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

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 the ITR 5 Form, and Who is Eligible for it?

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.

Notable changes in the ITR-5 Form in AY 2024-25

The Income Tax Department has introduced some refinements to the ITR-5 Form for Assessment Year (AY) 2024-25 to improve transparency and align with recent legislative changes. Here are the key updates:

Additional information requirements for the ITR-5 Form as per the Income Tax Department:

• Legal Entity Identifier (LEI) details (if applicable)
• Acknowledgement number for the Audit Report and Unique Document Identification Number (UDIN) (for audited cases)
• Disclosures related to cash receipts (to claim the enhanced turnover limit)
• Details about delayed payments to MSMEs (Micro, Small and Medium Enterprises) beyond the prescribed time limit
• Information on contributions made to political parties under Schedule 80GGC

The structure of ITR Form 5

The ITR 5 Form is divided into Part A and Part B. In Part A, you need to provide details, which include general information, balance sheet details on the last day of the financial year, manufacturing account details for the financial year, trading account details for the financial year, profit and loss account information for the financial year, and other information. In Part B, you are required to furnish details of the computation of your total income and the calculation of tax liability on your total earnings.

Apart from the aforementioned information, the ITR 5 Form also details important aspects of the business. Some key schedules include:

• Schedule HP – Information about any earnings from house property
• Schedule CG – Details about any capital gains
• Schedule BP – Information regarding the calculation of income from business
• Schedule DCG – Details about any capital gains earned by selling a depreciable asset
• Schedule DOA – Information about the depreciation of assets
• Schedule DPM – Details about the depreciation of machinery and/or plant

How can you File ITR Form 5?

You can file an ITR 5 form online on the Income Tax Department’s website in two ways. The first is to furnish the return electronically using your digital signature. The second is to transmit the data and then submit the return verification using the ITR 5 form.

Once the ITR 5 filing is complete, you need to print a set of copies. You can retain one copy for your records and sign and send the second copy by post to Post Bag No.1, Electronic City Office, Bengaluru - 560500. Moreover, if your firm’s accounts need to be audited under Section 44AB, you must furnish the return electronically with a digital signature.

It is important to note that no document should be provided with the return form when you file the ITR 5 Form. If such documents are attached to the ITR Form 5, they will be removed and returned to you. You must match the tax deducted, paid, or collected by you or on your behalf with the Tax Credit Statement in Form 26AS.

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.

How to File Income Tax Returns Using the 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 acknowledgement issued by the Income Tax Department

ITR-5 Form Filing Due Dates

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

Instructions for Filing ITR-5 Form

• Fill up all the mandatory and applicable fields.
• Strike out whichever fields do not apply to you/ write “NA”.
• Write “Nil” to denote zero value.
• Include “- “(minus sign) before figures to indicate negative values.
• Round off all figures to the nearest rupee.
• Likewise, round off total income, profit, loss values and payable tax amount to the nearest multiple of ten rupees.
• Ensure not to enter incorrect data to avoid prosecution under Section 277 of the ITA.

After the Electronic Data Transmission, you can Verify the Returns Through

• Digital signature
• Authenticating the submission through an electronic verification code (EVC) or Aadhaar OTP
• Printing out a hard copy of the return verification form ITR-V and sending the duly signed document to the Centralized Processing Centre (CPC) at Bangalore by post

Who Cannot File the ITR-5 Form?

Now that you know how to file ITR 5, 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 ITR 5 online in a hassle-free manner. Make sure that the return is filed before the last day to avoid any penalty.

Key Takeaways

• The ITR 5 Form is divided into Part A (general and financial details) and Part B (income computation and tax liability).
• You can file the ITR 5 form online using the Income Tax Department’s e-filing portal with or without a digital signature.
• For AY2024-25, the due date for non-audit cases is 31st July 2024 and 31st October 2024 for audit cases.
• Individual taxpayers, HUFs, companies, and those required to file under Form ITR-7 cannot use the ITR 5 form.

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