Income Tax return for FY 2019-20 were announced, however till date only ITR 1, 2, 3 and 4 were available for filing. Now ITR 5 is also available for filing on e filing website.
So, let’s have a look on what are some important amendments in ITR 5 and who are eligible to file the same.
First of all ITR 5 is the biggest and exhaustive return as far as partnership firm is concerned. Any type of income can be shown in ITR 5 barring the fact that it is the only income tax return available for LLP as they are not eligible for ITR 4.
Let’s first see who are eligible to file ITR 5 Form:
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), local authority referred to in clause (vi) of section 2(31), representative assessee referred to in section 160(1)(iii) or (iv), cooperative society, 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, estate of deceased person, estate of an insolvent, business trust referred to in section 139(4E) and investments fund referred to in section 139(4F). 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.
It is also to be noted that firm needs to file its return every year whether or not it earns any income.
Below are the major amendments in ITR 5:
1. Schedule DI:
As we know due date for investment under 80C to 80U and 54 to 54G was extended to 30.06.2020 and many of us were confused on how it would be shown in ITR and how would they know that amount paid after 01.04.2020 belongs to FY 2019-20 or 2020-21.
Now CBDT has inserted a new schedule, Schedule DI wherein a person need to mention that out of total deduction how much belongs to April, 2020 to July, 2020 period.
Therefore, still it is self declaration and we still dont know how will it be known if a person is taking the same deduction twice and for that we need to wait for next year’s ITR.
2. Increase in Audit limit:
In Budget 2020, there was an amendment in section 44AB according to which audit limit of Rs. 1 crore would be enhanced to 5 crore if cash receipts and cash payment is less than 5% of total receipt and total payment respectively.
Also, many people were confused whether the new audit limit would apply for FY 2019-20 or FY 2020-21 and the release of ITR has removed this doubt and the new limit would be applicable for FY 2019-20.
However still complete definition of receipt and payment has not been provided by CBDT used in this provision.
In this regard they have made introduced 2 changes in ITR Form which are again self declaration:
(a2i) If No , Whether during the year Total sales/turnover/gross receipts of business exceeds Rs. 1 crores but does not exceed Rs. 5 crores?
(a2ii) If Yes is selected at a2i, whether aggregate of all amounts received including amount received for sales, turnover or gross receipts or on capital account like capital contributions, loans etc. during the previous year, in cash, does not exceed five per cent of said amount?
(a2iii) If Yes is selected at a2i, whether aggregate of all payments made including amount incurred for expenditure or on capital account such as asset acquisition, repayment of loans etc., in cash, during the previous year does not exceed five per cent of the said payment?
Even though the above information doesn’t provide information it gives a hint that receipt and payment would include all revenue and capital receipt and payment.
This are the two major amendments in ITR 5 other than these everything is the same as previous year.
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