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August 31, 2020

All you need to know about ITR 5

All you need to know about ITR 5

An income tax return is basically a document that is filed as per the provisions of the Income Tax Act, reporting one’s income, profits and losses and other deductions as well as details about tax refund or tax liability. 

Due date for all income-tax return for FY 2019-20 is extended from July 31 2020 and 31 October 31, 2020 to November 30, 2020 to provide relief to taxpayers in view of the current COVID 19 pandemic.

The Central Board of Direct Taxes (CBDT) has notified and released various ITR forms for different purposes. If you file your return using the wrong form, then it will be considered defective.

If the defect is not rectified, the return will be regarded as invalid, and the department will treat it as if the person did not file his return. Hence it is extremely important to know which ITR is applicable for which kind of assessee and for what income.

The taxpayers have to file returns on the basis of the income earned in a financial year and the kind of entity they fall under. Let’s explore in detail the taxpayers who are required to file Form ITR-5 and other relevant instructions pertaining to the same.

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What is ITR 5 Form?

ITR 5 is an income tax return is meant for firms, LLPs, AOPs (Association of persons) and BOIs (Body of Individuals), Artificial Juridical Person (AJP), Estate of deceased, Estate of insolvent, Business trust and investment fund.

Who Cannot File ITR 5 Form?

Below mentioned section of taxpayers/ assesses cannot file ITR 5 form: 

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

How to file ITR 5 Form?

  • The ITR-5 Form can be filed with the Income Tax Department in two ways i.e. online and offline.
  • The form can be filed in an offline way either by furnishing the return in a paper form or by furnishing a bar-coded return. When the return filed on paper, the acknowledgement slip paired with the return form should be properly filled.
  • In the Online way, it can be filed by furnishing the return electronically under digital signature or by transmitting the data in the return electronically followed by the submission of the return verification in Return Form ITR V.
  • Once the ITR 5 filing is complete, you need to print a set of its 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 need to furnish the return electronically with a digital signature.

What is the format of the ITR-5 Form?

The Form has been divided into the following parts:

  • Part A: General information
  • Part A-BS: Balance Sheet
  • Part A-Manufacturing Account
  • Part A-Trading Account
  • Part A-P&L: Profit and Loss Account
  • Part A-OI: Other information
  • Part A-QD: Quantitative details

The Form has been divided into the following schedules:

  • Schedule-HP: Computation of income under the head Income from House Property
  • Schedule-BP: Computation of income under the head “profit and gains from business or profession”
  • Schedule-DPM: Computation of depreciation on plant and machinery under the Income Tax Act
  • Schedule DOA: Computation of depreciation on other assets under the Income Tax Act
  • Schedule DEP: Summary of depreciation on all the assets under the Income-tax Act
  • Schedule DCG: Computation of deemed capital gains on sale of depreciable assets
  • Schedule ESR: Deduction under section 35 (expenditure on scientific research)
  • Schedule-CG: Computation of income under the head Capital gains.
  • Schedule-OS: Computation of income under the head Income from other sources.
  • Schedule-CYLA: Statement of income after set off of current year’s losses
  • Schedule-BFLA: Statement of income after set off of unabsorbed loss brought forward from earlier years.
  • Schedule- CFL: Statement of losses to be carried forward to future years.
  • Schedule –UD: Unabsorbed Depreciation
  • Schedule ICDS: Effect of income computation disclosure standards on profit
  • Schedule- 10AA: Computation of deduction under section 10AA
  • Schedule- 80G: Details of donation entitled for deduction under section 80G
  • Schedule- 80GGA: Details of donation for scientific research or rural development
  • Schedule- RA: Details of donations to research associations etc.
  • Schedule- 80IA: Computation of deduction under section 80IA
  • Schedule- 80IB: Computation of deduction under section 80IB
  • Schedule- 80IC/ 80-IE: Computation of deduction under section 80IC/ 80-IE.
  • Schedule 80P: Deductions under section 80P
  • Schedule-VIA: Statement of deductions (from total income) under Chapter VIA.
  • Schedule –AMT: Computation of Alternate Minimum Tax payable under section 115JC
  • Schedule AMTC: Computation of tax credit under section 115JD
  • Schedule-SI: Statement of income which is chargeable to tax at special rates
  • Schedule IF: Information regarding partnership firms in which you are partner
  • Schedule-EI: Statement of Income not included in total income (exempt incomes)
  • Schedule PTI: Pass Through Income details from business trust or investment fund as per section 115UA, 115UB
  • Schedule TPSA: Secondary adjustment to transfer price as per section 92CE(2A)
  • Schedule FSI: Details of Income from outside India and tax relief
  • Schedule TR: Details Summary of tax relief claimed for taxes paid outside India
  • Schedule FA: Details of Foreign Assets and Income from any source outside India
  • Schedule GST: Information regarding turnover/gross receipt reported for GST
  • Schedule DI: Schedule of tax-saving investments or deposits or payments to claim deduction or exemption in the extended period from 1 April 2020 until 30 June 2020
  • Part B – TI: Computation of total income
  • Part B – TTI: Computation of tax liability on total income
  • Tax payments:

How to Fill Out the Verification Document?

One has to furnish all the required information in the verification document. Strike out whatever is not applicable. Make sure that the verification has been duly attested before filing the return. Mention the designation of the person signing/attesting the return.

Any person making a false statement in the return or the accompanying schedules shall be liable to be prosecuted under section 277 of the Income-tax Act, 1961 and on conviction be punishable under that section with rigorous imprisonment and with fine.

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