Unlocking Success: How to Choose the Perfect ITR Form for Your Business

Filing income tax returns is a crucial responsibility for all taxpayers, including non-individual entities like companies, firms, and trusts. The Indian Income Tax Department provides different forms for various types of taxpayers to ensure that income is reported accurately and taxes are calculated correctly. For non-individual entities, selecting the correct Income Tax Return (ITR) form is essential to comply with legal requirements, avoid penalties, and optimize tax liability. This blog aims to demystify the process of choosing the right ITR form—specifically ITR-5, ITR-6, and ITR-7—by answering common questions and providing clear guidance. By understanding which form to use and when to file, you can ensure that your tax return is accurate, complete, and submitted on time. Let’s dive into the specifics of each form and how Taxyaari can assist you in navigating the complexities of tax filing.

ITR 5

Q1 What is the ITR-5 Form?
The ITR-5 Form is a type of income tax return form used by certain entities. These include Firms, Limited Liability Partnerships (LLPs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), Artificial Juridical Persons (AJPs), Estates of deceased or insolvent individuals, Business trusts, and Investment funds. You can find the most up-to-date version on the Income Tax Department's website.

Q2 Who Can File the ITR-5 Form? The following entities can use the ITR-5 Form:

  1. Firms
  2. Limited Liability Partnerships (LLPs)
  3. Associations of Persons (AOPs)
  4. Bodies of Individuals (BOIs)
  5. Artificial Juridical Persons (AJPs)
  6. Local Authorities
  7. Representative Assessees
  8. Cooperative Societies
  9. Societies registered under the Societies Registration Act, 1860, or any state law
  10. Trusts (except those filing Form ITR-7)
  11. Estates of deceased individuals
  12. Estates of insolvent individuals
  13. Business Trusts
  14. Investment Funds

Q3 Who Cannot File the ITR-5 Form? The following are not eligible to use the ITR-5 Form:

  • Individual taxpayers
  • Hindu Undivided Families (HUFs)
  • Companies
  • Taxpayers required to file Form ITR-7

Q4 When is the Due Date for Filing the ITR-5 Form?

  • For entities requiring an audit: October 31 of the assessment year.
  • For entities submitting Form No. 3CEB: November 30 of the assessment year.
  • For other entities: July 31 of the assessment year.

ITR- 6

Q1 Who Can File the ITR-6 Form? The ITR-6 Form is meant for companies that do not claim tax exemptions for income from property used for charitable or religious purposes under section 11 of the Income Tax Act.

Q2 Who Cannot File the ITR-6 Form? The following entities cannot file the ITR-6 Form:

  • Individuals
  • Hindu Undivided Families (HUFs)
  • Firms
  • Associations of Persons (AOPs)
  • Bodies of Individuals (BOIs)
  • Local Authorities
  • Artificial Juridical Persons
  • Companies that claim exemptions under section 11

Q3 Eligibility Criteria for Filing the ITR-6 Form Any company registered under the Companies Act or other applicable laws can file the ITR-6 Form if they do not claim tax exemptions under section 11.

Q4 What is Required for E-Filing Audit Reports? If a company's accounts need to be audited under section 44AB, they must submit the audit report electronically. This includes details about the auditor and the date of submission.

Q5 Structure of the ITR-6 Form The ITR-6 Form is divided into two main parts, Part A and Part B, along with various schedules:

  • Part A: General Information (Name, PAN, address, etc.)
  • Trading Account (Income and expenditure details)
  • Balance Sheet (Liabilities, share capital, etc.)
  • Manufacturing Account (Inventory details)
  • Profit and Loss Account (Profits or losses during the financial year)

Part B includes:

  • Part B-TI: Computation of Total Income
  • Part B-TTI: Computation of Tax Liability on Total Income

Due Dates

  • For companies requiring an audit: October 31 of the assessment year.
  • For companies submitting Form No. 3CEB: November 30 of the assessment year.
  • For other companies: July 31 of the assessment year.

ITR 7

Q1 What is the ITR-7 Form? The ITR-7 Form is used by certain individuals and entities to file their income tax returns under specific sections of the Income Tax Act:

  • Section 139(4A): Income of religious and charitable trusts
  • Section 139(4B): Income of political parties
  • Section 139(4C): Income of scientific research institutions
  • Section 139(4D): Income of educational institutions

Q2 Who Can File the ITR-7 Form? You should file the ITR-7 Form if you fall under any of these categories:

  • Section 139(4A): Income from property held under trust for charitable or religious purposes
  • Section 139(4B): Political parties with income exceeding the non-taxable limit
  • Section 139(4C): Scientific research institutions, hospitals, educational institutions, universities, or news agencies
  • Section 139(4D): Colleges and universities not required to file returns otherwise
  • Section 139(4E) and Section 139(4F): Business trusts and investment funds without filing obligations under other provisions

Q3 When is the Due Date for Filing the ITR-7 Form?

  • For entities not requiring an audit: July 31 of the assessment year.
  • For entities requiring an audit: September 30 of the assessment year.

These dates may change based on notifications from the Income Tax Department. For example, the deadline for the Assessment Year 2023-24 was extended from October 31, 2023, to November 30, 2023.

Filing taxes can be daunting. For expert assistance with filing your ITR’s, reach out to www.taxyaari.com Our team will ensure your return is filed accurately and on time. Contact us for hassle-free tax filing. Get the support you need today!

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