ITR 5 Form – FY 2020-21 / AY 2021-22

ITR 5 Form – FY 2020-21 / AY 2021-22

This Income Tax return is meant for firms, LLPs, AOPs (Association of persons) and BOI’s (Body of Individuals), Artificial Juridical Person (AJP), Estate of Deceased, Estate of Insolvent, Business Trust, and Investment Fund.

Assessment Year for ITR Form FY 2020-21

This Return Form is applicable for assessment year 2021‐22only, i.e., it relates to income earned in Financial Year 2020‐21.

Who is Eligible to File ITR 5 Form for FY 2020-21/ AY 2021-22?

• This form can be used by a person being a firm, Limited Liability Partnership (LLP), Association of Persons (AOP), Body of Individuals (BOI), Artificial Juridical Person (AJP) referred to in clause (vii) of section 2(31), the local authority referred to in clause (vi) of section 2(31), representative assessee referred to in section 160(1)(iii) or (iv), Primary Agricultural Credit Society, Co‐operative Bank other than a primary agricultural credit society or a primary cooperative agricultural and rural development bank, Primary Cooperative Agricultural and Rural Development Bank, any other cooperative society, a society registered under Societies Registration Act, 1860 or under any other law of any State, trust other than trusts eligible to file Form ITR‐7, the estate of a deceased person, the estate of an insolvent, business trust referred to in section 139(4E), investments fund referred to in section 139(4F) and Any other AOP /BOI. However, a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4D) shall not use this form.

Fundamental changes (as compared to ITR for AY 2020‐21)

