Every LLP incorporated in India is required to file an income tax return under Section 139(1) of the Income Tax Act of 1961. Partners of an LLP are in charge of filing the annual income tax. Being a partner of an LLP you probably have questions on how to file your income tax return and annual compliance for LLP. Which form is required to be filed? In this blog, we will talk all about how to file an income tax return for an LLP.


What is an income tax return?

An income tax return is a kind of form that a person or business is supposed to file with the Income Tax Department in India. It contains information about the people or company’s income, expenditure and taxes to be paid on it during the year.


Which form is required to file to submit an income tax return?

The form ITR 5 is applicable for filing a Limited Liability Partnership income tax return. Each LLP incorporated in India is mandated to file an income tax return as it is one of the mandatory annual compliance for LLP. Form ITR 5 can be downloaded from the ITR website. The process to file the income tax return of LLP is online. The one major requirement is a digital signature certificate of the authorized partner for filing ITR.


How do files form ITR 5 of LLP?

The form ITR 5 of LLP is filed with Income Tax Department through online and offline modes:


Process of filing ITR 5 through offline mode: The form can be filed offline by submitting the return on paper or
by submitting the bar-coded return. An acknowledgment slip is included with the return form that must be
correctly submitted when the return is filed on paper.


Process of filing ITR 5 through online mode: The form ITR 5 can be filed either by sending the return electronically with a digital signature or by submitting the data in the return electronically and then filing the verification of the return in the Income Tax Return Form ITR-5.


The candidate must print two copies of the ITR-5 Form while filing the return online.


One copy of the ITR-5 duly signed by the applicant or authorized person of an LLP must be sent to Post Bag No. 1, Electronic City Office, Bengaluru-560500 (Karnataka). The applicant or LLP must have the other copy for his/her record. A company whose accounts are applicable for audit under section 44AB is required to file the ITR 5 electronically with a digital signature.


Benefits of filing income tax return of an LLP
1. Get a loan easily

Filing an income tax return helps a partnership firm or business in getting loans easily from different financial institutions. When a business asks for high-value loans, such as a business long-term loan or a working capital loan, the majority of banks and NBFCs ask for an ITR receipt from the business for the recent three years. ITR is considered by lenders as the most reliable document presenting the company’s revenue and turnover. Therefore, if an LLP plan to ask for a loan in the future, then LLP should file their income tax return on time.


2. Carry forward the losses

The business can carry forward the losses from the income of the previous year by timely filing income tax returns and LLP annual compliance. Most firms lose money during their first few years of operation. If the ITR is submitted, the business loss or capital losses may be carried forward for a maximum of eight years. However, if an ITR is not submitted, the taxpayer is deprived of this benefit.


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3. Net worth

The ITR submitted to the government defines the company’s financial position. Filing income tax return compliance for LLP helps you in tracking the net worth of the companies by displaying business turnover, assets, and revenue. The record of ITR filing shows the person financial capacity and broadens their capital base.


Due Date of filing ITR- 5

The company whose accounts are not applicable for audit is required to file ITR 5 by 31st July. The company whose accounts are applicable for audit is required to file ITR 5 compliance for LLP by 30th October.