What is the ITR 5 Form and How to File ITR 5?

The ITR 5 form is designed for firms, BOIs, LLPs, AJP, AOPs, the estate of insolvent or deceased, investment funds, business trusts, local authorities, and co-operative societies.

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Filing Income Tax Returns (ITR) can be a difficult task, especially when faced with various forms and their specific requirements. The Income Tax Department of India has introduced different forms to streamline the process, making it easier and more convenient for taxpayers to file their returns accurately.

Among these, the ITR 5 form is designed for a specific class of taxpayers, including firms, Bodies of Individuals (BOIs), Limited Liability Partnerships (LLPs), and several other entities. Knowing which form applies to your source of income is crucial for ensuring compliance and avoiding penalties.

What is ITR 5 Form?

The ITR Form 5 is a form suitable for bodies such as firms, Body of Individuals (BOIs), Limited Liability Partnerships (LLPs), Artificial Juridical Persons (AJP), Associations of Persons (AOPs), the estate of insolvent, the estate of deceased, investment fund, business trust, local authority, and co-operative society for filing the ITR. Any individual or entity belonging to the aforementioned categories is eligible for ITR 5 filing.

Key Changes in the ITR 5 Form in AY 2024-25

The Income Tax Department has updated the ITR 5 Form for AY 2024-25 to enhance clarity and incorporate recent legislative changes. Below is an easy-to-follow overview of the major updates:

Existing Updates:

Legal Entity Identifier (LEI): Mandatory disclosure if applicable
Audit Report Details: Acknowledgement number and UDIN are required for audited cases
Cash Receipts: Disclosure to claim the enhanced turnover limit
Delayed MSME Payments: Details of payments delayed beyond the prescribed limit
Political Contributions: Contributions to political parties must be declared under Schedule 80GGC

New Updates:

Introduction to Schedule OS Update
Income from other sources now requires more detailed reporting
Declaration of Bonus Payments under LIC Policies
Specific section added to report bonus payments under life insurance policies
Addition of Dividends from IFSC Units
Dividends received from International Financial Services Centre (IFSC) units must be reported separately

Section 80-IAC Deductions for Startups:

Eligible startups can now claim deductions under this section with relevant details

MSME Registration Details:

Information on MSME registration must be disclosed for entities falling under this category
These changes aim to improve compliance and transparency while providing clearer guidelines for taxpayers

Who is Eligible to File the ITR 5 Form?

If you are wondering what is ITR 5 and whether it applies to you, let's dive into the details. It means a specific income tax return form designed for entities other than individuals. This includes firms, Limited Liability Partnerships (LLPs), Association of Persons (AOPs), Body of Individuals (BOIs), and even Artificial Judicial Persons. Additionally, businesses under the Hindu Undivided Family (HUF) structure may also fall under its purview.

The ITR 5 form is integral for reporting income, especially for entities that don't qualify to use other forms like ITR 6 or ITR 7. It is also essential for entities claiming deductions under the Income Tax Act of 1961 to ensure compliance with tax regulations.

For those with income subject to TDS or discrepancies in Form 26AS, the filing process ensures proper reconciliation of taxes paid and payable. It is especially relevant if your income sources include profits from business or professional services.

With advancements in technology, ITR 5 online filing has made the process smoother and more accessible. Now, you should know how to file ITR 5. It involves uploading necessary documents, verifying tax details, and filling out financial data. For guidance on filing income tax returns under ITR 5, it’s crucial to keep accurate records and stay updated with the latest rules.

ITR 5 income tax filing ensures entities maintain legal compliance while streamlining their tax reporting. As a result, understanding the eligibility criteria is the first step towards seamless tax management.

How to File ITR 5 Form?

ITR can be filed using ITR 5 online and offline. Here are the important steps for filing Form 5:

Filing ITR 5 Form Online

Visit the Income Tax Department’s official e-filing portal
Electronically transfer the data in the return form
Include your digital signature for electronic verification
Print two copies of the ITR-V Form if you cannot verify it electronically
Sign and send one copy to Post Bag No. 1, Electronic City Office, Bengaluru–560500 (Karnataka) for verification
Retain another copy for your ITR record

Filing ITR Form 5 Offline

Submit the bar-coded return
Submit a physical paper form against an acknowledgment issued by the Income Tax Department

No Documents/ Annexure Required

When it comes to filing ITR 5, one of the most convenient aspects is that no physical documents or annexures are required. Simply put, ITR 5 means the income tax return form used by firms, Hindu Undivided Families (HUFs), Limited Liability Partnerships (LLPs), and other entities specified under the Income Tax Act, 1961.

For ITR 5 filing, everything is streamlined. While you are not required to attach documents, it is essential to have all the necessary details on hand, such as TDS data and your Form 26AS. This ensures the process is accurate and efficient.

If you are navigating ITR 5 online filing, be sure to check guidelines on how to file and keep your income tax returns well-organized. This hassle-free method of filing eliminates unnecessary paperwork!

Due Date for Filing ITR 5 Form

For AY 2024-25, the due dates for filing the ITR 5 form are as follows:

Category	Due Date
Non-Audit Cases	31st July 2024
Audit Cases	31st October 2024

Structure of the ITR 5 Form

The ITR 5 form is systematically divided into two main sections and several detailed schedules to ensure accurate reporting and compliance with tax regulations. This structured approach ensures comprehensive reporting and accurate tax computation. Here's a breakdown of its key components:

Part A: General Information

This section captures the taxpayer's basic details, including identity and operational specifics like business type, PAN, and contact details. It lays the foundation for the form by collecting essential data.

