ITR
Balance sheet and P&L in ITR-3
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Facts
ITR-3 asks for a profit and loss account and balance sheet where books are maintained. Where books are not required and not kept, the form has a no account case section with key figures.
Provisions and law
- Sec 44AA, Income-tax Act 1961 (now Sec 62, Income-tax Act 2025)Books of account must be kept by professionals and businesses above the income or turnover limits
- Sec 28, Income-tax Act 1961 (now Sec 26, Income-tax Act 2025)Profits and gains of business or profession are taxable
Analysis
For an F&O trader, the balance sheet can show capital, bank balance, margin with broker and any loans. Example: opening capital ₹5 lakh, profit ₹1 lakh, drawings ₹2 lakh, closing capital ₹4 lakh matched by bank and margin balances. Make sure it balances, because mismatches lead to defective notices.
Conclusion
- Decide whether you keep books
- If yes, prepare P&L and balance sheet
- If not, use the no account case section where allowed
- Check that the balance sheet balances
- File and keep workings
A Savvy can do this for you
Business or professional income return, ITR-3 (including F&O and intraday)
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