ITR-5 AY 2026-27: Understand Structure of ITR 5, Who can File, How to File, and Due Date
- CA Pratik Bharda
- May 14, 2025
- 12 min read
Updated: 7 days ago
ITR-5 is the income tax return form used by LLPs, partnership firms, AOPs, BOIs, cooperative societies, and several other non-individual entities to report income, deductions, taxes, and compliance details under the Income Tax Act. The form is detailed because it captures business income, GST disclosures, audit information, capital gains, foreign assets, deductions, and tax liability in a structured manner.
For AY 2026-27, ITR-5 has become more compliance-focused with additional disclosures relating to MSME payments under Section 43B(h), Legal Entity Identifier (LEI), startup deductions, GST reconciliation, and foreign tax credits. Entities filing income tax return must carefully reconcile books of accounts, GST returns, TDS credits, and audit reports before submission.
Table of Contents
What is ITR-5?
ITR-5 is an income tax return form prescribed for entities that are neither individuals nor companies and are not required to file ITR-7. The form is primarily used by business entities and organizations that maintain structured books of accounts and need to report income from business activities, investments, property, or other taxable sources.
The return includes disclosures relating to:
Profit and loss account
Balance sheet
Capital gains
GST turnover
Tax deductions
Partner or member details
Foreign assets and income
Audit information
Tax payments and refunds
Compared to simpler ITR forms, ITR-5 contains multiple schedules and validation checks, making accurate reporting important for smooth processing.
Who Should File ITR-5?
ITR-5 applies to several categories of non-individual taxpayers. LLPs and partnership firms are among the most common entities using this form. Apart from them, cooperative societies, AOPs, BOIs, local authorities, investment funds, estates of deceased persons, business trusts, and representative assessees may also file ITR-5 where applicable.
Registered societies and certain trusts that are not eligible to file ITR-7 may also use this form depending on their tax status and activities.
Who Cannot File ITR-5?
Individuals, HUFs, and companies cannot use ITR-5. Charitable or religious institutions claiming exemption under Sections 11 or 12 and entities filing returns under Sections 139(4A), 139(4B), 139(4C), or 139(4D) are generally required to file ITR-7 instead.
Using the wrong return form can lead to a defective return notice under Section 139(9), which may ultimately make the filing invalid if not corrected within the prescribed time.
Major Changes in ITR-5 for AY 2026-27
Taxpayers filing returns through the offline or JSON utility will now notice stronger in-built validation checks. These updates are intended to reduce filing mistakes and improve accuracy before submission.
Businesses covered under Section 43B(h) must provide more detailed disclosures regarding payments made to Micro and Small Enterprises (MSMEs), particularly focusing on payment timelines and compliance reporting.
The Income Tax Department has also revised business and profession codes as per the NIC 2008 classification system, bringing better alignment with GST, MCA, and other statutory records.
Start-ups claiming deductions under Section 80-IAC are now required to furnish additional declaration details, including registration and recognition IDs while filing the return.
Capital gains disclosures under Schedule CG have become more detailed, especially for non-residents and transactions involving specified securities, increasing the level of transaction-wise reporting required.
A dedicated dropdown for “Return Filed under Section” has now been added in the return forms. This helps taxpayers clearly identify whether the return is being filed under Section 139(1), 139(4), or any other applicable provision, with system-driven validation based on filing dates.
Foreign tax credit reporting requirements have also been tightened. Taxpayers claiming relief under Schedule TR and Schedule FA will now need to provide more comprehensive disclosures in line with Rule 128 requirements.
Significant changes have been introduced in Schedule Part A–OI and Audit, where businesses may now need to disclose changes in accounting policies, valuation methods, and turnover reconciliation between GST and Income Tax records in greater detail.
Schedule 80GGA now contains separate reporting fields for contributions made towards scientific research, universities, research institutions, and rural development programmes instead of consolidated disclosures.
Another key addition is the requirement to disclose the Legal Entity Identifier (LEI) for entities undertaking financial transactions of ₹50 crore or more during the financial year.
Structure of ITR-5 for AY 2026-2027
The ITR-5 form has been designed in a detailed manner to capture financial statements, income disclosures, deductions, tax computations, and compliance-related information for eligible entities such as partnership firms, Limited Liability Partnerships (LLPs), Association of Persons (AOPs), Body of Individuals (BOIs), and similar taxpayers.
The form is broadly divided into Part A, Part B, and multiple schedules.
Part A mainly covers the financial and general details of the taxpayer. It includes:
Part A – General Information
Part A-BS – Balance Sheet as on 31st March 2026
Part A-Manufacturing Account for Financial Year (FY) 2025-26
Part A-Trading Account for FY 2025-26
Part A-P&L – Profit and Loss Account for FY 2025-26
Part A-OI – Other Information
Part A-QD – Quantitative Details
Part B contains the final computation of taxable income and tax liability.
