A Comprehensive Guide to Understand the ITR 7 Form

Updated on: 24 July 2023

The ITR 7 Form is mandatory for organizations earning from properties designated for charitable or religious purposes or held under trusts.

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 return under section 139(4B) must be filed by a political party if its total revenue exceeds the amount that is exempt from income taxation after applying section 139A’s requirements.
• ITR 7 contains 23 schedules.
• The document must be duly signed before furnishing the return.

Firms, companies, local authorities, the Association of Persons (AOP), and Artificial Judiciaries claiming exemptions under section 139 need to file their return form. ​

What is ITR-7?

ITR-7 is an income tax return form prescribed by the Income Tax Department of India. 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 are you eligible? Read ahead to understand the eligibility criteria for filing the ITR-7 form and the key information related to it

• Every person who receives income from assets held under a trust or other legal obligation that is primarily or exclusively utilized for charitable or religious purposes is required to submit a return under section 139(4A).
• A return under section 139(4B) must be filed by a political party 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.
  

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:

1.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

2.Schedules in the ITR Form 7

ITR 7 contains 23 schedules. The table below lists some of the principal schedules in the form.

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
• CessTax 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 the ITR-7 Form?

As per the income tax act, it is necessary to maintain the following sequence 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 CPC Office.

How to Fill Out the Verification Form ITR V for ITR 7?

A taxpayer filling out the verification document has to strike out the fields that are not applicable or write NA against those entries. It is crucial to ensure that the document is duly signed before furnishing the return. It is also necessary to state the designation or capacity and PAN of the person verifying the return.

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 ITR 7 Form.

Under Section 139 (4B)

Political parties claiming tax exemption under Section 13A must file annual returns using ITR 7 Form. Also, if the earnings from a political party exceed the 13A exemption limits, 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 Send the ITR V to the CPC Office?

After furnishing the returns electronically and downloading the ITR-V soft copy 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.

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.

How to e-File Audit Reports?

Assessees 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, along with the date of submitting the report to the tax department, must be filed under the subsection named “Audit Information” in the ITR 7 Form.

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 have to provide their income and tax payment details in this form. However, the different schedules and sections in the form might appear confusing. But furnishing false or incorrect information can lead to prosecution under section 277 of the Income Tax Act, 1961, leading to imprisonment and fines. Hence, it is essential to understand the features of the ITR Form properly and enter accurate data.

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.

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