How to File ITR-5?

The Income Tax Return Form 5 (ITR-5) is specifically designed for entities like firms, Limited Liability Partnerships (LLPs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), estates of deceased individuals, business trusts, and investment funds. Eligible entities must use this form to report their income, deductions, and tax liabilities for a financial year. However, it cannot be filed by individuals, Hindu Undivided Families (HUFs), companies, or those claiming exemptions under ITR-7. Filing ITR-5 requires essential documents like the PAN, TAN, audited financial statements, Form 26AS, and other income-related proofs. The form is structured into multiple sections, covering general information, income details, tax computation, and schedules for specific disclosures. Filing ITR-5 online via the Income Tax Portal involves steps like registering, logging in, filling out the form and verifying the return. This guide covers everything you need to simplify the process and ensure compliance with income tax law.

What is ITR-5?

ITR-5 is a specific tax return form under the Indian Income Tax Act. It is designed for entities like firms, Limited Liability Partnerships (LLPs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), business trusts, and investment funds, allowing them to declare their income, claim deductions, and compute tax liabilities for a financial year. This form is structured into various schedules and sections to capture detailed financial and tax-related information, ensuring accurate tax compliance for the filing entities.

Who is Eligible to File ITR-5?

The ITR-5 form is meant for entities other than individuals, Hindu Undivided Families (HUFs), and companies. Eligible entities include:

  1. Partnership firm – Registered partnerships operating businesses or professions.
  2. Limited Liability Partnerships (LLPs) – Organizations formed under the LLP Act, 2008.
  3. Associations of Persons (AOPs) and Bodies of Individuals (BOIs) – Groups or associations of individuals formed for specific purposes.
  4. Artificial Juridical Persons – Entities such as trusts or institutions that are not classified as companies.
  5. Business Trusts and Investment Funds – Trusts engaged in infrastructure or real estate investment and funds under SEBI regulations.
  6. Estates of Deceased or Insolvent Individuals – Estates responsible for managing income or liabilities after the individual’s death or insolvency.

Who Cannot File ITR-5?

Certain entities are specifically excluded from using the ITR-5 form and must file their tax returns using other prescribed forms. These include:

  1. Individuals and HUFs – Individuals and Hindu Undivided Families must file using forms like ITR-1, ITR-2, ITR-3 or ITR-4 based on their income sources.
  2. Companies – Companies incorporated under the Companies Act are required to file ITR-6 or ITR-7, depending on their nature and exemptions.
  3. Tax-Exempt Entities – Entities claiming exemptions under sections like 11 and 12 (charitable or religious purposes) must use ITR-7.

What are the Documents Needed to File ITR-5?

To ensure accurate filing of ITR-5, entities need to gather specific documents and information beforehand. These documents help in reporting income, claiming deductions, and ensuring compliance. Below is a list of essential documents:

  1. PAN (Permanent Account Number)
  2. Audited Financial Statements – Includes the balance sheet, profit and loss statement, and other financial reports (mandatory if the entity falls under income tax audit requirements).
  3. Form 26AS – A consolidated tax statement that provides details of tax deducted, collected, and paid to the government.
  4. Bank Account Statements – Statements from all operational accounts to verify income, expenses, and transactions.
  5. Details of Partner Contributions – For firms and LLPs, details of capital contributions by partners or members.
  6. Income and Expense Records – Documentation of all sources of income and expenses during the financial year.
  7. Tax Payment Receipts – Proof of advance tax payments, self-assessment tax, and any other tax paid.
  8. Investment and Deduction Proofs – Details of eligible deductions under Chapter VI-A, such as donations, employee welfare contributions, etc.
  9. GST Returns – For entities registered under GST, GST filings may be required to reconcile turnover or income data.

What is the Structure of the ITR-5 Form?

The ITR-5 form is divided into multiple sections and schedules, each designed to capture specific details about the entity’s financial and tax information. Below is a breakdown of its structure:

  1. Part A – General Information

    • Basic details such as PAN, name, address, status, and contact information of the entity (auto populated).
    • Details of registration, nature of business, and type of entity (e.g., LLP, AOP).
  2. Part A – Trading and Profit & Loss Account

    Information about the income earned and expenditure incurred during the financial year.
  3. Part A – Balance Sheet

    Details of assets, liabilities, and equity for the reporting period.
  4. Part A – Manufacturing Account (if applicable)

    Applicable for manufacturing firms, covering raw materials, production costs, and inventories.
  5. Schedules

    • Schedule BP (Business and Profession) Profit computation from business or profession.
    • Schedule HP (House Property) – Income earned from rented or owned properties.
    • Schedule CG (Capital Gains) – Details of short-term and long-term capital gains or losses.
    • Schedule OS (Other Sources) – Income from interest, dividends, etc.
    • Schedule VI-A – Deductions claimed under various sections of Chapter VI-A.
    • Schedule TDS and TCS – Details of tax deducted and collected at source.
    • Other schedules covering depreciation, partner information, and tax credits.
  6. Part B – Total Income and Tax Computation

    Aggregates all sources of income, deductions, and tax computations, arriving at the taxable income and tax liability.
  7. Verification

    Declaration by the authorized signatory certifying the correctness of the information provided.

