What is ITR 5? Meaning, Exceptions, Structure & More

In India, as a taxpayer, it is mandatory to file your income tax each year. There are various ITR forms for different sections of Taxpayers or Assesses, like ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 , ITR 7. In the below article, we will cover everything you need to know about what ITR 5 is and whether it is relevant to you. Also read: ITR 4 – Meaning, Who Is Eligible And How To Pay

Specific section of taxpayers have to file ITR 5, an income tax return form, as mandated by the Income Tax Act . ITR 5 is meant for business firms, limited liability partnerships (LLPs), bodies of individuals (BOI), artificial juridical persons (AJP), association of persons (AOPs), estates of the deceased and bankrupt, business trusts, and investment funds. Also read: ITR-1 vs. ITR-2: Differences and Uses Every Taxpayer Should Know

Following section of taxpayers can file the ITR 5 form:

• Firms
• Local authorities
• LLPs, i.e. Limited Liability Partnerships
• Registered or cooperative society
• BOI, i.e. Body of Individuals
• Association of Persons
• A business trust
• Estate of deceased
• Estate of insolvent
• Artificial Juridical person as mentioned in section 2(21)(vi) of the Income Tax Act, 1961
• Persons as defined in section 160(1)(iii)(iv) of Income Tax Act, 1961

Anyone who is a company, LLP, AOP, BOI, an artificial juridical person as defined in section 2(31)(vii), the estate of a decedent, estate of an insolvent, business trust and investment fund, cooperative society, or local government entity can use this form. Also read: 3 Key Restrictions On Cash Transactions Under The Income Tax Act

If you fall under the below category of taxpayers, you need not file ITR-5:

• Individual taxpayers
• HUF
• Company
• Those obligated to file tax returns under section 139(4A), 139(4B), 139(4C), 139(4D), 139(4E) or 139(4F) i.e. ITR 7 form.

ITR 5 includes all types of income other than those mentioned in Section 11 of the Indian Income Tax Act. This act lays down provisions for income related to religious or charitable property. Such purposes do not form part of the total income in the ITR 5 form.

Now that you know the meaning of ITR 5, it is important to understand how to file your returns correctly. The Income Tax Department must receive this return form online in the following ways: by providing the return electronically with a digital signature, by transferring the data electronically, and, finally, by submitting the return's verification in Return Form ITR-V.You can file an income tax return with the ITR 5 form online in a simple and hassle-free manner.Here is the process.

• You must first visit the Income Tax department's e-filing website
• Transfer the data in the return form and digitally sign the document if you wish to submit the verification electronically.
• To verify an electronically filed ITR 5 form, it is mandatory to sign the document digitally

If the verification is not done electronically, you will have to print two copies of the ITR-V form. Send one copy to the address for verification: Post Bag No. 1, Electronic City Office, Bengaluru–560500 (Karnataka).Keep the second ITR-V copy for your personal records.You are not required to attach any document ( including TDS certification) while filing ITR-5. You should match your taxes, whether deducted, collected, or paid, with your Tax Credit Statement Form- 26AS. Audit liability under Section 44AB makes it compulsory for firms to file ITR 5 electronically with a digital signature.

As an assessee reporting audits under Section 10(23C)(iv), 10(23C)(v), 10(23C)(vi), 10(23C)(via), 10A, 10AA, 12A(1)(b), 44AB, 44DA, 50B, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA , 92E, 115JB or 115VW, you have to file the report electronically on or before the last date as determined by the Income Tax department. Also read: Deductions Under Section 80J of the IT Act

1. Fill out the ITR verification document with the required details.2. Mark off all items that don't apply. Make sure the verification is signed before sending the return.3. Choose the person who will be signing the return and their position or designation.Note: Section 277 of the Income-tax Act of 1961 entails a prison sentence and a fine that may be used to prosecute anyone found guilty of filing a fake return or accompanying schedules. Also read: A Brief Guide to Revising Your ITR and Verifying It

