What is ITR-5? Applicability, Filing Process & Updates for FY 25-26

Filing income tax returns in India often feels complicated because there are so many forms. Every form is designed for different taxpayers’ categories.

For a smooth filing, choosing the right form is essential. Thus, to make your understanding better about income tax return filing, we have simplified ITR-5 in this blog post.

We will discuss what ITR-5 means, the ITR-5 due date, and who can file this particular form. You can find other types of ITR forms in our blog section. Let’s now move on to the in-depth details of the ITR-5 form.

What is the ITR-5 Form?

The ITR-5 form is for entities like firms, LLPs (Limited Liability Partnerships), AOPs (Association of Persons), BOIs (Body of Individuals), AJPs (Artificial Juridical Persons), estates of deceased persons, estates of insolvent persons, cooperative societies, business trusts, and investment funds.

These entities need to report their total income, claim deductions, pay taxes, and comply with the Income Tax Act, 1961.

Who can file ITR-5?

The ITR-5 form is applicable to a wide range of taxpayers, including:

• Firms
• Limited Liability Partnerships (LLPs)
• Association of Persons (AOPs)
• Body of Individuals (BOIs)
• Artificial Juridical Persons (AJPs) under Section 2(31)(vii)
• Local Authorities under Section 2(31)(vi)
• Representative Assessees under Section 160(1)(iii) or (iv)
• Cooperative Societies
• Registered Societies (under the Societies Registration Act, 1860, or any state law)
• Trusts (except those that need to file ITR-7)
• Estate of deceased individuals
• Estate of insolvent persons
• Business Trusts (Section 139(4E))
• Investment Funds (Section 139(4F))

If you fall under any of the above categories, you have to use ITR-5 for filing tax. You can file ITR 5 using the official government portal or a third-party income tax software.

Who cannot file ITR-5?

While ITR 5 covers a broad range of taxpayers, it is not meant for:

• Individuals
• Hindu Undivided Families (HUFs)
• Companies
• Taxpayers required to file ITR-7 (under Sections 139(4A), 139(4B), 139(4C), 139(4D))

So, the ITR-5 form is not for you if you’re an individual taxpayer or a company.

Key Updates in ITR-5 for AY 2025-26

The Income Tax Department updates itself regularly in order to make sure that forms address the current law and financial needs. In ITR-5, a number of significant changes are introduced in AY 2025-26:

• Legal Entity Identifier (LEI): Entities undertaking financial transactions of INR 50 crore or more must disclose their LEI.
• Payments to MSMEs: More detailed disclosures are required for payments to Micro and Small Enterprises, especially for Section 43B(h) compliance.
• Schedule 80GGA Updates: Contributions to research institutions, universities, and rural development programmes need separate reporting.
• Capital Gains Reporting: Non-residents and those dealing in specified securities must provide more details under Schedule CG.
• Accounting Disclosures: Any changes in accounting policies, valuation methods, or GST turnover reconciliations must now be reported in Part A-OI and Audit.
• Foreign Tax Credit (FTC): Enhanced details are required under Schedule TR and FA for claiming FTC as per Rule 128.
• Startups under Section 80-IAC: Eligible startups must furnish declarations and registration IDs for deduction claims.
• Return Filing Section Dropdown: A new dropdown explains which section returns are being filed with auto-adjustment according to due dates.

These updates are aimed at transparency, compliance, and simplicity of verification, and hence, it becomes even more important that entities keep proper records.

Audit Report Filing Along with ITR-5

Some taxpayers who file ITR-5 also have to file an audit report under provisions such as Sections 44AB, 92E, 10A, 80-IA, and more.

The most important thing is that the audit report should be submitted in a digital format, prior to the due date of the return. It also needs information like the acknowledgment number and UDIN (Unique Document Identification Number).

Verification and Compliance

You should also fill out the verification document when filling in ITR-5:

• Cross out the irrelevant.
• Make sure that the signature on the return indicates the name or position of the individual who signed it.

Remember: any false statement will be subject to a punishable offence under Section 277 of the Income Tax Act, which attracts imprisonment and fines.

Wrapping Up

The ITR-5 Form is suitable for a broader range of taxpayers, including individuals and companies. Be it an LLP, AOP, BOI, cooperative society, or a business trust, this type makes your income, deductions, and taxes reported in the right way.

According to the revision for AY 2025-26, all should know about disclosures, particularly in areas like MSME payments, capital gains, and foreign tax credits.

Therefore, in case you fall under any of the categories required to file ITR-5, it is advisable to ensure that you have your documents ready before the deadline. Improper compliance now will save you the unnecessary stress tomorrow.

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