The form further contains around 40 schedules that are used for reporting different categories of income, deductions, losses, foreign assets, tax reliefs, depreciation, and statutory disclosures.
Some of the major schedules included in ITR-5 are:
Schedule HP – Computation of income under the head House Property
Schedule BP – Computation of income from Business or Profession
Schedule DPM – Depreciation on Plant and Machinery
Schedule DOA – Depreciation on Other Assets
Schedule DEP – Summary of Depreciation on all assets
Schedule DCG – Deemed Capital Gains on sale of depreciable assets
Schedule ESR – Expenditure on Scientific Research eligible under Section 35
Schedule CG – Capital Gains computation
Schedule 112A – Reporting of sale of listed equity shares, equity-oriented mutual funds, or business trust units covered under Section 112A where Securities Transaction Tax (STT) has been paid
Separate Schedule 112A reporting is also required for Non-Residents in specified cases
Schedule VDA – Income from transfer of Virtual Digital Assets
The form also contains schedules for reporting income adjustments and loss set-off details, including:
Schedule OS – Income from Other Sources
Schedule CYLA – Current Year Loss Adjustment
Schedule BFLA – Brought Forward Loss Adjustment
Schedule CFL – Carried Forward Losses
Schedule UD – Unabsorbed Depreciation
Several schedules are dedicated to deductions and tax incentives available under different sections of the Income-tax Act:
Schedule 10AA – Deduction for Special Economic Zone (SEZ) units
Schedule 80G – Donations eligible for deduction
Schedule 80GGA – Donations for scientific research or rural development
Schedule 80GGC – Contributions made to political parties
Schedule 80IAC – Deduction for eligible start-ups
Schedule 80LA – Deduction for Offshore Banking Units and International Financial Services Centre (IFSC) units
Schedule RA – Donations to research associations and similar institutions
Schedule 80IA – Deduction for infrastructure undertakings
Schedule 80IB – Deduction for specified industrial undertakings
Schedule 80IC/80IE – Deduction for eligible businesses in specified regions
Schedule 80P – Deductions available to co-operative societies
Schedule VIA – Summary of deductions under Chapter VIA
The form also seeks disclosures relating to Alternate Minimum Tax (AMT), exempt income, partnership interests, and pass-through income through the following schedules:
Schedule AMT – Alternate Minimum Tax computation under Section 115JC
Schedule AMTC – Alternate Minimum Tax Credit under Section 115JD
Schedule SI – Income taxable at Special Rates
Schedule IF – Information regarding partnership firms in which the taxpayer is a partner
Schedule EI – Exempt Income not included in total income
Schedule PTI – Pass Through Income from business trusts or investment funds under Sections 115UA and 115UB
Schedule TPSA – Transfer Pricing Secondary Adjustment under Section 92CE(2A)
Schedule 115TD – Accreted Income reporting
For taxpayers having overseas income, foreign assets, or claiming foreign tax relief, the following schedules become relevant:
Schedule FSI – Foreign Source Income
Schedule TR – Tax Relief claimed for taxes paid outside India
Schedule FA – Foreign Assets and foreign income disclosures
In addition, Schedule GST captures turnover or gross receipts reported under the Goods and Services Tax (GST) regime for reconciliation with Income Tax records.
The final computation sections of the return are:
Part B-TI – Computation of Total Income
Part B-TTI – Computation of Total Tax Liability
The form also includes separate reporting sections for:
Advance Tax and Self-Assessment Tax payments
Tax Deducted at Source (TDS) details from Forms 16A, 16B, and 16C
Tax Collected at Source (TCS) details
For smooth and accurate filing, the Income Tax Department recommends following the filing sequence below:
Complete Part A
Fill all applicable schedules
Complete Part B
Finish the verification section
Documents Required for Filing ITR-5
Before filing the return, entities should maintain:
PAN details
Financial statements
GST returns
Tax audit report
TDS certificates
Bank account details
Investment and capital gain records
Foreign income disclosures where applicable
Physical annexures are not attached with ITR-5, but supporting records should be retained for future verification.
Step-by-Step Process to File ITR-5
Step 1: Collect Financial and Tax Documents
Keep ready:
Balance sheet
Profit and loss account
GST returns
Audit report
TDS certificates
Bank statements
Capital gain statements
Step 2: Access the Income Tax Portal
Visit the official portal:
Select AY 2026-27 and choose ITR-5.
