The ITR-7 form plays a pivotal role, specifically designed for entities such as trusts, associations of persons (AOP), bodies of individuals (BOI), and other entities that are not eligible for presumptive taxation.
One such form is ITR 7 for taxpayers falling under specific categories, such as trusts, associations, and charitable institutions; the ITR 7 form is the designated document for filing returns.
What is ITR 7?
ITR 7 is an income tax return form prescribed by India’s Income Tax Department. It is specifically designed for individuals and entities that are required to file their tax returns under section 139(4A), section 139(4B), section 139(4C), or section 139(4D) of the Income Tax Act, 1961. These sections pertain to certain categories of taxpayers, including trusts, political parties, charitable or religious institutions, research associations, and news agencies.
Eligibility to File ITR 7 Form
ITR 7 caters to the diverse needs of taxpayers, but you must understand if you are eligible for the same. The eligibility criteria for filing the ITR 7 form and its key information are as follows:
- Every person who receives income from assets held under a trust or other legal obligation primarily or exclusively utilized for charitable or religious purposes must submit a return under section 139(4A).
- A political party must file a return under section 139(4B) if its total revenue exceeds the amount that is exempt from income taxation after applying section 139A’s requirements.
- Every scientific research association, news organization, association, or institution mentioned in section 10(23A), institution mentioned in section 10(23B), fund or institution, university or other educational institution, or any hospital must file a return under section 139(4C).
- Every university, college, or other institution that is not obliged to provide a report of revenue or loss under any other provision of this section is required to make a return under section 139(4D).
- Every business trust that is not required to provide a report of income or loss under another provision of this section is required to make a return under section 139(4E).
- Any investment fund mentioned in section 115UB is required to submit a return in accordance with section 139(4F). Under any other requirements of this section, it is not necessary to provide a return of income or loss.
Documents to be Attached with Form ITR 7
ITR 7 is an annexure-less form. It is not necessary to attach any document with this return. However, taxpayers should tally their tax details with their tax credit statement Form 26AS before filing their ITR.
What is the Structure of ITR Form 7?
This form is sectioned into four key parts:
1. Part A
2. Schedules
3. Part B
4. Verification
Part A – General information
It is the first part of the form, furnishing the taxpayer’s details such as:
- Name (as written in the deed of creation/ establishing/ incorporation/ formation)
- PAN Address
- Date of formation/ incorporation official contact number (with STD code for landline)
- Email Address
- Information about projects or institutions the assessee runs
- Details of registration or approval under the Income Tax Act and other laws
The subsequent subsections include:
- Filing Status
Some of the details of this subsection include:
- Return filed on, before, or after the due date
- Whether it is a revised or modified return
- Date of filing of original return if the return is revised or modified
- If submitted in response to a notice
- Section under which the return is furnished
- Section under which the taxpayer is claiming exemptions
- Taxpayer’s residential status
- Declaration about unlisted equity shares
- Audit information
Whether an audit is required
- Audit liability under an act other than the Income Tax Act
- The auditor’s name
- Audit report date
- The date of furnishing the audit report
- Other details
- Information about unlisted share investments, Section 80G approval status, and so on are entered under various fields.
Schedules in the ITR Form 7
ITR 7 contains 23 schedules. The table below lists some of the principal schedules in the form.
Schedule
|
Purpose
|
Schedule-I
|
For taxpayers covered under Section 11(2) and 10(23C)
|
Schedule-J
|
For assessees under Section 12A and 12AA or specific subsections of 10 (23C)
|
Schedule-LA
|
This applies to political parties
|
Schedule-ET
|
Relevant for Electoral trust
|
Schedule-AI
|
For entities claiming exemption under Sections 11, 12 or various subsections of 10(23C)
|
Schedule-J
|
For investments of the funds of the trust/ institution as on the previous fiscal’s last day
|
Schedule-VC (Compulsory)
|
For voluntary contributions received
|
Schedule-K
|
For details of founders, trustees, managers, or authors of the trust or institution
|
Schedule-ER
|
For revenue expenditures
|
Schedule-EC
|
For expenses towards charitable or religious purposes
|
Schedule-HP
|
For income from house property
|
Schedule-CG
|
For Short- and long-term capital gains
|
Schedule-SH
|
For unlisted shareholdings
|
Schedule-OS
|
For income under the head “Other Sources”
|
Schedule-OA
|
Lists information about business and profession
|
Schedule-BP
|
For gains from business or profession
|
Schedule-CYLA
|
To state income after set-off of losses
|
Part B
Part B of ITR 7 is divided into three major sections:
TI - This subsection acts as a statement of income containing the details of:
- Gross income for the applicable financial year, including losses set off
- Deductions claimed
- Applicable exemptions
- Total taxable income
TTI - This subsection reflects the tax computation. Details include:
- Tax payable on total income
- Surcharge
- Cess
- Tax relief applied
- Penal interest is owed if any taxes paid
- Taxes due
- Refunds due, if any
Tax details - This section contains information about the total tax paid for the fiscal through TDS, TCS, GST, advance tax, and self-assessment tax.
