ITR Filing: Know About Your ITR Form 5 and all other ITR forms In Detail

 

Filing an income tax return is one of the civic responsibilities of each citizen of the country. The form is divided into different categories and sections in accordance with the profession and income of the citizen. Before filing Income Tax Return Form, one should know the section he belongs. The form required is absolutely based on the size of the taxpayer’s income, or in most cases where he holds assets in a country outside India or the Income that accrues to him from another country. ITR 5 Form is used by specific parties which will be discussed in detail in this article.

 

What is Income Tax Filing?

This is the process by which eligible individuals pay their taxes to the government. All Individuals whose incomes are above Rs 5000 are qualified to send in their tax returns. Income Tax Filing can be made manually or electronically.

 

What is an Income Tax Return Form?

This is a simplified tax filing process for all income earners. It is divided into sections based on the income of the individual. Each income earner must fall into one of the ITR groupings. Presently, we have ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 and ITR 7.

 

Types of Income Tax Return Form

Although there are nine types of income tax return forms that an eligible person could use to file his returns, the under listed forms should be most considered by individuals as directed by the Central Board of Direct Taxes.

ITR-1

This Form is also called Sahaj and is filed only by an individual taxpayer. Any other individual who may intend to pay tax but does not fall under the 2017-2018 assessment will not be allowed to file in ITR-1.

Who can use this form?

• Individuals with income from Salary/Pension
• Individuals with Income from one house property
• Individuals whose income from agriculture is less than Rs 5,000.

Who cannot use this Form?

• Individuals with income from foreign assets
• Individuals with income from profession or business
• If you earn income from more than one house property.
• Individuals with taxable income gains.

 

ITR-2A

The ITR-2A form was introduced in the year 2015-2016 assessment year and is mainly for the Hindu Undivided Family (HUF) or an individual taxpayer.

Who can use this form?

• Individuals with income from salary or pension
• Those who earn income from more than one housing property
• Individuals who have no income from the sale of any asset
• Individuals who have no asset in other countries
• Individuals with income source from fixed deposits, shares etc.

Who cannot use this form?

• If you have earned income from lottery or horse racing.
• Individuals with income from other business.

 

ITR -2

This form is mostly used by an individual who has income from the sale of assets and properties. Those who earn income outside India and members of Hindu Undivided Family are in this group.

Who can use this form?

• Persons with income from salary or pension
• Individuals with income from the sale of properties
• Persons whose overall income from agriculture is above Rs 5,000
• Income earned from lotteries or horse racing
• Individuals with income from outside India

Who cannot use this form?

• Individuals with income from a business venture.

 

ITR-3

This form is used by an individual or a Hindu Undivided Family who operate as a partner in a firm but neither conducts business with the firm nor earn income through any business conducted by the firm. The income filed in this form is from business in the form of salary, bonus, interest, commission, and remuneration.

Who can use this form?

• Individuals who earn income from business or profession
• Persons who earn income from house property, salaries/pension etc.

ITR-4

The form is used by an individual who has conducted a business or has earned income from a profession. The income earned has no limit and is applicable to any type of business or profession.

Who can use this form?

• Doctors
• Shopkeepers
• Contractors
• Retailers
• Designers etc.

ITR – 4S

The ITR-4S form is used by any individual or HUF for filing their tax return. It is also called Sugam. It is used in special cases and is calculated based on income earned from business with the presumptive method.

Who can use this form?

• Any person who can earn income from any business
• If you earn income from a single property
• Individuals with total income from agriculture is below Rs 5,000

Who cannot use this form?

• Individuals who own assets outside India
• Individuals who earn income from countries outside India
• Individuals who earn income from the sale of assets or property in India.

 

ITR-5

The ITR-5 form is used mainly by firms, Limited Liability Partnerships (LLPs), Body of Individuals (BOIs), Association of Persons (AOPs), Co-operative Societies, Artificial Judicial Persons and Local Authorities. More on this section is considered in below.

Who can’t use this form?

• Individual
• Company
• Hindu Undivided Family

 

HOW TO FILE ITR-5 FORM

ITR-5 Form is filed electronically by persons with books of accounts that have been audited u/s 44AB. The verification should be completed using a digital signature. For persons with books of accounts that do not require to be audited u/s 44AB, the verification can be carried out using a digital signature, Electronic Verification Code and then post the printed and signed document to the Electronic City Office at Karnataka.

