement to file ITR under these sections is omitted.

Ø  In AY 2020-21 , the threshold limit for a person carrying on business was increased from one crore rupees to five crore rupees in cases where the cash receipts or payments by a business don’t exceed 5% of the such receipts or such payments, however in AY 2021-22 , the limit of five crore rupees is increased to ten crore rupees

Ø  Loss (negative value) under “No books of account” at sl.no.65 in Sch P&L is restricted.

Ø  In schedule BP, Income/ receipts credited to profit and loss account considered under head “other sources” has been bifurcated into 2 parts as

o    “Dividend income” and

o    “Other than dividend income”

Ø  In Schedule DPM, the column "3a.Amount as adjusted on account of opting for taxation section 115BAC" and "3b. Adjusted Written down value on the first day of previous year (3) + (3a)" has been added . Hence corresponding mapping changes are made in schedule DPM

Ø  CBDT vide notification dated 20th September 2019 increased depreciation to 45% on motor cars, motor buses etc wrt assets purchased on or after the 23rd day of August, 2019 but before the 1st day of April, 2020 and is put to use before the 1st day of April, 2020. Therefore, no additions will be allowed in 45% block from the AY 2021-22 w.r.t to such assets.

Ø  In Schedule CG, the allowable difference between full value of consideration u/s.

50 C and value of property as per stamp authority has been increased from 1.05 times to

1.10 times

Ø  In schedule OS,

The existing drop related to “Dividend income” is bifurcated into 2 parts i.e “Dividend income [other than (ii)]” and “Dividend income u/s 2(22)(e)” and respective changes are done in sl.no.2e _DTAA field and in sl.no.10(i)_Quarterly breakup of Dividend income.

Dividend will now be taxable from Rs.1/- as the section 115BBDA is omitted. Accordingly, Interest expenditure u/s 57(1) to earn Dividend can be claimed at sl.no.3.

The existing drop down at Sl. No. 2d “115AD(1)(i)- Income received by an FII in respect of securities (other than units referred to in section115AB)" bifurcated into 2 drop downs as under:-

v  115AD(1)(i)-Income being Dividend received by an FII in respect of securities (other than units referred to in section115AB) @20%

v  115AD(1)(i)-Income being other than dividend income received by an FII in respect of securities (other than units referred to in section115AB) @20%

Further new drop downs are inserted in sl. No. 2d and Sl. No. 2e wrt “Interest referred to in section 194LC(1)” and Distributed income being Dividend referred to in section 194LBA