ITR-5 Filing Guide in Hyderabad

01

What is ITR-5?

ITR-5 is the Income Tax Return form filed by Firms, LLPs, AOPs, BOIs and other non-individual entities - excluding Companies and Trusts who have their own separate forms.

It is the official way for these entities to report their total income, claim deductions, pay due taxes, and stay legally compliant with the Income Tax Department of India.

Filing ITR-5 on time ensures the firm avoids penalties, can carry forward losses, and keeps its financial records clean for banking, GST, and compliance purposes.

ITR-5 covers all heads of income - business/profession, house property, capital gains, and other sources - at the entity level.

02

Who Needs to File ITR-5?

Partnership Firm

Registered or unregistered firms with two or more partners carrying on any business or profession.

LLP - Limited Liability Partnership

LLPs registered under the LLP Act 2008 - incorporated with ROC and having an LLPIN.

AOP / BOI

Association of Persons or Body of Individuals - a group jointly earning income, taxed as a unit.

AJP / Estate of Deceased

Artificial Juridical Person or estate of a deceased person managed by a legal heir or administrator.

Business Trust

SEBI-registered business trusts such as REITs and InvITs - file under ITR-5 with special provisions.

Investment Fund

Category I and II Alternate Investment Funds (AIFs) registered with SEBI - file ITR-5.

03

ITR-5 vs Other Forms - Know Your Form

Entity Type	Correct ITR Form	Important Note
Partnership Firm	ITR-5	Register deed u/s 184 for remuneration deduction
LLP	ITR-5	File with ROC - Form 8 and Form 11 annually
AOP / BOI	ITR-5	Taxed at maximum marginal rate if member's rate is higher
Individual / HUF with Business	ITR-3 or ITR-4	NOT ITR-5 - different forms for individuals
Private / Public Company	ITR-6	Companies use ITR-6, not ITR-5
Charitable Trust / NGO	ITR-7	Trusts with Sec 12AB registration use ITR-7

04

Documents Required for ITR-5 Filing

Document / Record	What It Is & Why It Is Needed
PAN of Firm / LLP / Entity	Mandatory identity. PAN must be in entity's name - not partner's PAN.
Partnership Deed / LLP Agreement	Core legal document. Must be registered u/s 184 (Firms) or filed with ROC (LLPs) for deductions.
PAN of All Partners / Members	PAN of every partner including sleeping/dormant partners. Mandatory disclosure in ITR-5.
Profit & Loss Account	Complete income and expenditure for the year. Must reconcile with GST turnover (GSTR-1).
Balance Sheet as on 31 March	All assets and liabilities. IT Act WDV for fixed assets - not Companies Act depreciation.
All Bank Account Statements	Every bank account of the entity for the financial year. Closing balance must match books.
GST Returns (GSTR-1, 3B, 9)	Reconcile IT turnover with GST turnover. Differences must be documented and explainable.
Form 26AS of Entity	Login with firm's PAN. Verify TDS from clients (194J/194C) and advance tax paid by firm.
Tax Audit Form 3CB & 3CD	Mandatory if applicable based on prescribed tax-audit limits. Filed by CA before ITR.
Advance Tax Challans (Challan 280)	All quarterly payments in firm's PAN. Verify they appear in Form 26AS Part C.

05

Partner Remuneration & Interest - Key Tax Rules

Partner Remuneration - Sec 40(b)

Deductible

Deductible ONLY if specified in the registered partnership deed. Working partners only - sleeping partners NOT eligible.

Limit: 90% of Book Profit (first Rs.6L) + 60% of balance. If Book Profit is negative - max Rs.3L allowed.

Interest on Partner's Capital - Sec 40(b)

Deductible (Limited)

Deductible at maximum 12% per annum on opening capital balance. Must be stated in the deed.

Note: Excess interest paid beyond 12% p.a. is DISALLOWED and added back in tax computation.

Partner's Share of Profit - Sec 10(2A)

Exempt from Tax

A partner's share of the firm's profit is EXEMPT from tax in the partner's individual ITR.

Note: Tax is paid by the firm at the applicable firm rate. Partner does not pay tax again on exempt profit share.

TDS on Remuneration to Partners

Taxable in Partner's Hands

Remuneration paid by firm to partners is taxable in partner's hands as business income - NOT as salary.

TDS Deducted: Firm deducts TDS u/s 194 @10% if remuneration to any partner exceeds Rs.30,000 per year.

06

How the ITR-5 Filing Process Works - 4 Steps

Step 1

Consultation & Document Collection

We understand the firm's structure - partners, PSR, nature of business. Collect partnership deed, P&L, balance sheet, GST returns, bank statements, TDS certificates and Form 26AS of the entity.

Duration: 1-2 days

Step 2

Review, Computation & Sec 40(b) Working

Our experts verify financials, compute IT Act depreciation, verify partner remuneration within 40(b) limits, check MSME dues, cash payment disallowances, and compute net taxable income of the firm.

