Personal & Corporate Tax

What is Form ITR-7? Those companies who derive their income from properties that are for charitable or religious purposes need to fill ITR Form 7 for filing their income tax return. Properties which are held under trusts or legal obligations in parts or wholly also comes under this category. Eligibility To File Form ITR-7: Persons who are eligible for filing ITR Form 7 are as follows: • Return under section 139(4A) is required to be filed by every person whose income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes. • Return under section 139(4B) is required to be filed by a political party if the total income without giving effect to the provisions of section 139A exceeds the maximum amount which is not chargeable to income-tax. • Return under section 139(4C) is required to be filed by every o scientific research association ; o news agency ; o association or institution referred to in section 10(23A); o institution referred to in section 10(23B); o fund or institution or university or other educational institution or any hospital or other medical institution. • Return under section 139(4D) is required to be filed by every university, college or other institution, which is not required to furnish return of income or loss under any other provision of this section. • Return under section 139(4E) must be filed by every business trust which is not required to furnish return of income or loss under any other provisions of this section. • Return under section 139(4F) must be filed by any investment fund referred to in section 115UB. It is not required to furnish return of income or loss under any other provisions of this section. In-Eligibility To File Form ITR-7: Taxpayers who are not claiming exemption under Section 139 (4A), Section 139 (4B), Section 139 (4C) or Section 139 (4D) are not liable to file ITR-7 Form for Income Tax Return. Note: The followings are important to note while filing ITR-7: 1. The category of persons whose income is unconditionally exempt under various clauses of section 10, and who are not mandatorily required to furnish their return of income under the provisions of section 139, may use ITR-7 for filing return of income. An indicative list of such persons is given below:- Sl.No,         Category of persons,            Exempt under section 1                    Local authority                    Section 10(20) 2           Regimental Fund or Non-public Fund established by the Armed forces of the Union         Section 10(23AA) 3          Fund, by whatever name called, set up by the Life lnsurance Corporation (LIC) of India on or after 1st August, 1996, or by any other insurer                                         Section 10(23AAB) 4              Authority (whether known as the Khadi and Village Industries Board or by any other name)                                                     Section 10(23BB) 5             Body or Authority                             Section 10(23BBA) 6           SAARC Fund for Regional Projects set up by Colombo Declaration                           Section 10(23BBC) 7           lnsurance Regulatory and Development Authority (IRDA)                                         Section 10(23BBE) 8          Central Electricity Regulatory Commission                                                                     Section 10(23BBG) 9          Prasar Bharati                                                                                                                        Section 10(23BBH) 10        Prime Minister's National Relief Fund                                                                            Section 10(23C)(i) 11         Prime Minister's Fund (Promotion of Folk Art)                                                            Section 10(23C)(ii) 12         Prime Minister's Aid to Students Fund                                                                           Section 10(23C)(iii) 13         National Foundation for Communal Harmony                                                               Section 10(23C)(iiia) 14          Swachh Bharat Kosh                                                                                                            Section 10(23C)(iiiaa) 15          Clean Ganga Fund                                                                                                                Section 10(23C)(iiiaaa) 16           Provident fund to which the Provident Funds Act, 1925 applies                                Section 10(25)(i) 17           Recognized Provident Fund                                                                                                 Section 10(25)(ii) 18           Approved Superannuation Funds                                                                                          Section 10(25)(iii) 19           Approved Gratuity Fund                                                                                                          Section 10(25)(iv) 20           Other funds referred to in sub-clause (v) of section 10(25)                                             Section 10(25)(v) 21            Employees' State Insurance Fund                                                                                        Section 10(25A) 22           Agricultural Produce Marketing Committee                                                                    