ITR-5 Filing Guide AY 2026-27 | New Rules & Example
Complete Guide to ITR-5 Form: New Rules, Filing Process & Tax Calculation (AY 2026-27)

Navigating the ITR-5 form this year requires understanding a key transition. While a new Income Tax Act, 2025 is introduced, filings for FY 2025-26 are still governed by the Income Tax Act, 1961 (as amended).

This guide explains how to file ITR-5 along with new updates like Section 194T and revised partner remuneration rules.

1. What is ITR-5 Form?

ITR-5 is used by non-individual entities that are not companies.

Who Must File?

  • Partnership Firms
  • LLPs
  • AOPs and BOIs
  • Artificial Juridical Persons
  • Estates, Investment Funds, Business Trusts

Who is Excluded?

  • Individuals and HUFs
  • Companies
  • Entities under Section 11 (use ITR-7)

2. Critical Changes & New Rules

Provision Impact
Section 194T 10% TDS on partner payments exceeding ₹20,000
Remuneration Limits Higher deduction allowed under Sec 40(b)
Capital Gains Short-term 20%, Long-term 12.5%
Share Buybacks Treated as dividend income

3. Structure of ITR-5

  • Part A-GEN – Basic details
  • Part A-BS – Balance Sheet (Mandatory)
  • Part A-P&L – Profit & Loss
  • Schedule BP – Business income
  • Schedule CG – Capital gains
  • Schedule OS – Other income
  • Schedule TDS – Tax deducted details

4. Practical Example

Scenario: LLP Financials

Net Profit: ₹12,00,000

Interest Paid: ₹1,50,000 (15%)

Salary Paid: ₹8,00,000

Disallowed Interest: ₹30,000

Revised Profit: ₹12,30,000

Allowed Remuneration: ₹8,00,000

Taxable Income: ₹4,30,000

Tax: ₹1,29,000

Cess: ₹5,160

Total Tax Payable: ₹1,34,160

5. Step-by-Step Filing

  • Login to Income Tax Portal
  • Select AY 2026-27
  • Choose ITR-5
  • Use Online or JSON Utility
  • Upload Audit Report if applicable
  • Verify using DSC or OTP

FAQs

Does new tax law apply now?

No, current filing is under Income Tax Act 1961.

Due dates?

July 31 (non-audit), Oct 31 (audit), Nov 30 (TP cases)

TDS not deducted?

30% expense disallowed under Section 40(a)(ia)

Can presumptive firms use ITR-5?

Generally no, use ITR-4 unless LLP.

Is Balance Sheet mandatory?

Yes, it must be filled.

Pro Tip: Always match AIS with your books to avoid rejection due to mismatch in TDS claims.