Part A-BS: Balance Sheet

The Balance Sheet is a snapshot of the taxpayer's financial position as of 31st March 2024. It includes details about assets, liabilities, and equity, offering a comprehensive overview of the business's fiscal health.

Part A-Manufacturing Account

This section details the manufacturing costs incurred during the financial year 2023-24. It includes input costs, production overheads, and related expenditures.

Part A-Trading Account

The trading account records income and expenses related to trading activities for the financial year 2023-24. It summarises revenue from sales and the cost of goods sold.

Part A and L: Profit and Loss Account

This section provides a detailed analysis of the profits or losses during the financial year, listing income and expenses across various heads.

Part A-OI: Other information

Other financial details that do not fit standard accounting entries are recorded here, such as tax adjustments or specific reconciliations.

Part A-QD: Quantitative details

This section captures quantitative data related to stock, production, and turnover, offering clarity on business operations.

Part B

This is the computation section, which uses the information provided in Part A and the schedules to calculate the total income and tax liability.

Schedules

The ITR 5 includes numerous schedules to elaborate on specific aspects of income, deductions, and tax credits. These help in aligning financial details with tax provisions.

Part B – TI: Computation of Total Income

Here, the total income is calculated after considering all eligible deductions and exemptions.

Part B – TTI: Computation of Tax Liability on Total Income

This section determines the tax payable or refundable after applying applicable rates and credits.

Tax Payments

Details of advance tax, self-assessment tax, and TDS/TCS payments are captured in this section for reconciliation with tax liabilities.

Who Cannot File the ITR 5 Form?

Now that you know how to file it, there are some individuals who are not eligible for filing this form. Here is the list:

Individual assesses
Hindu Undivided Family (HUF)
Company
Taxpayers who must file tax returns in Form ITR 7, under Sections 139(4A), 139(4B), 139(4C), 139(4D), 139(4E) or 139(4F).

You can easily file your form online in a hassle-free manner. Make sure that the return is filed before the last day to avoid any penalty.

How to Fill Out the Verification Document?

You must input all necessary details to fill out the verification document for Form 5. For the next step, check if the data furnished is correct, such as:

Name
Address
Contact details
PAN
Filing status
Audit information
Income details
Debts
Tax liability
Taxes paid

Make sure the document is duly signed or attested. State the designation/ capacity of the person signing/ verifying the return.

Wrapping Up

Exploring Income Tax Return filing in India can seem overwhelming, but understanding the specific requirements of forms like the ITR 5 can simplify the process significantly. By knowing who is eligible, being aware of recent changes, and following the correct filing procedures, taxpayers can ensure they meet their tax obligations efficiently. Timely and accurate filing of the ITR 5 not only helps in complying with legal requirements but also aids in avoiding penalties and fostering financial discipline. As you prepare for your ITR filing, keep this guide handy to understand the process and ensure a smooth and hassle-free experience.

FAQs on ITR 5 Form

Is it mandatory to include the balance sheet for ITR 5 filing?

Including the balance sheet in ITR 5 depends on your situation. It is mandatory if your accounts are audited or you claim a business loss.

Is it mandatory to e-file the ITR 5 Form?

ITR 5 is an income tax return form used by businesses like firms, LLPs, and trusts to report their income.

How can I file ITR 5 online?

You can’t directly upload the ITR 5 form online. You need to download it, fill it out, and mail it to the Income Tax Department.

Is ITR 5 an annexure-free form?

Yes, ITR 5 itself does not require any additional documents (annexures) to be attached. However, you might need to submit supporting documents based on your tax situation.

What if my accounts need to be audited, and I miss the due date for filing ITR 5?

If your accounts require auditing and you miss the filing deadline, you may face penalties under Section 234F of the Income Tax Act. Additionally, you could lose eligibility to carry forward certain losses for future years. It's essential to ensure timely filing or request an extension, if applicable.

What is the penalty for late filing of the ITR 5 form?

A delay in filing the ITR 5 form can attract a penalty of up to ₹5,000 under Section 234F. If the total income does not exceed ₹5,00,000, the penalty is reduced to ₹1,000. Filing beyond the deadline also incurs interest on any outstanding tax liabilities.

Who is eligible to file the ITR 5 Form?

The form is specifically designed for entities such as partnership firms, Limited Liability Partnerships (LLPs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), cooperative societies, and local authorities. Individuals, HUFs, and companies cannot use this form.

What types of entities are included in the ITR 5 category?

Entities like partnership firms, LLPs, cooperative societies, trusts, AOPs, BOIs, artificial juridical persons, and local authorities fall under the ITR 5 category. It also applies to any entities not required to file other ITR forms.

Can the ITR 5 form be revised after filing?

Yes, the form can be revised under Section 139(5) of the Income Tax Act if any errors or omissions are identified after submission. The revision must be filed before the end of the assessment year or before the completion of the assessment, whichever is earlier.

Are there any income tax deductions specifically available for entities using the ITR 5 form?

Entities filing this form can claim deductions under various sections, including 80C to 80U, depending on the type of entity and income. For instance, donations under Section 80G or expenses for scientific research under Section 35 may be deductible. It is important to evaluate specific eligibility criteria based on the entity's operations.