Always try to file your ITR 5 form before the given due dates of the assessment year:

• Accounts audits under the Income Tax Act: 31st October
• Report in Form no. 3CEB has to be furnished: 30th November
• Other cases when accounts do not need to be audited: 31st July

Now that you understand what ITR-5 is and who needs to file the form, let’s break down its schedules. You must follow the sequence mentioned below when filling out the form:

• Part A
• Schedules
• Part B
• Verification

Here’s what the form entails:

• Part A: Basic information
• Part A-BS: Your Balance Sheet as of 31st March of the assessment year
• Part A: Manufacturing a/c for the financial year
• Part A: Trading a/c for the financial year
• Part A-P&L: Profit & Loss a/c for the financial year
• Part A-OI: Other information
• Part A-QD: Your quantitative details
• Part B

Know the 31 Schedules:

• Payment details of advance tax and tax on self-assessment
• Summary of tax deducted at source on income other than salary (16A, 16B, 16C)
• Details of income collected at source

• Schedule-HP: Computing income under "Income from House Property"
• Schedule-BP: Computation of income under “profit and gains from business or profession”
• Schedule-DPM: Computing depreciation on plant and machinery under the ITA
• Schedule DOA: Calculating depreciation on assets as per the Income Tax Act
• Schedule DEP: Overview of depreciation for various Assets as per the Income Tax Act
• Schedule DCG: Calculating deemed capital gains from the sale of depreciable assets
• Schedule ESR: Deduction under section 35 for expenditure on scientific research
• Schedule-CG: Computing income under Capital gains.
• Schedule-OS: Computing income under Income from other sources.
• Schedule-CYLA: Income statement after set off of current year’s losses
• Schedule-BFLA: Income statement after set off of unabsorbed loss carried forward from previous years.
• Schedule- CFL: Loss statement carried forward to the coming years.
• Schedule –UD: Unabsorbed Depreciation
• Schedule ICDS: Impact of income computation disclosure standards(ICDS) on profit
• Schedule- 10AA: Computing deduction under section 10AA
• Schedule- 80G: Eligible donation for deduction under section 80G
• Schedule- 80GGA: Donation details used for scientific research or rural development
• Schedule- RA: Donations details made to research associations, etc.
• Schedule- 80IA: Computing deduction under section 80IA
• Schedule- 80IB: Computing deduction under section 80IB
• Schedule- 80IC/ 80-IE: Computing deduction under section 80IC/ 80-IE.
• Schedule 80P: Deductions falling under section 80P
• Schedule-VIA: Summary of deductions under Chapter VIA from total income
• Schedule –AMT: Computing Alternative Minimum Tax payable under section 115JC
• Schedule AMTC: Computing tax credit under section 115JD
• Schedule-SI: Income statement chargeable to tax at special rates
• Schedule IF: Information regarding partnership firms where you are a partner
• Schedule-EI: Income statement that is not included in total income, i.e. Exempt incomes
• Schedule PTI: Income details from investment funds or business trusts under Section 115UA, 115UB
• Schedule TPSA: Section 92CE(2A)- Secondary adjustment to transfer price
• Schedule FSI: Income details from outside India and tax relief
• Schedule TR: Details of tax relief claimed for taxes paid outside the country
• Schedule FA: Foreign Assets and Income from any source outside India
• Schedule GST: Information reported for GST regarding turnover or gross receipt
• Part B – TI: Computing total income
• Part B – TTI: Computing tax liability on your total income
• Tax payments:

Note the important changes in the ITR-5 Form below:

• Tax Audit limit is increased to ₹10 Crores from ₹5 Crores, where cash transactions are less than 5% of the total transactions
• Dividend received from AY 2021-2022 is taxable
• Section 194N states TDS deductions for cash withdrawals is not permitted to be carried forward to the following years

Also read: 5 Penalties Every Taxpayer Must Know for Income Tax Defaults Ready to make the most of your money? Start your tax planning journey now!