ITR-5 Form - Who Should File and How to File Online

1. MSME Disclosures - Section 43B(h): Mandatory disclosures for payments to Micro and Small Enterprises have become critical given the disallowance provisions under Section 43B(h). Non-compliance can adversely affect taxable business income.
2. Capital Gains -Schedule CG: The reporting of capital gains has become more comprehensive with enhanced reporting for non-residents and for specified securities, affecting tax computation and audit scrutiny.
3. Foreign Tax Credit - Schedules TR and FA: Taxpayers are now required to provide further detailed reporting for claiming foreign tax credit mentioned under Rule 128. This would be essential for cross-border entities to ward off double taxation.
4. Legal Entity Identifier (LEI): Entities dealing in financial transactions amounts of Rs.50 crores or more, must now disclose their LEI in line with global financial reporting and compliance.
5. Schedule Part A -OI and Audit:
   1. Changes in accounting policies
   2. Valuation methods
   3. Turnover reconciliation between GST and Income tax have become more detailed, which will have repercussions around audit queries and also determination of income.
6. Start-ups Deductions - Section 80-IAC: Start-ups must now disclose registration details and declare registration to avail deduction under Section 80-IAC. The new change makes start-up deductions more formal and identifiable going forward.
7. Enhanced Schedule 80GGA Reporting: With the new disclosure requirements under Schedule 80GGA, the contribution information must now be broken down (for example, research, universities, rural development, etc., and will affect deduction claim.
8. Dropdown for 'Return Filed Under Section': The inclusion of a dropdown improves the reportability of the section being filed under (e.g., 139(1), 139(4), etc.). The logic implemented for the auto-adjustment of dates makes for an overall ease of filing.
9. Updated Business Codes (NIC 2008): Business codes are now consistent with NIC 2008. They are uniform across the ITR, GST, and MCA filings. This will be good as there is some consistency, but a low impact on tax liability directly.
10. Improved Offline / JSON Utility: The offline/JSON utility has better checks (for the optimal submission), which implicitly encourages users to double check everything before submission. This improves the user experience, but there is no impact on tax computation.

Who should use the ITR 5 Form?

The ITR-5 Forms is to be used by firms, LLPs, Associations of Persons (AOPs), BOIs, Artificial Judicial Persons, Cooperative Societies, and Local Authorities.

Bear in mind that persons who are required to file returns under Sections 139(4A), 139(4B), 139(4C), or 139(4D) need not use this form.

Eligibility Criteria for ITR-5 Form

The ITR-5 Form is eligible for filing by the following individuals:

1. Firm
2. Limited Liability Partnership (LLP)
3. Association of Persons (AOP)
4. Body of Individuals (BOI)
5. An artificial juridical individual directed to in section 2(31)(vii)

1. Estate of deceased
2. Estate of insolvent
3. Business trust and investment fund
4. Cooperative society
5. Local authority

However, individuals who are required to file the return of income under sections 139(4A), 139(4B), 139(4C), or 139(4D) should refrain from using this form. If you need help deciding which ITR form to use, you can refer to our guide for assistance.

Structure of ITR-5 Form

The structure of the ITR-5 Form consists of two parts and several schedules, as follows:

The table below lists the overview of the different schedules in ITR-5:

Tax Payments:

1. Advance Tax and Self-Assessment Tax: Details of advance tax payments and self-assessment tax are provided.

1. Tax Deducted at Source (TDS): Information on TDS on income other than salary (e.g., 16A, 16B, 16C) is included.

1. Tax Collected at Source (TCS): Details on tax collected at source for specific transactions are covered.

How to File ITR-5 Form

The Income Tax Department advises following this sequence for filling out your income tax return:

1. Part A: Start by completing Part A, which includes general details and information about the taxpayer.

1. Schedules: Next, fill out the relevant schedules. These cover specific details such as income sources, deductions, and other adjustments.

1. Part B: After completing the schedules, proceed to Part B, which involves the computation of total income and tax liability.

1. Verification: Finally, review and verify all the information provided. Ensure accuracy before submitting the return.

To file your ITR-5 Form, you need to follow the steps below:

Online Filing

1. Open the Income Tax Department and log in to its e-Filing portal.
2. Choose the option to file the return electronically with a digital signature or by transmitting the data electronically and then submitting the verification in Return Form ITR-5.
3. If you file the return online, make sure to print two copies of the ITR-5 Form.
4. Sign one copy of the ITR-5 and send it by ordinary post to Post Bag No. 1, Electronic City Office, Bengaluru–560500 (Karnataka).
5. Retain the other copy for your records. Note that if your firm's accounts are audited under section 44AB, you must file the return electronically with a digital signature.

Offline Filing

1. You can file the ITR-5 Form offline by filling out a paper form or using a bar-coded return.
2. When filing on paper, an acknowledgement slip is provided along with the return.

Note:

1. No annexure or document, including TDS certificates, should be attached to the return form. Any documents enclosed will be detached and returned.

1. It is advisable to verify the taxes deducted/collected/paid by comparing them with your Tax Credit Statement Form 26AS.

Due Dates for Filing ITR-5 Form

1. For accounts audited under the Income-Tax Act: October 31 of the assessment year.
2. When reporting in Form No. 3CEB is to be furnished: November 30 of the assessment year.
3. In other cases where accounts do not need to be audited: July 31 of the assessment year.

Who Can't File ITR-5 Form

1. Individual assesses
2. Hindu Undivided Family (HUF)
3. Company
4. 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)

Verification Document

1. Fill in the required information in the verification document.
2. Strike out any sections that are not applicable to you.
3. Sign the verification before submitting the return.
4. Be aware that making false statements in the return or accompanying schedules may lead to prosecution under section 277 of the Income Tax Act, 1961, and conviction can result in rigorous imprisonment and fines.