Step 3: Fill General Information
Enter:
PAN
Address
Nature of business
Filing section
Audit details
Step 4: Report Income Under Relevant Schedules
Complete schedules relating to:
Business income
Capital gains
Other sources
Deductions
GST turnover
Foreign assets where applicable
Step 5: Compute Tax Liability
Validate:
TDS credits
Advance tax
Self-assessment tax
Interest liability
Refund
Step 6: Validate and Upload Return
After validation, upload the return using DSC or EVC, depending on applicability.
Step 7: Complete Verification
Where DSC is not mandatory, complete e-verification within the prescribed timeline.
Reporting of Virtual Digital Assets
Entities earning income from cryptocurrencies, NFTs, or other digital assets must report the details in Schedule VDA.
The disclosure generally includes:
Date of acquisition
Date of transfer
Sale value
Cost of acquisition
Taxable gains
Income from VDAs is generally taxed at 30% under Section 115BBH without allowing most expense deductions.
Foreign Asset and Foreign Tax Credit Reporting
Entities holding foreign assets or earning foreign income must disclose details under the relevant schedules.
Taxpayers claiming foreign tax credit are generally required to:
File Form 67
Provide tax payment proof
Report country-wise income and taxes paid
Incorrect or delayed reporting may result in denial of foreign tax credit claims.
Common Mistakes to Avoid While Filing ITR-5
Many notices arise because of avoidable reporting errors.
Businesses often fail to reconcile turnover reported under GST with income tax disclosures. Incorrect partner details, mismatch in audit acknowledgment numbers, missing Schedule VDA disclosures, and incomplete foreign asset reporting are also common issues.
Another frequent mistake involves incorrect classification of MSME vendors, which can lead to disallowance under Section 43B(h). Taxpayers should also ensure that TDS credits match Form 26AS and AIS before filing the return.
Reviewing all schedules carefully before submission can significantly reduce compliance risks.
Conclusion
ITR-5 is a detailed return form designed for LLPs, firms, cooperative societies, AOPs, BOIs, and several other non-individual entities. The form requires careful reporting of business income, GST turnover, capital gains, MSME dues, audit details, deductions, and tax payments.
For AY 2026-27, compliance expectations have increased significantly due to enhanced disclosures relating to Section 43B(h), LEI reporting, GST reconciliation, startup deductions, and foreign tax credits. Businesses should complete reconciliations early, verify audit reports carefully, and review all schedules before submission.
Timely and accurate filing not only reduces notice risk but also helps businesses claim deductions properly, carry forward losses, and maintain smooth tax compliance.
FAQs
Q1. Who should file ITR-5?
ITR-5 is meant for non-individual entities such as LLPs, partnership firms, Association of Persons (AOPs), Body of Individuals (BOIs), cooperative societies, local authorities, business trusts, investment funds, estates of deceased persons, and representative assessees. The form is mainly used by entities that are carrying on business, professional, investment, or institutional activities and are not eligible to file ITR-7. Before selecting ITR-5, taxpayers should verify their legal structure and filing category carefully because filing the wrong return form can result in defective return notices under Section 139(9).
Q2. Can companies use ITR-5?
No. Companies cannot use ITR-5. Most companies are required to file ITR-6, while companies claiming exemption under specific provisions may be required to file ITR-7 depending on their nature and activities. ITR-5 is specifically designed for entities that are neither companies nor individuals. Businesses incorporated under the Companies Act should verify their filing applicability carefully before selecting the return form on the income tax portal.
Q3. Is DSC mandatory for filing ITR-5?
Digital Signature Certificate (DSC) is mandatory in cases where the entity is subject to tax audit under Section 44AB. LLPs and firms requiring audit generally need to file the return using DSC. In non-audit cases, electronic verification methods may be allowed depending on portal rules and verification options available. Filing with DSC improves authentication and reduces compliance issues during verification. Taxpayers should also ensure that the DSC is registered and active on the income tax portal before attempting to upload the return.
Q4. What is the due date for ITR-5 filing for AY 2026-27?
The due date for filing ITR-5 depends on whether audit or transfer pricing provisions apply. For non-audit entities, the due date is August 31, 2026. Entities requiring audit under the Income Tax Act usually have a due date of October 31. Filing after the due date can lead to late fees, interest liability, and restrictions on carrying forward certain losses. The CBDT may extend due dates through official notifications in specific situations.
Q5. What happens if ITR-5 is filed late?
Late filing of ITR-5 can result in several consequences. The entity may become liable to pay late filing fees under Section 234F along with interest under Sections 234A, 234B, and 234C wherever applicable. Businesses may also lose the ability to carry forward certain losses such as business losses and capital losses if the return is not filed within the prescribed due date. Delayed filing can also increase scrutiny exposure and may delay refund processing. Repeated non-compliance may lead to notices and further tax proceedings.