• Option to avail benefit u/s 115BAD is provided in ITRs, after filing Form 10IF, for Cooperative societies being:
  • Primary Agricultural Credit Society: Primary Co‐operative Agricultural and Rural Development bank.
  • Co‐operative Bank other than “a primary agricultural credit society” or “a primary cooperative agricultural and rural development bank.”
  • Other Cooperative Society
• For cooperative societies opting under 115BAD, the tax will be charged at 22%, and the surcharge will be charged at 10% from Rs.1/‐ onwards. Also, such assessee’s are not eligible for certain deductions and allowances as mentioned below:
  • Exemption u/s 10AA
  • Additional depreciation under clause (iia) of sub‐section (1) of section 32
  • Deduction u/s 32AD / 33AB /
• Option of Filing ITR in response to notice u/s 153A and 153C is removed from ITR as a requirement to file ITR under these sections is omitted.
• In AY 2020‐21, the threshold limit for a person carrying on business was increased from one crore rupees to five crore rupees in cases where the cash receipts or payments by a company don’t exceed 5% of such permits or such fees; however, in AY 2021‐22, the limit of five crore rupees is increased to ten crore rupees.
• The existing restriction of 17 codes like business/profession schedule is removed.
• Loss (negative value) under “No books of account” at sl.no.65 in Sch P&L is restricted.
• In schedule, BP, Income/ receipts credited to profit and loss account considered under the head “other sources” has been bifurcated into two parts as o “Dividend income” and o “Other than dividend income.”
• All the fields related to 115B – Income Life insurance Business, i.e., o sl.no.4b, Sl.No. Table E “Computation of income from life insurance business referred to in section 115B ” of Schedule BP, have been removed. And the corresponding mapping has been updated in Part B‐TI.
• Section 44BBB is removed from Sl.no.4a and sl.no.36 of Schedule BP
• In Schedule DPM, the column “3a. Amount as adjusted on account of opting for taxation section 115BAD” and “3b. Adjusted Written down value on the first day of the previous year (3) + (3a)” has been added. Hence corresponding mapping changes are made in the schedule DPM
• CBDT vide notification dated September 20, 2019, increased depreciation to 45% on motor cars, motor buses, etc. writ assets purchased on or after the 23rd day of August 2019 but before the 1st day of April 2020 and is put to use before the 1st day of April 2020. Therefore, no additions will be allowed in the 45% block from the AY 2021‐22 w.r.t to such assets.
• In Schedule CG, the allowable difference between the total value of consideration u/s. 50 C and value of the property as per stamp authority has been increased from 1.05 times to 1.10 times
• In Schedule CFL, the bifurcation of PTI loss and other than PTI loss has been removed from “HP loss,” “Short term capital loss” and “Long term capital Loss” also corresponding changes mapping /other changes are made in field “Loss distributed among the unit holders.”
• In Schedule CFL, the column “5b. Amount as adjusted on account of opting for taxation under section 115BAD” and “5c. Brought forward Business loss available for set off during the year” has been added. Hence corresponding mapping changes are made in schedule CFL
• In Schedule CFL, fields “Current year loss distributed among the unitholder (Applicable for Investment fund only)” have been added, and corresponding changes are done in CFL. Also, the field “Loss distributed among the unit holder (Applicable for Investment Fund only)” is deleted as it has no relevance.
• In Schedule UD, the “Amount as adjusted on account of opting for taxation under section 115BAD” field has been added as an adjustment for 115BAD, and so only balance loss can be set off against income in schedule BFLA.
• In Schedule 80GGA, w.e.f. 01.06.2020, the eligible limit of donation in cash is changed from Rs. 10,000 to Rs. 2,000. Hence date field is inserted to capture the date of donation in cash
• In schedule 80IB, the deductions claimed in the following sections are removed due to the sunset clause, and corresponding mapping changes are made in schedule VI‐A.
• In Schedule EI, the field for “Dividend Income” is removed from exempt income as for AY 2021‐22 onwards; dividend income will be taxable in the hands of shareholders. similarly, corresponding Changes are also made in schedule OS, schedule Pass-Through Income (PTI) to remove reference of section 115O
• In schedule TPSA, dropdown for the financial year (FY 2019‐20 or FY 2020‐21) for which option u/s 92CE(2A) is exercised in AY 2021‐22 is inserted.
• Schedule DI (Details of Investment) has been removed as it was relevant only for AY 20‐21
• In Schedule Part B TI “Sl. No.11b” Part C deductions claimed under chapter VI‐A, restriction of ii5 of BFLA is removed due to deduction claimed u/s 80P
• Now, the assessee needs to disclose the surcharge before “Marginal Relief” and after “Marginal relief” in Schedule Part BTTI.
• In Schedule TDS, earlier TDS credit is allowed only if corresponding income is offered for tax this year; however, an exception is being added for TDS u/s 194N. Also, the label is amended to include form 16D for the claim of TDS
• Annexure 2 is inserted in instructions wrt ITR fields which should be tallied with the corresponding amount mentioned in Tax Audit report, i.e., Form 3CA‐3CD/3CB‐3CD, if applicable.
• The upload level validations table is modified wrt mapping changes and new rules.

What is the period covered during FY 2020-21 / AY 20201-22?

FY 2020-21 is the financial year 2020-21 starting from April 1, 2020, ending on March 31, 2021. AY 2021-22 is the assessment year 2021-22, relevant to the financial year 2020-21 (also called the previous year 2020-21).

Who should not file ITR-4-SAHAJ?

• An individual who has to file income tax returns under the Section 139 (4A) or 139 (4D) cannot file ITR 5 Form.

Who should mandatorily file Income Tax returns?

• This form can be used as a firm, LLPs, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), the estate of deceased, the estate of insolvent, business trust and investment fund, cooperative society, and local authority. However, a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) shall not use this form.

FAQ’S

Is it mandatory to send ITR V?

Yes, ITR-V should be sent to CPC within 120 days of filing your income tax return.

What if ITR-V is rejected?

It means that it will be considered as that the taxpayer has not yet filed their return. In such a case, the taxpayer will have to file an amended return, get a new ITR-V, and present the same within 120 days.

Is a Balance Sheet mandatory in ITR 5 filing?

The reported figures of the balance sheet should match with the audited balance sheet in case the accounts were required to be audited. Any other activity not being accounted in the books of accounts of business or profession need not be included in this balance sheet.