Switch ITR4 to ITR3

Hi Amandeep,

Since you are switching from ITR-4 (presumptive income) to ITR-3 (for individuals/partnerships having income from business/profession with detailed accounts) due to capital gains and ineligibility for presumptive scheme, here’s how you should report your income in ITR-3:

Key Points:

1. Balance Sheet and Profit & Loss Account

   • You need to upload or fill details of your balance sheet and P&L account in the respective schedules in ITR-3.

   • This is mandatory in ITR-3 as it is for taxpayers maintaining books of accounts.

2. Income from Presumptive Business (Section 44AD)

   • Since you have some income under presumptive scheme earlier or partly, in ITR-3 you cannot declare income under Section 44AD directly as presumptive.

   • You have to disclose the actual profit/loss as per your books of accounts (P&L).

   • The presumptive scheme income is generally not applicable in ITR-3 because you are maintaining detailed accounts now.

3. Income from Capital Gains

   • Report your capital gains separately under the Capital Gains schedule.

   • Make sure you compute short-term or long-term capital gains as per applicable rules.

Where to Show Income in ITR-3 Columns:

Important Notes:

• In ITR-3, you cannot claim presumptive income; you must report actual income based on books.

• Make sure you keep your audited financial statements ready if your turnover or income exceeds audit limits.

• Maintain supporting documents for capital gains computations (purchase/sale proofs, indexation, etc.).