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Switching from ITR 4 to ITR 3

Adaikkalaven Muthu (113 Points)

31 July 2023

Is there any condition or compliances to be satisfied for Switching from ITR 4 to ITR 3 & vice versa

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CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 31 July 2023

For ITR 4 means till date you have opted for presumptive taxation @ 8% but if in case if you have capital gains in this year or any business you have started and income from that then you should file ITR 3 as for that there is no such compliances but once you have opted ITR 3 then the presumptive taxation of ITR 4 has been withdrawn for next 5 years as you have leaved that facility

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bipinchandra (article) (60 Points)
Replied 31 July 2023

IN ITR 3

Part A - P& L (Item No. 61) Please fill up item No. 61 only in case you are declaring income from any business activity on presumptive basis as per section 44AD. Please also ensure that the receipts/income from such business activity should not be included in the proprietary business or profession being reported at item Nos. 1 to 60. In the table, please enter the name of business, business code and descripttion of business. The applicable business code can be selected from the list provided at the end of this instruction. The gross turnover or receipts from the business during the financial year should be reported at column 61(i). The break-up of total turnover in terms of turnover realised through digital modes and turnover realised through other modes (cash etc.) should also be furnished at columns 61(ia) and 61(ib) respectively. The presumptive income from the business should be reported at column 61(ii), which is required to be computed @ 6% in respect of turnover realised through digital modes and @ 8% in respect of turnover realised through other modes (cash etc.). In case you have actually earned income at the rates higher than the specified percentage of turnover (i.e. 8% or 6%, as applicable), please note that you have to declare income at such higher rate. However, if the income being declared is less than the specified percentage of turnover, it is mandatory to maintain books of accounts and get the same audited under section 44AB. In such case, the details of tax audit have to be mentioned in Part-A (General) - Audit information and the details of income etc. have to be reported in the regular columns i.e. item No. 1 to 60. Part A - P& L (Item No. 62) Please fill up item No. 62 only in case you are declaring income from any professional activity on presumptive basis as per section 44ADA. Please also ensure that the receipts/income from such profession activity should not be included in the proprietary business or profession being reported at item Nos. 1 to 60. In the table, please enter the name of profession, business code and descripttion of profession. The applicable business code can be selected from the list provided at the end of this instruction. The gross receipts from the professional activity during the financial year should be reported at column 62(i). The presumptive income from the professional activity should be reported at column 62(ii), which is required to be computed @ 50% of gross receipts. In case you have actually earned income at the rates higher than the specified percentage of gross receipts (i.e. 50%), please note that you have to declare income at such higher rate. Instructions to Form ITR-3 (A.Y 2019-20) Page 9 of 67 However, if the income being declared is less than the specified percentage of gross receipts, it is mandatory to maintain books of accounts and get the same audited under section 44AB. In such case, the details of tax audit have to be mentioned in Part-A (General) - Audit information and the details of income etc. have to be reported in the regular columns i.e. item No. 1 to 60. Part A - P& L (Item No. 63) Please fill up item No. 63 only in case you are declaring income from business of plying, hiring or leasing of goods carriages on presumptive basis as per section 44AE. Please also ensure that the receipts/income from such business activity should not be included in the proprietary business or profession being reported at item Nos. 1 to 60. In the first table, please enter the name of business, business code and descripttion of business. The applicable business code can be selected from the list provided at the end of this instruction. In the second table at column 63(i), please enter the details of registration No., ownership, tonnage capacity, period of ownership and presumptive income in respect of each goods carriage in the respective column. These details are to be furnished separately for each goods carriage owned during the year, in separate rows, upto a maximum number of ten vehicles. In the column on ownership [column No. (2)], please indicate whether the goods carriage was engaged for plying, hiring or leasing by the assessee. In the column on period of ownership [column No. (4)], please mention the number of months for which the goods carriage was engaged in plying, hiring or leasing by the assessee. The total presumptive income from the business of goods carriages should be reported at column 63(ii), which is the aggregate amount of presumptive incomes from each goods carriage reported at column (5) of the second table. In case you have actually earned income at the rates higher than the specified rate per vehicle per month, please note that you have to declare income at such higher rate. However, if the income being declared is less than the specified rates per vehicle, or number of vehicles exceeds ten at any time during the year, it is mandatory to maintain books of accounts and get the same audited under section 44AB. In such case, the details of tax audit have to be mentioned in Part-A (General) - Audit information and the details of income etc. have to be reported in the regular columns i.e. item No. 1 to 60. Part A - P& L (Item No. 64)