A Comprehensive Guide to Understand the ITR 7 Form

When it comes to filing taxes in India, the process can seem like navigating a maze, especially with all the different forms and rules. One such form that might not be on everyone’s radar but is crucial for specific organizations is the ITR 7 Form. If you’re involved with trusts, political parties, or charitable institutions, understanding this form is essential.

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 and understanding what is 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 139 A’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

To understand what is ITR 7, you need to know that it 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

According to the income tax department ITR-7 form has been divided into Part A, Part B and Schedules.

Part-A – General information

Part-B – Statement of the total income and tax computation with respect to income chargeable to tax.

Schedule-I: Details of amounts accumulated/ set apart within the meaning of section 11(2) or in terms of the third provision to section 10(23C)/10(21) read with section 35(1) in the last 7 financial years viz., previous years relevant to the current AY.

Schedule-D: Details of deemed application of income under clause (2) of Explanation 1 to sub-section (1) of section 11.

Schedule-J: Statement showing the investment of all funds of the Trust or Institution as on the last day of the previous year. Part A-BS: Details of Application and Sources of Fund as on 31st March 2023

Schedule-LA: Details in case of a political party.

Schedule-ET: Details in case of an Electoral Trust

Schedule-VC: Details of Voluntary Contributions received.

Schedule AI: Aggregate of income derived during the year excluding voluntary contributions

Schedule ER: Amount applied to charitable or religious purposes in India – Revenue account

Schedule EC: Amount applied to charitable or religious purposes in India – Capital account

Schedule IE-1, IE-2, IE-3 and IE-4: Income and expenditure statements as applicable

Schedule-HP: Computation of income under the head Income from House Property.

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

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 a hard copy of the ITR V Form and send it to the Centralised Processing Center (CPC) Office.

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 out the ITR 7 meaning 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.

What are the Different Ways to File ITR-7 Form?

There are different ways to file an ITR. Some of the methods for the same are mentioned below-

E-Filing

We can submit the ITR-7 form online by logging into the Income Tax Department’s e-filing website. We will need to register or log in, complete the form, and send it electronically. The site will help us get through the process.

Using Software or Tax Preparation Resources

A variety of third-party tax preparation software and online resources are available to assist with ITR-7 filing. These tools frequently provide guidance and help us comply with tax requirements.

Offline Filing

If we choose to file physically, we can download the ITR-7 form from the Income Tax Department’s website, fill it out on paper, and deliver it to the appropriate Income Tax Office. However, offline filing is generally less common for ITR-7 as online filing is more convenient and widely preferred.

Through a Tax Professional

We can employ a tax professional to prepare and file the ITR-7 for us. They will manage the paperwork and ensure that all information is correct and in compliance with tax requirements.

Using Electronic Filing Service Providers

Several authorized e-filing service providers offer assistance in filling out the ITR-7 form. They may charge a fee but can provide additional assistance and support.

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 VII to the CPC Office?

After furnishing the returns electronically and ITR 7 from 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

Format of ITR Form-7

The ITR-7 form is structured to accommodate the unique requirements of entities. The format generally includes the following sections:

Key Points

• Name and Address: Personal information about the taxpayer, including name, address and contact information.
• PAN (Permanent Account Number): Must be indicated.
• Valuation Year: The year in which income is reported.
• Type of Corporation: Information about whether the taxpayer is a corporation, trust, or other entity.

Income Statement

• Property Income: statement of income from household property.
• Income from business or employment: For companies engaged in business or professional activities.
• Other sources of income: An overview of other types of income.
• Exemptions: Report any income exempt from taxes.

Deductions

• Deductions under various sections: Details of deductions required under sections 80C, 80D and so on.
• Money used or raised for charitable or religious purposes: for charitable trusts or foundations.

Payment of Taxes

• Calculating taxable income to process taxable income deductions.
• Tax calculation: Tax calculation based on taxable income.
• Tax Paid: Details of tax already paid or TDS (Tax Deducted at Source).

Research Conducted

• Declaration: A statement confirming the accuracy of the information provided.
• Signature: The form must be signed by an authorized person (such as a form trustee, managing director, or CEO).

Other Arrangements

• Schedule AI: Income statement under chapters
• Schedule B: For reporting operating income
• Schedule C: For information on charitable or religious funds
• Schedule D: For other sources of income and related deduction information
• Schedule F: Statement of assets and liabilities
• Schedule G: Information relating to income used or accumulated for charitable purposes
• Schedule J: Fundraising Report

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.

FAQs on ITR 7