When filing the Income Tax Return (ITR) 3, taxpayers may encounter an error during the verification process related to the declaration of dividend income. This specific error states: "In Schedule OS/ Schedule EI, the amount of dividend income mentioned cannot be more than the dividend income reduced from Schedule BP. Kindly ensure that dividend income mentioned in schedule OS or schedule EI should be equal to dividend income reduced from Schedule BP."
Understanding the Schedules:
Schedule OS (Other Sources): This schedule captures income from various sources other than salary, house property, business/profession, and capital gains. Dividend income is a common entry in this schedule.
Schedule EI (Exempt Income): This schedule lists incomes that are exempt from tax. Dividend income up to a certain limit can be recorded here if it qualifies as exempt under tax laws.
Schedule BP (Business or Profession): This schedule is used to report income from business or profession, including any deductions made from this income.
Error: In Schedule OS / Schedule EI, the amount of dividend income mentioned is cannot be more than the dividend income reduced from Schedule BP;#; Kindly ensure that dividend income mentioned in schedule OS or schedule EI should be equal to dividend income reduced from Schedule BP.
The error occurs when the dividend income reported in Schedule OS or Schedule EI exceeds the amount reduced from the income in Schedule BP. Essentially, there is a discrepancy in the reporting of dividend income across these schedules.
To resolve this error, ensure that the dividend income reported in Schedule OS or Schedule EI matches the dividend income reduced from Schedule BP.
Expected Solution:
1) Part A - P & L > (Add) Credits to Profit and Loss Account > 14. Other Income (iii) Dividend income > Save.
2) Schedule BP > (Edit) A. Business or profession other than speculative business and specified business > (Add) 3. Income/ receipts credited to profit and loss account considered under other heads of income or chargeable u/s 115BBF or chargeable 115BBG or chargeable u/s 115BBH > d. Other Sources (i) Dividend Income > Save.
3) Schedule Other Sources > 1. Gross income chargeable to tax at normal applicable rates > a. Dividends Gross > i.Dividend income [other than (ii)] > Save.
Bonus Tip:
1. Cross check 10. Information about accrual/receipt of income from Other Sources > 3. Dividend Income referred in Sl. No. 1a(i).
2. (Delete) A. Business or profession other than speculative business and specified business > 5. Income credited to Profit and Loss account (included in 1) which is exempt > c. Any other exempt income > b. Blank Income Nature.