Filing income tax returns is mandatory for all eligible entities in India. For partnership firms, LLPs, AOPs, and other specified entities, the ITR-5 form is the correct choice. This guide covers everything you need to know about ITR-5, including eligibility, key features, required documents, and a step-by-step filing process.
1. What is ITR-5?
The ITR-5 (Income Tax Return Form 5) is used by entities that are not eligible to file ITR-3, ITR-4, or ITR-7. It is designed for:
- Partnership firms
- Limited Liability Partnerships (LLPs)
- Association of Persons (AOPs)
- Body of Individuals (BOIs)
- Artificial Juridical Persons (AJPs)
- Estate of deceased or insolvent persons
- Business trusts & investment funds
Local authorities & cooperative societies
2. Who Should File ITR-5?
You must file ITR-5 if your entity falls under the above categories, regardless of income level. Even if the business has zero income or losses, filing is mandatory.
Exclusions:
- Individuals & HUFs (use ITR-1 to ITR-4)
- Companies (use ITR-6)
- Trusts/NGOs (use ITR-7)
3. Key Features of ITR-5
A. Comprehensive Income Reporting – Covers:
- Business/profession income
- House property income
- Capital gains
- Other income (interest, dividends, etc.)
B. Financial Statements Required
- Must attach Profit & Loss A/c and Balance Sheet.
C. Tax Audit Applicability
- Business turnover exceeds ₹1 crore (₹10 crore if 95%+ digital transactions).
- Profession receipts exceed ₹50 lakh.
D. Presumptive Taxation Options
- Section 44AD (for businesses with turnover ≤ ₹3 crore)
- Section 44ADA (for professionals with receipts ≤ ₹75 lakh)
- Section 44AE (for transport businesses)
E. Digital Signature Required
- Mandatory for companies & LLPs, optional for others.
4. Documents Required for Filing ITR-5
Before filing, gather these documents:
✔ PAN card of the entity
✔ Financial statements (P&L, Balance Sheet)
✔ Bank statements
✔ Tax audit report (if applicable – Form 3CA/3CB & 3CD)
✔ Details of partners/members (PAN, profit-sharing ratio)
✔ Previous year’s ITR (if any)
✔ Depreciation chart (if claiming depreciation)
5. Step-by-Step Process to File ITR-5
Step 1: Download the ITR-5 Form
- Available on the Income Tax e-filing portal in Excel/Java utility format.
Step 2: Fill in the Details
- Part A (General Information) – PAN, Aadhaar, contact details.
- Part B (Financial Details) – Fill in P&L and Balance Sheet.
- Part C (Income Computation) – Report income under different heads.
- Tax Computation – Calculate tax liability, including advance tax and TDS.
Step 3: Validate & Generate XML
- Ensure all details are correct.
- Generate an XML file for upload.
Step 4: Upload on Income Tax Portal
- Log in to the e-filing portal.
- Go to “File Income Tax Return” → “ITR-5” → Upload XML.
Step 5: E-Verify the Return
- Use Aadhaar OTP, EVC, or Digital Signature.
- Alternatively, send a signed ITR-V to CPC Bengaluru within 120 days.
6. Due Date for Filing ITR-5
- Normal Due Date: July 31 (unless extended).
- Tax Audit Cases: September 30 (if audit applies).
- Belated Return: Can be filed by December 31 (with penalties).
7. Common Mistakes to Avoid
- Incorrect financial statements – Mismatch in P&L or Balance Sheet.
Missing tax audit report (if turnover exceeds limits).
Wrong partner details – Ensure correct profit-sharing ratio.
Late filing – Attracts penalties (₹5,000 to ₹10,000 under Section 234F).
8. Conclusion
Filing ITR-5 correctly ensures compliance and avoids legal hassles. Since it involves detailed financial reporting, businesses should maintain accurate books of accounts and seek professional help if needed.