Q6. What is Schedule VDA in ITR-5?
Schedule VDA is a dedicated reporting section for Virtual Digital Assets such as cryptocurrencies, NFTs, and similar digital assets. Entities dealing in these assets must disclose acquisition details, sale consideration, transfer dates, and taxable gains in this schedule. Income from VDAs is generally taxed at 30% under Section 115BBH, and losses from such assets cannot usually be set off against other income. Proper disclosure is important because crypto-related reporting has become a major compliance focus for the Income Tax Department.
Q7. Why is MSME reporting important in ITR-5?
MSME reporting has become highly important because of Section 43B(h), which disallows deductions for delayed payments made to registered Micro and Small Enterprises. Businesses filing ITR-5 must disclose outstanding MSME dues, invoice dates, payment dates, and delayed payment amounts. If payments are not made within the prescribed timelines under the MSME Act, the expense may become disallowable while computing taxable income. Incorrect vendor classification or incomplete disclosures can increase the risk of notices, tax additions, and scrutiny.
Q8. Can LLPs claim deductions under Chapter VI-A?
Yes. LLPs and other eligible entities filing ITR-5 can claim deductions under various provisions of Chapter VI-A subject to prescribed conditions. Common deductions include Section 80G for donations, Section 80IA for infrastructure businesses, and Section 80IB for eligible industrial undertakings. Cooperative societies may also claim deductions under Section 80P where applicable. Taxpayers should maintain supporting documents and ensure that the deduction conditions are fully satisfied before claiming the benefit in the return.
Q9. Are audit reports required before filing ITR-5?
Yes. Where tax audit or other audit provisions apply, the audit report must generally be uploaded electronically before filing the income tax return. The return form requires details such as audit acknowledgment number, audit date, and auditor information. Filing the return without uploading the mandatory audit report can lead to defective return notices or non-compliance issues. Businesses should complete audit formalities well before the due date to avoid last-minute filing complications.
Q10. What documents are needed for filing ITR-5?
Entities filing ITR-5 generally require financial statements, balance sheet, profit and loss account, GST returns, TDS certificates, bank statements, audit reports, and capital gain records. Businesses holding foreign assets or earning foreign income may also require Form 67 and foreign tax documentation. Partnership firms and LLPs may need partner contribution and profit-sharing details as well. Although physical annexures are not attached with the return, taxpayers must maintain proper records in case the department seeks verification later.
Q11. Is GST reconciliation necessary while filing ITR-5?
Yes. GST reconciliation is extremely important while filing ITR-5 because turnover mismatches between GST returns, books of accounts, and income tax disclosures may trigger scrutiny notices. Businesses should reconcile sales, GST turnover, exempt supplies, and taxable receipts carefully before filing the return. Large mismatches without proper explanation can increase compliance risks. The department increasingly uses data analytics and cross-verification systems, making reconciliation an important part of accurate return filing.
Q12. Can foreign tax credit be claimed in ITR-5?
Yes. Entities earning foreign income can claim foreign tax credit in ITR-5 subject to Rule 128 compliance. Taxpayers generally need to file Form 67 and provide details of taxes paid outside India along with supporting documentation. The foreign income and taxes paid must also be disclosed in the relevant schedules such as FSI and TR. Incorrect reporting or delayed filing of Form 67 may result in denial of foreign tax credit claims. Proper DTAA evaluation may also be required in certain cases.
Q13. Is it mandatory to file ITR-5 online?
Yes. ITR-5 must be filed electronically through the income tax e-filing portal. Manual or paper filing is generally not permitted for entities required to file this form. Depending on the audit applicability and verification requirements, the return may need to be verified using DSC or electronic verification methods. The department also provides offline utilities and JSON-based filing systems to help businesses prepare and upload the return accurately.
Q14. Can losses be carried forward through ITR-5?
Yes. Eligible business losses and capital losses may generally be carried forward if the return is filed within the prescribed due date under Section 139(1). Delayed filing can restrict the carry forward of several categories of losses. Proper disclosure in the relevant schedules is important to preserve future set-off benefits. Taxpayers should also ensure that audited financial statements and computation schedules support the reported loss figures.
Q15. What are the common reasons for notices after filing ITR-5?
Income Tax Notice after filing ITR-5 commonly arises due to GST turnover mismatches, incorrect TDS claims, missing audit details, incomplete foreign asset disclosures, MSME reporting errors, or mismatch between AIS/Form 26AS and the return. Incorrect partner details and non-reporting of cryptocurrency transactions can also trigger scrutiny. Businesses should reconcile financial data carefully before filing and review all schedules thoroughly to reduce compliance risks and future notices.
Comments