Upload Level ValidationITR3Category of Defect B/D

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This query is : Resolved

Quick Summary

If you're using presumptive taxation in ITR-3 and encounter an 'Upload Level Validation ITR3 Category of Defect B/D' error, it means your dividend income figures need checking. Ensure the dividend income reported in Schedule OS exactly matches any amount adjusted in Schedule BP. While the error mentions books of account, it's crucial to reconcile these figures even when not maintaining them under the presumptive method to avoid a defective return.

Adi

Adi (Querist)

16 July 2026 I am opting for presumptive taxation mode in ITR-3. I am getting the following error in the final validation step.

Upload Level ValidationITR3Category of Defect B/D
You will be allowed to upload the return. There is a possible defect present in the return or some of the deduction/claim may not be allowed.
1 Error(s) found

Error Description
If you are required to prepare/maintain books of account and dividend income is reported in Profit & Loss Account, please ensure consistency between amount of dividend income reduced in Sch. BP and dividend income reported in Sch OS. Please ignore if not applicable.

Suggestions
Kindly ensure that dividend income mentioned in schedule OS should be equal to dividend income reduced from Schedule BP.

So what to do? Do I have to made entries as suggested or just upload by neglecting?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

16 July 2026 To fix the Upload Level Validation ITR3 Category of Defect B/D error, ensure that the total Dividend Income reported in Schedule OS matches the exact amount being subtracted/adjusted out of your business profits in Schedule BP. Do not ignore the warning, as failing to match these amounts often leads to a Section 139(9) defective return notice from the tax department.

Adi

Adi (Querist)

16 July 2026 Thank you. But the error description says - if you are required to maintain books of account - and this is not the case when I choose presumptive method without books.... So is it ok to enter those values in P& L as well as in BP as suggested?

Adi

Adi (Querist)

22 July 2026 I think now one has the answer.

Adi

Adi (Querist)

23 July 2026 I think, I am getting good replies at reddit. https://www.reddit.com/r/IndiaTax/comments/1v2bs0d/upload_level_validation_itr3_category_of_defect_bd/

Manish

Manish (Expert)

04 November 2026 Do not create artificial P&L entries merely to remove this warning. The message you quoted is conditional: it concerns dividend income included in the P&L where books are required.

If you are validly using presumptive taxation without books, and no dividend has been included in business profits, there is no such dividend to subtract from those profits. Report the actual taxable dividend in Schedule OS and check that the return does not accidentally contain a P&L dividend entry or a corresponding BP reduction. If dividend was included in the P&L, reconcile the amount actually removed from business profits with its reporting under Other Sources to avoid double taxation.

A B/D warning permits upload, but does not guarantee acceptance on processing. Please confirm the assessment year, utility version, whether books are legally required in your case, and whether any P&L dividend/BP adjustment is populated. Use the latest utility and raise an e-filing grievance with a redacted screenshot if the conditional warning persists despite correct entries.

Reference: CBDT ITR-3 Validation Rules, AY 2026-27, Table 1 (distinction between blocking Category A and upload-permitted B/D).

Adi

Adi (Querist)

04 November 2026 Actually I successfully filed the returns by following the suggestion in error message and got refund.

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