RULES TO FOLLOW WHILE FILLING THE FORM

• Any schedule that is not applicable should be scored ‘NA’.
• Where an item is inapplicable, write ‘NA’
• Nil should be written to denote empty figures
• Use “-” to denote negative figures or losses
• Round all figures to the nearest whole Rupee.

 

SEQUENCE FOR FILLING OUT PARTS AND SCHEDULE

The recommended sequence for filling the form is as written:

PART A: this is the first part to be filled. It requires general information which is entered by the filer.

SCHEDULES: the tax filer needs to put in the basic details required in the various schedule.

PART B: all the computation of the filer’s income and calculation of tax liability is reflected in this section.

PART C:

VERIFICATION: this part contains the declaration that must be duly signed along with the form.

 

HOW TO FILL THE VERIFICATION DOCUMENT

The steps required to fill the verification document are as specified below:

• Fill out the required information
• Ignore what is not applicable
• Sign the document
• Post the signed document.

 

FILING ITR-5 WITH H&R BLOCK

Below are the simple steps to follow in filing your Business Income Tax Return with ITR-5

• Fill in your details to get a callback
• After you have received the callback, provide your details
• Upload your documents and payment details to the tax agent
• Contact a tax advisor on processing all deductions and expenses
• Your tax expert will file your ITR including deductions and tax savings

STRUCTURE OF ITR-5

The form has two sections and various schedules:

Part A: General Information

Part B: Outline of the total income tax computation with special attention to chargeable income.

Subdivisions of Part A

• Part A-GEN: information of identification is required along with the relevant data.
• Part A-BS: requires the balance sheet as of March of every year.
• Part A-P&L: this part requires information containing profit and loss account for the year.
• Part A-OI: in the case where the individual is not liable for auditing u/s 44AB, this part is optional.
• Part A-QD: the information required from this part is on the quantitative details of the sales made.

Part B: information on this part details the total income and tax liability of the individual. Its divisions are as below:

• Part B-TI: the taxpayer will have to provide information on the total income.
• Part B–TTI: information on the total tax liability of the taxpayer is required in this section.

 

Validation Rule of ITR Form 5

The validation of ITR form 5 is carried out in three categories at the e-filing or CPC end.

Category of Defect A: returned will not be permitted to be uploaded with an error message displayed.

Category of Defect B: the returned data will be permitted for uploading, however, the individual will be notified of any error that is discovered and appropriate communications will be issued from the headquarters.

Category of Defect C: the utility providers which served as a third-party in the procedure will be notified of the poor quality of the data and will be warned against any future occurrence.

 

LATEST CHANGES IN ITR FORM 5 FOR ASSESSMENT YEAR 2018-2018

These changes have been supplied by the tax department with the aim of simplifying the online process of filing ITR-5 form. Thus more information is requested from taxpayers to facilitate the online assessment process.

• A new field has for a penalty for late filing of ITR. Late filers will have to supply details of the penalty fees paid.
• A new field is now inserted for filers to provide information capital gains transfer due to unquoted shares.
• Amount taxable as a gift can now be reported.
• A new field has been inserted to report disallowance of expenses.
• A field to facilitate claims were the TDS is deducted on the name of another is inserted.
• The form now requests the taxpayer claiming relief as per DTAA report to provide more details.
• More details will now be required where the taxpayer claims capital gain exemptions.
• New forms now require taxpayers to separate reporting of cessation or remission of trading liability in case of other sources of income.
• GST paid and refunded can now be reported.

 ITR-6

This form is to be used by companies or organizations that claim being exempted from tax in accordance with section 11. These organizations that lay claims to tax exemptions with respect to section 11 are those whose income received accrued from charitable donations. It is only filed online.

ITR-7

This form is filed by individuals or companies that fall in the underlined sections.

• Section 139(4A) – returns can be filed by an individual that earn income from any property that is for religion or charity.
• Section 139(4B) – here the political parties will file their returns provided their income is within the taxable limit.
• Section 139(4C) – the following entities will file their returns under this section: institutions mentioned under Section 10(23A), an association involved in scientific research, news agency, medical or educational institution and any fund.
• Section 139(4D) – under this section, returns are filed by institutions such as colleges and universities where tax returns are not required to be supplied with respect to the laid provisions in this section.

 

Conclusion

Payment of taxes is a mandatory responsibility of every citizen but must be carried out in accordance with the provisions of the law. The introduction of the e-payment platform has simplified and accelerated the tax assessment process. Income Tax Return forms are the only means by which taxes are remitted to the government. An individual must have a clear understanding of these forms and their various provisions to pay his tax accurately and timely.