Duration: 1-2 days

Step 3

Filing & Submission

We file ITR-5 securely on the official Income Tax e-Filing portal using the firm's PAN and authorized signatory's DSC or EVC. Audit report, if applicable, must be uploaded before ITR submission.

Duration: Same day once ready

Step 4

Verification & Ongoing Support

Guide verification through DSC or permitted EVC method. Assist with refund tracking, advance-tax planning, TDS returns, and responses to Income Tax Department notices.

Duration: 1-3 days

07

ITR-5 Filing Due Dates & Deadlines

Taxpayer Category	Due Date	Notes
Firm / LLP / AOP / BOI - Non-Audit Cases	31st August	Extended deadline effective for business income filers
Firms / LLPs - Audit Required (Turnover > Rs.1 Cr)	31st October	Tax Audit Report (3CB/3CD) must be filed before ITR
Transfer Pricing Cases	30th November	International transactions or specified domestic transactions
Belated Returns (Sec. 139(4))	31st December	Late filing - penalties and loss carry-forward restrictions apply
Revised Returns (Sec. 139(5))	31st March	Correct errors - extended deadline, no additional penalty

08

Penalties for Late ITR-5 Filing

Income <= Rs 5 Lakh

late fee (Sec. 234F)

Rs 1,000

Income > Rs 5 Lakh

late fee (Sec. 234F)

Rs 5,000

Delayed tax payment

interest on outstanding tax (Sec. 234A)

1% per month

Delayed advance tax

under Sec. 234B / 234C

Interest

Non-filing of Tax Audit

whichever lower (Sec. 271B)

0.5% of turnover or Rs 1.5L

Loss of carry-forward

Business losses may lose carry-forward eligibility when the return is not filed within the applicable due date, subject to the Income-tax Act.

Late filing risk

09

Tax Rate for Firms & LLPs

Tax Component	Rate	Important Note
Income Tax (Flat Rate)	30% on Total Income	No slab benefit. Flat 30% from the first rupee of taxable income.
Surcharge	12% of tax	Applicable if total income exceeds the applicable threshold.
Health & Education Cess	4% of (Tax + Surcharge)	Applied on total tax including surcharge.
Effective Rate (income > 1Cr)	34.944%	30% + 12% surcharge + 4% cess
Rebate u/s 87A	NOT available	87A rebate is only for eligible individuals. Firms cannot claim.
New Tax Regime u/s 115BAC	NOT applicable	New regime is only for individuals/HUF. Firms always taxed at 30%.

10

Why Filing ITR-5 on Time Benefits Your Firm

Compliance Assurance

Timely ITR-5 keeps the firm legally compliant, avoids penalties, and maintains a clean financial track record.

Carry Forward of Business Losses

Filing within the applicable due date helps preserve eligibility to carry forward eligible business losses and unabsorbed depreciation according to law.

Partner Benefits Flow-Through

Correct filing enables partners to correctly report exempt profit share and taxable remuneration in their individual ITRs.

Bank Loans & Working Capital

Filed ITRs are commonly required by banks for CC/OD limits, term loans, and business-credit assessment.

GST & TDS Reconciliation

ITR preparation helps reconcile GST turnover, TDS credits, books and tax information.

11

Common ITR-5 Filing Mistakes to Avoid

Unregistered / Incorrect Partnership Deed Compliance

Improper deed documentation can affect deductions such as partner remuneration / interest.

Partner Remuneration Exceeds 40(b) Limits

Excess remuneration may be disallowed. Compute the allowable limit before claiming.

GST & IT Turnover Mismatch

Differences between GST returns and income-tax reporting should be reconciled and documented.

Ignoring MSME Dues - Sec 43B(h)

Review applicable outstanding dues to eligible MSME suppliers and the statutory payment timelines.

Cash Payments Above Prescribed Limits - Sec 40A(3)

Review cash payments against the applicable limit and statutory exceptions.

Filing Late - Loss of Carry Forward

Late filing can affect carry-forward eligibility for certain losses.

12

Annual Compliance Calendar for Firms & LLPs

Frequency	Compliance	Due Date / Deadline
Monthly	TDS Deposit (TDS deducted in previous month)	By 7th of each month (30 April for March TDS)
Monthly	GSTR-3B Filing + GST Payment (monthly filer)	By 20th of each month
Monthly	GSTR-1 Filing (monthly filer)	By 11th of each month
Quarterly	TDS Returns (Form 26Q / 24Q)	31 Jul / 31 Oct / 31 Jan / 31 May
Quarterly	Advance Tax Payments	15 Jun / 15 Sep / 15 Dec / 15 Mar
Annual	Tax Audit Report (Form 3CB / 3CD), if applicable	30 September (if audit required)
Annual	ITR-5 Filing - Non-Audit Cases	31 August
Annual	ITR-5 Filing - Audit Cases	31 October
Annual	GSTR-9 Annual Return, if applicable	31 December
Annual (LLP)	LLP Annual Return (Form 11)	30 May each year (within 60 days of FY end)
Annual (LLP)	LLP Statement of Accounts (Form 8)	30 October each year

13

What to Do After Filing ITR-5

01

Verify ITR immediately via DSC or net banking EVC. An unverified return is not treated as valid.

