ITR5 Filing
ITR-5 is an income tax return form prescribed by the Income Tax Department of India for filing returns by Partnership Firms, Limited Liability Partnerships (LLPs), Association of Persons (AOPs), Body of Individuals (BOIs), and similar entities. The form is primarily used by various types of business entities that are not classified as individual taxpayers, Hindu Undivided Families (HUFs), or companies.
Who Should File ITR-5?
ITR-5 is intended for the following types of entities:
Partnership Firms: Including both ordinary partnership firms and limited liability partnerships (LLPs).
Association of Persons (AOPs): An AOP is a group of individuals or entities formed for a common purpose, which could be for business or any other activities.
Body of Individuals (BOIs): A BOI refers to a group of individuals, such as a joint venture or any other association of individuals, who are not registered as a company or firm.
Limited Liability Partnerships (LLPs): LLPs are also required to file ITR-5, as they are considered separate entities under the tax law.
Co-operative Societies: These are organizations formed by individuals to serve their mutual interest, and they are required to file ITR-5 if they are not claiming exemptions under Section 11.
Trusts (not claiming exemption under Section 11): Certain trusts that do not claim exemptions under Section 11 (which applies to charitable or religious trusts) must file ITR-5.
Estate of Deceased or Property under Guardianship:
In cases where an individual has passed away, and the estate is being administered by a legal guardian, the return must be filed by the guardian of the estate using ITR-5.
Any Other Similar Entity:
Entities that do not fall under any other ITR category and are required to file an income tax return but are not specifically exempted under Section 11 of the Income Tax Act.
Purpose of Filing ITR-5
The purpose of filing ITR-5 is to ensure that business entities, such as partnership firms, LLPs, AOPs, BOIs, and other specified entities, fulfill their income tax obligations by reporting their income, deductions, and tax liabilities. The return also allows these entities to claim tax benefits or exemptions they are eligible for under various sections of the Income Tax Act.
Key Features of ITR-5
For Business and Non-Profit Entities:
ITR-5 is primarily for partnership firms, LLPs, and other business entities, but it can also be used by trusts, AOPs, BOIs, and cooperative societies that are required to file an income tax return.
Detailed Reporting:
ITR-5 requires detailed reporting of income from business, capital gains, interest, and other sources. Entities must also report details about deductions, exemptions, and tax paid.
Tax Computation: The form helps compute the total taxable income and the tax liability after considering deductions under sections like 80C, 80G, and 80-IA for specific types of income.
Capital Gains and Other Income: Entities must provide information on capital gains arising from the sale of assets, such as property, stocks, or business investments.
Audit Information:
If the entity’s accounts are audited, the audit report under Section 44AB must be submitted along with the ITR-5 form. For certain entities, the tax audit report is mandatory.
Depreciation: ITR-5 allows entities to report depreciation claimed on business assets in compliance with tax laws. Depreciation is an essential deduction for reducing taxable income for many business entities.
Partnership Firm Details: If the entity is a partnership firm, it must provide information on the partners and share of profits for each partner.
TDS Details: Any Tax Deducted at Source (TDS) on income received by the entity must be reported. Entities receiving income on which TDS has been deducted will need to provide details of TDS certificates.
Exemption Claims: Entities claiming exemptions or deductions, such as charitable deductions under Section 80G, or tax benefits for startups under Section 80-IA, must report the relevant information in ITR-5.
Documents Required for Filing ITR-5
To file ITR-5, the following documents are typically required:
Audited Financial Statements:
Balance Sheet, Profit and Loss Account, and Cash Flow Statement for the relevant financial year, audited by a qualified Chartered Accountant if applicable.
Tax Audit Report (Form 3CA/3CB):
If the entity is subject to tax audit under Section 44AB, the relevant tax audit report must be submitted.
Bank Statements: Bank statements or passbooks to report interest income, and any other transactions that need to be included in the return.
TDS Certificates: Form 16A, Form 16B, or Form 16C to provide details of tax deducted at source on the entity’s income.
Capital Gains Documents: Details of capital gains if the entity has sold assets like shares, property, or other investments during the year. This may include sale agreements, capital gains statements, and transaction reports.
Income Details: Income details from various sources, including business income, interest income, rent received, or other income.
Investment and Deduction Proofs: For entities claiming deductions under sections like 80C (investment in PPF, LIC, etc.), 80G (donations to charity), and 80-IA (deductions for infrastructure development), relevant proof and certificates need to be provided.
Partnership Details: If the entity is a partnership firm, details of the partnership, including the partnership deed, and each partner’s share in the profit or loss, need to be provided.
How to File ITR-5
ITR-5 must be filed online through the Income Tax e-Filing Portal. Here is a step-by-step process for filing:
Register/Login to the Income Tax Portal:
If the entity is not already registered, create an account on the Income Tax Department’s portal using the entity’s PAN.
Select ITR-5 Form:
On the e-filing portal, select ITR-5 from the list of available ITR forms.
Fill in the Form:
Enter the necessary details like income, deductions, exemptions, and any other relevant information in the respective sections.
Upload Documents:
Upload the required supporting documents like financial statements, audit reports, TDS certificates, and proofs for deductions and exemptions.
Submit the Form: After reviewing the form for accuracy, submit it online through the portal.
E-Verification: The form must be verified using one of the available methods like Aadhaar OTP, Digital Signature, or Electronic Verification Code (EVC).
Acknowledgment: Once the return is filed and verified, you will receive an acknowledgment (ITR-V), which should be saved for future reference.
Due Date for Filing ITR-5
The due date for filing ITR-5 is generally 31st July of the assessment year for most entities.
However, if the entity is subject to tax audit under Section 44AB, the due date may be extended to 30th September.
Note: The Income Tax Department may extend the filing deadlines, especially in exceptional circumstances.
Penalties for Non-Compliance
Late Filing Fees: Under Section 234F, a penalty of up to ₹5,000 may be levied for late filing of the return.
Interest: If any tax remains unpaid after the due date, interest under Section 234A, 234B, or 234C will be charged.
Denial of Deductions: If the return is not filed properly, certain deductions and exemptions may be denied.
Conclusion
ITR-5 is a critical tax return form for business entities such as partnership firms, LLPs, AOPs, BOIs, and others that are required to file income tax returns. It ensures that entities report their income, claim deductions, and comply with tax laws. Proper filing of ITR-5 helps avoid penalties and ensures the entity fulfills its tax obligations.