How to File ITR-5 Online?

Filing ITR-5 online is a straightforward process when done through the Income Tax Portal. Here is a step-by-step guide to help you file your return efficiently:

1. Register/Login on the Income Tax Portal

  • Visit the official Income Tax e-filing portal 
  • If you are a first-time user, register your entity by providing the PAN, contact details, and other required information.
  • Existing users can log in using their credentials (PAN and password).

2. Navigate to the ITR Filing Section

  • Once logged in, click on “e-File” in the dashboard.
  • Select “Income Tax Return” from the dropdown menu.
  • Choose the Assessment Year and the mode of filing (online or offline).

3. Select the ITR Form

  • Choose ITR-5 as the applicable form.
  • Ensure the selected filing type is appropriate (original or revised return).
  • Provide the relevant details for the entity such as nature of business, and status.

4. Fill in the Required Details

  • Enter the general information about the entity under Part A.
  • Complete the sections for income, deductions, tax computation, and schedules.
  • Key schedules include:
  • Use the pre-filled data available (e.g., Form 26AS, AIS) and cross-verify it with your documents.

5. Validate the Form

  • After filling out all the sections, click on the “Validate” button to ensure there are no errors.
  • Fix any discrepancies or missing information flagged during validation.

6. Preview and Submit the Return

  • Review all the entered details thoroughly.
  • Once satisfied, click on “Proceed to Submit.”

7. Verify the Return

  • Post submission, you need to verify your return. Choose any of the following modes for e-verification:
    • Aadhaar OTP.
    • EVC (Electronic Verification Code) via bank account or net banking.
    • Digital Signature Certificate (DSC) for authorized signatories.
  • If e-verification is not done, download and physically sign the ITR-V (Acknowledgment) and send it to the Centralized Processing Center (CPC) in Bengaluru within 30 days.

9. Acknowledgment of Filing

  • Once the verification is complete, an acknowledgment receipt will be generated.
  • Save and download this receipt for your records.

How to File ITR-4 Online on the Income Tax Portal?

Filing ITR-4 online on the Income Tax Portal is a straightforward process that can be completed in a few simple steps. Here’s a detailed guide to help you:

Step 1: Log in to the Income Tax Portal

  1. Visit the official Income Tax e-Filing portal
  2. Log in using your PAN as the User ID and your password.

Step 2: Go to the ITR Filing Section

  1. Once logged in, click on the “e-File” menu.
  2. Select “Income Tax Return” from the dropdown options.

Step 3: Select the Assessment Year and ITR Form

  1. Choose the relevant Assessment Year for which you want to file the return.
  2. Select ITR-4 (Sugam) from the list of available forms.
  3. Choose the filing type as “Online” and click “Proceed”.

Step 4: Fill in the ITR-4 Form

The ITR-4 form is divided into several sections. Fill in the required details as follows:

  1. General Information: Verify your personal details like name, PAN, Aadhaar, and contact details (auto-populated).
  2. Income Details:
  3. Tax Paid Details: Include details of advance tax, self-assessment tax, and TDS (as reflected in Form 26AS or AIS).
  4. Deductions: Enter eligible deductions under Chapter VI-A, such as Sections 80C, 80D, 80E, etc.
  5. Bank Details: Provide details of all active bank accounts, including the account for refund purposes.

Step 5: Validate and Preview the Form

  1. After filling in all sections, click on the “Validate” button to ensure there are no errors or missing information.
  2. Preview the form to verify all entered details are accurate.

Step 6: e-Verify the Return

  1. Choose an e-verification method:
    • Aadhaar OTP: A one-time password sent to the Aadhaar-linked mobile number.
    • Net Banking: Log in through your bank’s net banking portal for verification.
    • Electronic Verification Code (EVC): Generated through your bank account or pre-validated bank/Demat account.
    • Digital Signature Certificate (DSC): Required for certain taxpayers, such as companies or tax audits.
  2. Complete the verification process.

Step 7: Submit the ITR-4 Form

  1. After verification, click “Submit” to file the return successfully.
  2. A confirmation message will appear on the screen, and an Acknowledgment Number will be generated.

Step 8: Download the ITR-V Acknowledgment

If you did not e-verify during submission, download the ITR-V acknowledgment, sign it, and send it to the Centralized Processing Centre (CPC), Bengaluru via post within 30 days.

By following these steps, you can easily file your ITR-4 online without errors. Always cross-check your details with Form 26AS, AIS, and supporting documents to ensure accuracy and avoid notices from the tax department.

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