A Step-By-Step Guide On How To File ITR-7 Form
If you run a religious or charitable organisation, you need to report any income from such entities using ITR-7. Basically, any person that can claim tax exemptions under Section 139 of the Income Tax Act must file this form. To know more about how to file ITR-7 go through the following sections carefully.
Process of Filling out ITR 7 Form
In case a taxpayer needs to learn about how to file ITR, the person must know that there is a particular sequence that needs to be maintained while doing so. The sequence is as follows:
- Part A
- Part B
- Schedules
- Verification
How To File ITR 7 Form Online
These are the two primary ways in which a taxpayer can file ITR 7 with the IT Department of India:
- The assessee can transmit the data electronically in his/her income tax return. After that, the person has to submit the verification of the return in form ITR V.
- The taxpayer can produce the returns by using the certificate of digital signature.
Even though the first one is a partially online procedure, the taxpayer needs to sign the ITR V copy and send it to Post Bag No. 1, Electronic City Office, Bangalore: 560100 (Karnataka) by ordinary post.
Steps for Filling out the ITR-7 Verification Document
Here is the procedure for filling out the verification document:
Step 1: Provide accurate details in the verification document.
Step 2: Make sure to strike out information or pointers that are not applicable.
Step 3: Before submitting the final return, ensure that your digital signature is there in the document.
Note that in case of providing any misinformation in such documents or making false statements, the taxpayer will be penalised under the concerned Section of the IT Act. It can not only lead to a hefty fine but also imprisonment for a specified period.
What is the Importance of ITR-7 Form
Organisations, firms, or local authorities deriving their income from properties that are not meant for religious or charitable purposes need to file ITR 7. For filling out the ITR 7 form, assessees can provide their returns through physical paperback forms, barcoded forms, using a digital signature or by verifying return submission through the ITR V form.
Before you learn about the process of how to file ITR 7 for AY 2023-24, you should check who must file it.
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Who Are Required to File ITR 7?
The parameters that individuals or companies need to meet for filing ITR 7 are mentioned below:
- Individuals who are receiving income from property that is in possession of a legal obligation dedicated to charitable or religious purposes or trusts need to file ITR 7 under Section 139(4A).
- Under Section 139(4C), the following categories need to file an income tax return:
- News agency
- Institutions mentioned in Section 10(23B)
- Scientific research association
- Educational institutions or universities or any medical institutions, including hospitals
- Associations mentioned in Section 10(23A)
- Any investment fund that is mentioned in Section 115UB should file ITR 7 under Section 139(4F).
- Any university or educational institution that does not have to submit its return of loss or income under other provisions needs to file ITR 7 under Section 139(4D).
- Business trusts not producing their return of loss or income under other provisions of Section 139(4E) must file ITR 7 under this Section.
Form ITR-7 Eligibility Criteria
Assessees who are not claiming tax exemptions under Section 139(4B), Section 139(4A), Section 139(4D), Section 139(4C) do not need to file ITR 7.
ITR-7 Form Structure
While learning about how to file ITR 7, one must know that the structure of the form is also crucial. Note that the form is divided into two parts and consists of 19 schedules. These components are as follows:
- Schedule-I: Amount details accumulated or kept aside within the interpretation of Section 11(2) in past years that are relevant to the current AY.
- Schedule-J: Investment of funds-related statements of the institution as on the previous year’s last day.
- Schedule-K: Authors/Trustees/Managers/Founders, etc. of any institution or trust’s statement of particulars
- Schedule-LA: Information related to a political party
- Schedule-VC: Information about the received voluntary contributions
- Schedule-ET: Information related to an electoral trust
- Schedule ER: Amount utilised for religious or charitable purposes – revenue account
- Schedule AI: Income aggregates excluding voluntary contributions during an FY
- Schedule EC: Amount utilised for religious or charitable purposes – capital account
- Schedule-HP: Evaluation of revenue under income from house property head
- Schedule-OS: Evaluation of income or revenue under income from other sources head
- Schedule-CG: Calculation of income under earnings from capital gains head
- Schedule-OA: Business or profession related general information
- Schedule-BP: Calculation of income under the profits and gains derived from business or profession head
- Schedule-CYLA: Income statements after setting off of ongoing year’s losses
- Schedule-SI: Income statement which is taxable at special rates
- Schedule PTI: Pass through details related to earnings from an investment fund or business trust according to Section 115UB, 115UA
- Schedule 115TD: Accreted revenue under Section 115TD of the IT Act
- Schedule FA: Information related to foreign assets
- Schedule TR: Information related to the taxes paid outside India
- Schedule FSI: Income details accruing outside the country
- Part B-TI: Evaluation of total income
- Schedule-SH: Shareholding details in a company that is unlisted
- Part B-TTI: Tax liability evaluation on total income
Final Word
Even those companies or entities working under a trust, running educational institutes, medical institutions and religious organisations need to file their tax returns as per the IT Act. For these businesses learning how to file ITR 7 is crucial, and the abovementioned information should be of help.
FAQs on Filing ITR-7
Ans: Section 139(4A) states that income from properties held under obligation or trust for religious or charitable purposes must file ITR 7. Remember that every person who receives such income wholly or partly for charity must report the same using this form.
Ans: When the total annual income of chief executive officers or CEOs of a political party exceeds the maximum tax-free amount, he/she must furnish form ITR 7 under Section 139(4B).
Ans: Even Non-Resident Indians who operate such charitable or religious organisations and earn an income from the same must file ITR 7 as well. However, NRIs can provide details of foreign bank accounts during the filing process to receive tax refunds there.
Ans: Taxpayers must follow the below-mentioned guidelines:
a) Any zero value figures must be written as NIL
b) Taxpayers must round off all amounts to the nearest multiples of 10
c) Any negative values should include a minus sign before the figure
Ans: Part B of ITR 7 has three distinct sections. These include:
a) TI – This Section includes information on deductions, exemptions, and total taxable income
b) TTI – Under this Section, you will find information such as tax relief, tax payable, penal interests, cess, surcharge, and more.
c) Tax details
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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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