02

Track refund status on the e-Filing portal using the firm's PAN login if tax credits exceed liability.

03

Save a copy of the filed ITR-5 PDF and ITR-V / acknowledgement - required for bank loan applications and next year's filing.

04

Begin advance tax planning for first instalment due 15 June.

05

File revised return (Sec. 139(5)) if any error is discovered - allowed until 31 March.

ITR-5 QUICK CHECKLIST

PAN of Firm / Entity Partnership Deed / LLP Agreement PAN of All Partners / Members P&L Account Balance Sheet All Bank Statements GST Returns Form 26AS AIS Tax Audit Form 3CB / 3CD Advance Tax Challans TDS Certificates Fixed Asset Register Partner capital / remuneration details

14

ITR-5 - Document & Information Checklist

Who files: Partnership Firm / LLP / AOP / BOI / AJP / Estate of Deceased / Business Trust / Investment Fund

#	Document / Information Required	Details / What to Check	Mandatory?	Source
A. ENTITY IDENTIFICATION
1	PAN of the Entity	Firm / LLP / AOP / BOI PAN	Yes	IT Dept
2	Name of the Entity	Exact name as per PAN / registration	Yes	PAN / Deed
3	Date of Formation	As per deed / certificate of incorporation	Yes	Partnership deed / MCA
4	Nature of Business / Profession Code	IT Dept prescribed codes	Yes	IT Dept list
5	Registered Office Address	Current address for communication	Yes	Deed / GST registration
6	Designated Partner / Authorized Signatory PAN	PAN of person signing the return	Yes	PAN card
B. PARTNER / MEMBER DETAILS
7	Names & PAN of all Partners / Members	All partners including sleeping partners	Yes	Partnership deed / LLP deed
8	Profit Sharing Ratio	As per deed	Yes	Partnership deed
9	Capital Contribution of each Partner	Opening + closing balance in capital account	Yes	Books of account
10	Remuneration / Salary to Partners	Allowable u/s 40(b) - within prescribed limits	If paid	Books / Deed
11	Interest on Capital to Partners	Allowable u/s 40(b) - max 12% p.a.	If paid	Books / Deed
12	Drawings by Partners	Amount withdrawn during FY	Yes	Books of account
C. BOOKS OF ACCOUNT & FINANCIALS
13	Profit & Loss Account (FY25-26)	Income, expenses, net profit	Yes	Tally / Books
14	Balance Sheet as on 31 March 2026	Assets, liabilities, capital accounts	Yes	Tally / Books
15	Trading Account (if trading entity)	Opening stock, purchases, sales, closing stock	If trading	Books
16	Schedules to Financial Statements	Detailed schedules for major items	Yes	Books
17	Tax Audit Report - Form 3CA / 3CB & 3CD	If turnover > Rs1 Cr (business) / Rs50L (profession)	If applicable	CA certificate
18	GST Returns Reconciliation	Reconcile GSTR-1 / 3B / 9 with books	Yes	GST portal
D. INCOME DETAILS
19	Business / Professional Income	Net profit as per books after allowable deductions	Yes	P&L account
20	House Property Income	Rental income from properties owned by firm	If applicable	Rent receipts / deed
21	Capital Gains	Sale of firm assets, investments	If applicable	Sale documents
22	Other Sources	Interest income, dividends, etc.	If applicable	Bank statements / AIS
E. DEPRECIATION & ASSETS
23	Fixed Asset Register	Block-wise depreciation as per IT Act	Yes	Books of account
24	WDV of each asset block as on 1 Apr 2025	Opening WDV	Yes	Last year ITR / Books
25	New Assets Added - date & cost	Date of addition and put-to-use date	If applicable	Purchase invoice
26	Assets Sold / Discarded	For Short-term capital gain on depreciable assets	If applicable	Sale documents
F. DEDUCTIONS & EXEMPTIONS
27	Sec 80G - Donations	With Form 10BE	If claiming	Form 10BE + receipt
28	Sec 80IC / 80IE	If unit in special category state	If applicable	CA certificate
29	MAT (if AOP assessed like company)	Minimum Alternate Tax computation	If applicable	CA computation
G. TAX PAID DETAILS
30	Form 26AS	TDS / TCS / Advance Tax - entity-level	Yes	TRACES / IT portal
31	AIS of Entity	Cross verify all income reported	Yes	IT portal
32	Advance Tax Challans	Paid in the name of firm	If paid	Bank / IT portal
33	Self Assessment Tax Challan	Balance tax before filing	If applicable	Bank / IT portal
34	TDS Certificates (Form 16A)	TDS on rent, commission, professional fees, etc.	If applicable	TRACES / Deductor

Keep all documents ready before starting filing. For ITR-1, ITR-2, ITR-3, ITR-4 and other forms, separate detailed checklists are available.

ITR-5 - Partnership Firms, LLPs & Other Entities