Last updated: September 11th, 2024 6:19 PM

Which ITR should a company file?

In India, all companies, irrespective of profit or loss, are expected to file ITR returns. Companies that are dormant and have undertaken no business decisions in a year are still expected to file returns. The applicability of ITR forms varies depending on the taxpayer's income sources, the amount of the income earned, and the category of the taxpayer, like individuals, HUF, companies, etc. In this article, we will examine which ITR a company should file. Get in touch with IndiaFilings to file your Company tax return filing.

Income Tax Return (ITR)

An income Tax Return (ITR) is a form in which the taxpayers file information about their income earned and tax applicable to the income tax department. To date, the department has notified seven forms, i.e., ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 & ITR-7. Every taxpayer should file his ITR on or before the specified due date.

Which ITR should a company file?

The type of ITR (Income Tax Return) a company should file depends on the type of company it is.

• Form ITR-4 – This ITR can be used to File ITR for those firms other than LLPs, which have a total income of up to ₹50 lakhs, and that income is calculated under Sections 44AD, 44ADA, 44AE
• Form ITR-5 - This ITR can be used for filing ITR for LLPs and partnerships, not ITR 7.
• File ITR-6 - Those companies not claiming exemption under Section 11 can use ITR-6 to file an Income tax return.
• File ITR-7 – This can be used for those companies that are mandated to file returns from Sections 139(4A), 139(4B), 139(4C), and 139(4D) only.

Latest Update on the Pay Later Option for Income Tax Filing

The Income Tax e-filing portal has recently rolled out a 'Pay Later' option, allowing you to complete your tax filing process before making any tax payments. You can pay taxes after you are done filing. For additional information, please refer to our guide – Pay later option for the Income tax return filing.

ITR 4 Form (Sugam) - For firms other than LLPs

ITR-4 return filing is a form for ITR filing which should be used by assessees having a business income. Only assesses who have opted for a presumptive taxation scheme should use Form ITR 4.

Applicability

Form ITR 4 (Sugam) should be filed when the following conditions are satisfied:

• The assessee falls under either one of the following categories:
  • Individual,
  • Hindu Undivided Family(HUF), or
  • Partnership firm which is not a Limited Liability Partnership (LLP)
• The assessee is considered an ordinary resident per Section 6(6) of the Income Tax Act.
• The assessee obtains income under the heading Profits and Gains of Business or Profession as mentioned in Section 28 of the Income Tax Act.
• The assessee has opted for a presumptive taxation scheme under Sections 44AD, 44ADA or 44AE
• The assessee's taxable income is calculated in the manner provided in Sections 44AD, 44ADA, or 44AE.
• The assessee is covered by the requirement to file Form 3CA or 3CB and also Form 3CD as per Rule 6G

ITR Form 4 is attached here for reference:

ITR-5 – for LLPs and partnerships

This tax return form is the ITR-5 return filing for firms, Limited Liability Partnership, Associations of Persons, Body of Individuals, Artificial Juridical Person, Estate of deceased, Estates of insolvent, Business trusts, and investment funds.

ITR-6 - For companies that are not claiming exemption under Section 11

ITR -6 is a form used for filing income tax returns by companies other than companies claiming exemption under section 11 of the Income Tax Act, 1961. ITR-6 applies to the following entities:

• Companies, including Person Companies (OPCs)
• Limited Liability Partnerships (LLPs)

ITR-7 – For Companies

ITR-7 (Income Tax Return 7) is a form used for filing income tax returns by persons, including companies, who are required to furnish returns under section 139(4A) or section 139(4B), or section 139(4C), or section 139(4D) of the Income Tax Act, 1961. ITR-7 applies to the following entities:

• Companies not falling under any other category of ITR forms
• Firms
• Trusts

Details required in an ITR form

The details required in an ITR form vary based on the type of ITR form. However, in general, the following information is required:

• Personal details: Name, permanent account numbers (PAN), address, date of birth, and other personal details.
• Details of income: Information about the taxpayer's income from salary, business or profession, capital gains, and other sources.
• Details of deductions and exemptions: Information about deductions claimed under various sections of the Income Tax Act, 1961, and exemptions claimed for investments in specified savings instruments.
• Details of tax payments: Information about taxes paid, including advance tax, self-assessment tax, and TDS (tax deducted at source).
• Details of foreign assets and income: If applicable, information about foreign assets and income.
• Signature and verification: The Formtaxpayer or authorized signatory must sign and verify the form.

It is essential to provide accurate information in the ITR form to avoid penalties and legal consequences for filing false tax returns.