ITR V – Return Verification Form
It is a one-page document certifying the accuracy of the details provided in the ITR.
How to Fill out the ITR 7 Form?
As per the Income Tax Act, it is necessary to maintain the following flow while filing the returns online:
- Part A All schedules
- Part B Verification
- Guidelines for filing ITR 7
Taxpayers have to write ‘NA’ against schedules and particulars that are not relevant to them.
Zero-value figures are to be denoted as ‘Nil’. Negative values must include the minus (-) sign before the figure showing the value.
All amounts must be entered as the nearest multiple of ten. Non-resident Indians required to file ITR 7 can provide details of bank accounts in a foreign country to receive tax refunds.
It is compulsory to file the ITR 7 Form online on the Income Tax Department’s website. The options include:
- Transmitting the data and verifying the returns electronically
- Submitting the return details digitally, followed by downloading the return verification form ITR-V
- For the second option, the person filing the return must print out a hard copy of the ITR V Form and send it to the Centralised Processing Center (CPC) Office.
Important Things to Consider
To ensure a seamless filing process, here are some crucial things to remember when filling the ITR 7 form.
Filing Deadline
The deadline for submitting ITR 7 usually falls on July 31 of the assessment year.
Compulsory E-Filing
Trusts and entities filing ITR 7 must use the electronic filing (e-filing) method.
Audit Report Requirement
A mandatory audit report under Section 44AB is necessary if the total income surpasses the specified limit.
Verification Process
The designated person authorized to verify the form, often the managing trustee or principal officer, must complete the verification process.
Who Must File the ITR 7 Form?
Taxpayers, persons or companies who are claiming exemptions under the following categories are liable to file Form ITR 7:
Under Section 139(4A)
Taxpayers earning from properties held entirely or partially under a legal obligation or as a trust for a charitable or a religious purpose have to file their returns with the ITR 7 Form.
Under Section 139 (4B)
Political parties claiming tax exemption under Section 13A must file annual returns using the ITR 7 Form. Also, if the earnings from a political party exceed the 13A exemption limits, the ITR 7 Form needs to be filed.
Under Section 139(4C)
As per this section, filing Form ITR 7 is compulsory for the following entities:
- Scientific research institutes
- Association or institution mentioned in Section 10(23A)
- News agencies
- Government or non-government institutions listed under section 10(23B)
- Funds/institution / University / educational institution/hospitals, clinics and other medical establishments
Under Section 139(4D)
The rules of this section mandate institutions, colleges and universities not covered under any other section, Khadi and village industries, to file ITR 7.
Under Section 139 (4E)
Business trusts not required to furnish income returns under any other provisions of this section must file ITR 7 under this section.
Under Section 139(4F)
Investment funds referred to in Section 115UB are required to furnish returns using ITR Form 7 under this section.
How to e-verify ITR 7?
This verification process is called e-verification because it is done electronically. In the case of political parties, the CEO or the secretary must verify the return through a digital signature certificate (DSC). Other taxpayers can choose the following options to e-verify the return:
- Signing with DSC
- Authenticating through EVC or Aadhaar OTP
How to e-file Audit Reports?
Assesses liable for audits under Section 44AB must provide the details of audits on their accounts by an accountant to the tax authorities. Such audit information and the report submission date to the tax department must be filed under the subsection “Audit Information” in the ITR 7 Form.
How to Send the ITR V to the CPC Office?
After furnishing the returns electronically and ITR 7 form downloading the soft copy of the ITR-V from the Income Tax Department’s website, a password is required to open it. The printed copy has to be signed in blue ink. Within 120 days of e-filing the tax return, taxpayers must send the ITR V via ordinary post or speed post to the following address:
Post Bag No. 1, Electronic City Office, Bengaluru–560100 (Karnataka)
The form cannot be couriered. It is advisable to take a second printout of the verification form and retain it as a record of taxes paid and returns filed.
Conclusion
Companies with social engagements, such as news agencies, charitable trusts, religious bodies, educational or scientific research institutions, and the like, need to file Form ITR 7. Such organizations must provide their income and tax payment details in this form. However, the different schedules and sections in the form might appear confusing.
This comprehensive guide is designed to explain the various sections in the ITR 7 Form with instructions for filling it correctly. It will help avoid mistakes and simplify the process of filing the return of income.
Key takeaways
- The Income Tax Department of India has designed various ITR forms to cater to the diverse needs of taxpayers.
- Every individual receiving income from property held under a trust or other legal obligation that is used entirely or mostly for charity must file a return under section 139(4A).
- A political party must file a return under section 139(4B) if its total revenue exceeds the amount that is exempt from income taxation after applying section 139A’s requirements.
- The document must be duly signed before furnishing the return.
