What is ITR-5 Form?
ITR-5 is an Income Tax Return form designed for entities such as Partnership Firms, LLPs, AOPs, BOIs, Business Trusts, and Investment Funds excluding companies and individuals.
Who Should File ITR-5?
ITR-5 should be filed by:
- Partnership Firms
- Limited Liability Partnerships (LLPs)
- Association of Persons (AOP)
- Body of Individuals (BOI)
- Artificial Juridical Person (AJP)
- Business Trusts and Investment Funds
- Estate of Deceased or Insolvent
- Cooperative Societies and Local Authorities
Who Cannot File ITR-5?
ITR-5 cannot be filed by:
- Individuals
- HUFs
- Companies (They should file ITR-6 or ITR-7 depending on category)
- Taxpayers filing under presumptive schemes eligible for ITR-4
Documents Required for ITR-5 Filing
- PAN of entity
- Partnership deed or LLP agreement details
- Balance Sheet and Profit & Loss account
- Audit report under Section 44AB (if applicable)
- Form 26AS and AIS report
- Partner or member details
- Capital account details
- Business turnover and GST summary
- TDS certificates (Form 16A, 16B if applicable)
- Investment and deduction proof
Structure of ITR-5 Form
| Section | Description |
|---|---|
| Part A | General information |
| Part A-BS | Balance Sheet as on 31st March |
| Part A-P&L | Profit and Loss Account |
| Part A-OI | Other Information |
| Part A-QD | Quantitative Details |
| Schedule HP | Income from House Property |
| Schedule BP | Business or Professional Income |
| Schedule CG | Capital Gains |
| Schedule OS | Income from Other Sources |
| Schedule SI | Special rate income details |
| Schedule EI | Exempted Income |
| Schedule PTI | Pass-through income details |
| Schedule IT | Advance Tax & Self-Assessment Tax |
| Schedule TDS & TCS | Tax Deducted/Collected details |
| Schedule IF | Information about partners or members |
| Schedule K | Partner’s share reporting (for LLPs/Firms) |
| Schedule VIA | Deductions under Chapter VI-A |
| Schedule AMT | Alternate Minimum Tax |
| Verification | Declaration and authentication |
Step-by-Step Process to File ITR-5
- Identify entity type and confirm eligibility for ITR-5
- Collect financial statements and TDS/TCS details
- Reconcile Form 26AS and AIS with books of accounts
- Fill general information including firm/LLP registration details
- Enter income details from business, capital gains, and other heads
- Fill partner/member details in Schedule IF or Schedule K
- Claim deductions under Chapter VI-A if applicable
- Report audit details if turnover exceeds tax audit limits
- Compute final tax liability and pay self-assessment tax if required
-
Submit return and verify using DSC or EVC
Tax Audit Requirement for ITR-5
| Entity Type | Audit Requirement |
|---|---|
| Business Firm/LLP | Turnover exceeds Rs. 1 crore (Rs. 10 crore if 95% receipts are digital) |
| Professional Firm | Gross receipts exceed Rs. 50 lakh |
| Presumptive Scheme Opt-out | Audit mandatory for 5 years |
| Cooperative Societies under Section 44AB | Audit applicable if threshold exceeded |
Details to Be Filled in Balance Sheet Section
- Partner or member's capital
- Secured and unsecured loans
- Trade creditors and debtors
- Cash, bank balances, and inventories
- Fixed assets and depreciation details
- Investments, deposits, and advances
Profit and Loss Account Information
- Gross turnover or receipts
- Direct expenses like purchases, wages, freight
- Indirect expenses like rent, interest, depreciation
- Net profit or loss before tax
- Adjustment as per Income Tax Act
Details of Partners or Members (Schedule IF)
This section requires:
- Name and PAN of each partner/member
- Percentage of profit share
- Capital contribution details
- Status of partner (working or non-working)
Tax Payment and TDS Details
- Enter advance tax and self-assessment tax paid
- Report TDS on receipts under sections 194C, 194J, etc.
- Match TDS with Form 26AS to avoid mismatch
Verification and Submission of ITR-5
- Review all entries carefully
- Compute tax and pay remaining liability
- Submit ITR-5 online using Digital Signature Certificate (mandatory for LLPs and audited firms)
- Download acknowledgment after successful filing
Common Mistakes to Avoid in ITR-5
- Incorrect partner or member PAN details
- Mismatch between financial statements and tax return schedules
- Not attaching audit report before filing (if applicable)
- Incomplete Schedule IF or Schedule K
- Submitting without DSC in case of LLPs or audit cases
Benefits of Filing ITR-5
- Legal compliance with Income Tax Act
- Essential for loan processing, contracts, tenders
- Required for partner income reporting
- Avoids penalties and interest under Sections 234F and 271B
- Helps maintain clean financial and compliance records
Certification