Section 10(26AAB) 23           Corporation, body, institution or association established for promoting interests of members of Scheduled Castes or ScheduIed Tribes or backward         classes Section 10(26B) 24          Corporation established for promoting interests of members of a minority community                                                                                                           Section 10(26BB) 25           Corporation established for welfare and economic upliftment of ex-servicemen                                                                                                                       Section 10(26BBB) 26           New Pension System (NPS) Trust                                                                                    Section 10(44) 2.           The Charitable Company incorporated under section 25 of Companies Act, 1956 or under section 8 of Companies Act, 2013 shall use ITR 7. PENALTY PROVISION AS PER INCOME TAX ACT1961: As per section 234F of the Income Tax Act where a person is required to mandatorily furnish a return of income under section 139, fails to do so by the due date, attracts levy of late fee under this section to the amount of Rs 5,000/-, if the return is furnished on or before the 31st day of December of the assessment year; Rs 10,000/-, in any other case: In case the total income of the taxpayer does not exceed Rs 5,00,000/- then, the late fee payable shall not exceed Rs 1,000/- in any circumstances. Section 234F was made applicable in respect of Income Tax Return filed on or after the 1st April, 2018. Annexure-less ITR Form: No document (including TDS certificate) should be attached to this ITR Form. E-filing audit reports: If the assessee is liable for Audit u/s 44AB and the accounts have been audited by an accountant, the details of such audit report along with the date of furnishing it to the department has to be filled under the head “Audit Information.” MODE TO FILE INCOME TAX RETURN: There are various ways that are outlined by the income tax department to file the ITR Form 7 for the taxpayers . They are as follows: • The taxpayer can provide return in a physical paper form. These days this method is not promoted by the department. • The assessee can provide return under digital signature. This is compulsory for all political parties. • You can provide Bar coded return. • One can send return data electronically and then submit the E-verification of the return in Return Form ITR-V. After the filing of the return , the assessee should print out two copies of ITR-V Form. One copy of ITR-V, duly signed by the assessee, has to be sent by ordinary post to Post Bag No. 1, Electronic City Office, Bengaluru–560100 (Karnataka). The other copy may be retained by the assessee for his record. Due Date of ITR 7 Form Filing for FY 2020-21: The due date for filing ITR-7 Form is different depending upon the audit of the accounts. Tax Assessees whose accounts are not required to be audited can file till 30th September 2021 (Revised) for FY 2020-21 (AY 2021-22) while for audit cases, the due date is 30th November 2021 for FY 2020-21 (AY 2021-22). Changes In ITR -7 For Assessment Year AY 2020-21: Sl.                                                 Changes in ITR-7                                                                 [Field Name] Remarks 1 Changes in Registration details The following four columns have been added for new provisions- (i) Whether Application for registration is made as per new provisions (ii) Section under which the registration is applied (iii) Date on which the application for registration/approval as per new provisions is made (iv) Section of exemption opted for under the new provisions 2 No Change in Details of Companies In case of details of companies where the taxpayer is a shareholder of unlisted equity shares 'Type of Company' is retained in ITR-5. 3 Multiple bank accounts can be selected for refund credit In preceding AY 2019-20, only one bank account was allowed to be selected for refund credit. In AY 2020-21, multiple bank accounts are allowed to be selected for getting the refund credit. In case multiple accounts are selected for refund credit, then refund will be credited to one of the account decided by CPC after processing the return. Structure of Form ITR -7: The ITR-7 form has been divided into 2 parts that are Part A, Part B and 23 schedules. They are as follows: • Part-A includes General information From the Assessment Year (AY) 2019-20, a taxpayer has to also provide complete information regarding the details of registration or approval. • Part-B includes the detailed outline of the total income and tax computation of the taxpayer with respect to income liable for taxation. • 23 Schedules : 1. Schedule-I: Details of amounts accumulated/ set apart within the meaning of section 11(2) in last year’s viz., previous years relevant to the current assessment year. 2. Schedule-J: Statement showing the investment of all funds of the Trust or Institution as on the last day of the previous year. 3. Schedule-K: Statement of particulars regarding the Author(s)/ Founder(s)/ Trustee(s)/ Manager(s), etc.of the Trust or Institution. 4. Schedule-LA: Details in case of a political party. 5. Schedule-ET: Details in case of an Electoral Trust 6. Schedule AI: Aggregate of income derived during the year excluding voluntary contributions 7. Schedule ER: Amount applied to charitable or religious purposes in India – Revenue Account 8. Schedule EC: Amount applied to charitable or religious purposes in India – Capital Account 9. Schedule-HP: Computation of income under the head Income from House Property. 10. Schedule-CG: Computation of income under the head Capital gains. 11. Schedule-OS: Computation of income under the head Income from other sources. 12. Schedule-VC: Details of Voluntary Contributions received 13. Schedule-OA: General information about business and profession 14. Schedule-BP: Computation of income under the head “profit and gains from business or profession 15. Schedule-CYLA: Statement of income after set off of current year’s losses 16. Schedule-MAT: Computation of Minimum Alternate Tax payable under section 115JB (n) 17. Schedule-MATC: Computation of tax credit under section 115JAA 18. Schedule AMT: Computation of Alternate Minimum Tax payable under section 115JC (p) 19. Schedule AMTC: Computation of tax credit under section 115JD 20. Schedule PTI: Pass through Income details from business trust or investment fund as per section 115UA, 115 21. Schedule-SI: Statement of income which is chargeable to tax at special rates 22. Schedule 115TD: Accreted income under section 115TD 23. Schedule FSI: Details of income accruing or arising outside India 24. Schedule TR: Details of Taxes paid outside India 25. Schedule FA: Details of Foreign Assets • Verification Instructions for filling out the ITR-7 Form: • All items must be filled in the manner indicated therein; otherwise the return may be liable to be held defective or even invalid • If any schedule is not applicable score across as “---NA---". • If any item is inapplicable, write “NA" against that item. • Write "Nil" to denote nil figures. • Except as provided in the form, for a negative figure/ figure of loss, write “-" before such figure. • All figures should be rounded off to the nearest one rupee. However, the figures for total income/ loss and tax payable be finally rounded off to the nearest multiple of ten rupees. Sequence for filling out Parts and Schedules: • Part A • Schedules • Part B • Verification DOCUMENT REQUIRED FOR FILING ITR-7: • Permanent Account Number (PAN) • Aadhaar Number • GSTIN No. and turnover as per GST returns • Match book turnover with GST returns • Form 16A & 16B,16C,16D (if any issued by deductor) and TDS certificate • Form 16 from employer. An employee who has change the job in Financial Year can have 2 or more form 16. • TDS certificate from employer • Match tax details with 26 AS • Statement of interest paid on house loans • Interest statements showing interest earned on savings bank account and fixed deposits • Proof of tax saving investments/expenses (80C to 80U) • Bifurcation of details of investment made during the period from April 1, 2020 to June 30, 2020. • Other investment documents, such as statement of interest paid on education loan etc. • Bank account details with IFSC code • Balance Sheet • Manufacturing Account • Trading Account • Profit & Loss. • Advance Tax SERVICE PROVIDED & PROCESS: • Collection of necessary documents such as Form 16 (TDS Certificate issued by the employer in case tax is deducted from salary), Form 16A ( issued by the bank for TDS deducted on the interest payment on the fixed deposit) in the TRACES format & capital gain statement. TDS certificate should be digitally signed by the taxpayer. • Download Form 26AS & cross check with TDS certificate to ensure that tax deducted from taxpayer salary or from taxpayer interest income is deposited with the government. • In case of any error, rectify Form 26AS. If the error is not rectified, taxpayer won’t be able to claim credit on deducted tax. • Next step is to calculate total income chargeable to tax. • After this, taxpayer needs to calculate tax liability. • Once all the taxes are paid, taxpayer can proceed for Income Tax Return filing. taxpayer can only claim for refund if taxpayer file income tax return. • Verification of Income Tax Return • Receive e-verification acknowledgement • Department will process taxpayer return and will communicate through mail. CHOOSE REQUIRED PLAN: • Basic: ITR-7 FILING for taxable income upto 10 lakhs Service Fees- 9999/- Including Taxes • Standard: ITR-7 FILING for taxable income less than 25 lakhs Service Fees- 14999/- Including Taxes • Ace: ITR-7 FILING for taxable income more than 25 lakhs. Service Fees- 19999/- Including Taxes Working Process :

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Frequently Asked Question (FAQ’S)- Q-What is the difference between ITR-5 & ITR-7? A- ITR 5 is to be filed by a partnership firm, an association of persons, the body of individuals, artificial judicial person, cooperative societies whereas ITR 7 is to be used by the trust and the Non-profit Organization. Q- Can AOP file ITR 7? A-Any person claiming exemption under section 11, or covers under section 139(4A),(4B),(4C) and(4D) can file ITR-7 i.e. AOP can file ITR-7. Q-Is DSC mandatory for ITR-7? A- While verification of ITR Form 7, the political parties are compulsory required to verify the return through digital signature certificate(DSC) by CEO or secretary, whereas other form of persons have the following options for verifying return: Through DSC(digital signature ***