In this guide
The income tax returns of partnership firms and LLPs are generally filed in Form ITR-5. For AY 2026-27, the return covers income earned during FY 2025-26 and continues to be governed by the Income-tax Act, 1961.
Preparing ITR-5 is not just about entering the profit reflected in your accounts. Income, expenses, partner payments, tax credits and applicable disclosures must be reconciled before submitting and verifying the return.
Who Must File ITR-5?
Every partnership firm and LLP must file an income tax return, regardless of whether it made a profit, suffered a loss or had no taxable income.
An eligible resident partnership firm other than an LLP can use ITR-4 if it meets all the presumptive-taxation and other eligibility requirements. Do not choose ITR-4 just because turnover is low.
LLPs cannot use ITR-4. A proprietor files an individual return rather than ITR-5.
The firm’s return is also separate from its partners’ personal returns.
When Is the Filing Deadline?
The deadline depends on audit requirements and other circumstances, rather than the form number alone.
For AY 2026-27, CBDT extended the return deadline for the covered audit-category taxpayers from October 31, 2026 to November 21, 2026. The corresponding tax-audit report deadline was extended from September 30 to October 21, 2026.
Taxpayers required to furnish a report under Section 92E ordinarily have a November 30, 2026 return deadline. Non-audit business cases ordinarily have an August 31, 2026 deadline.
Check the precise category and any subsequent applicable notification. An extension for one category does not automatically extend another category’s deadline or waive interest.
Documents and Information to Prepare
Maintain a complete working file containing:
- Firm PAN, partnership deed or LLP agreement and amendments;
- LLPIN, where applicable, and partner identification details;
- Partner profit-sharing ratios and changes during the year;
- Trial balance, balance sheet and profit-and-loss account;
- Bank statements, reconciliations and loan records;
- Sales, purchases, expenses and GST reconciliation;
- Fixed-asset register and depreciation workings;
- Partner capital, current-account, interest and remuneration details;
- Form 26AS, AIS and TDS certificates;
- Advance-tax and self-assessment-tax challans;
- Previous returns, losses and tax-credit records;
- Audit reports and other prescribed forms, where applicable.
These records support preparation; they are not all attachments to ITR-5. The return is generally annexure-less, while prescribed audit reports and forms must be filed separately.
TaxClear’s accounting services can assist with bookkeeping and reconciliation.
Which ITR-5 Schedules Must Be Completed?
Complete schedules according to the firm’s actual transactions. Not every schedule applies to every taxpayer.
| Part or schedule | What to review |
|---|---|
| Part A–General | Entity status, partner details, filing section and audit information |
| Part A–Balance Sheet and Profit and Loss | Financial figures and applicable accounting disclosures |
| Schedule BP | Taxable business income after adjustments |
| Depreciation schedules | Tax depreciation and asset-block calculations |
| Schedules HP, CG and OS | House-property income, capital gains and other income |
| CYLA, BFLA and CFL | Current losses, brought-forward losses and eligible carry-forward |
| Part B–TI and TTI | Total income and tax computation |
| Tax-payment and TDS/TCS schedules | Credits claimed against the firm’s PAN |
Review foreign-income, foreign-asset, deduction and alternate-minimum-tax schedules where applicable.
Do not copy accounting depreciation directly into the tax computation. Similarly, a loss in the accounts does not necessarily mean there is no taxable income.
Check Partner Payments Carefully
Interest and remuneration paid to partners require separate tax review. Deductibility depends on the deed, the nature of the payment and statutory limits.
Reconcile the amounts in the accounts, tax computation and partner disclosures. Review applicable TDS requirements for partner payments separately.
Partners’ drawings and distributions of profit are not deductible business expenses.
For example, if an expense deducted in the accounts is disallowed under income-tax law, add it back to accounting profit when calculating taxable business income. Paying tax only on unadjusted accounting profit may understate the liability.
Step-by-Step Filing Process
1. Finalise the Accounts and Tax Computation
Reconcile the books with GST returns, bank records and tax-credit information. Explain differences rather than forcing figures to match.
2. Complete Applicable Reports
Determine whether tax audit, transfer-pricing reporting or another prescribed report applies. Complete the required filing and acceptance steps separately.
3. Prepare ITR-5
Use the latest AY 2026-27 utility or filing facility. Select the correct entity status, filing section and applicable schedules.
4. Check Taxes and Credits
Verify TDS, TCS and tax payments against the firm’s records. Pay any self-assessment liability and enter the correct challan details.
5. Validate, Submit and Verify
Resolve validation errors and review the complete return before submitting it.
A firm liable to audit under Section 44AB must furnish its return electronically under digital signature. Other eligible cases may use the permitted electronic-verification methods.
Save the acknowledgement and confirm successful verification.
Common Errors to Avoid
Do not claim TDS without reporting the corresponding income, omit partner changes or carry forward losses without checking eligibility and filing conditions.
ITR-5 does not replace MCA filings. LLPs should review their LLP Form 8 filing obligations separately.
Frequently Asked Questions
Must a loss-making LLP file?
Yes. The filing obligation applies irrespective of income or loss.
Can every partnership firm use ITR-4?
No. Only eligible resident firms other than LLPs meeting all relevant conditions can use it.
Must supporting documents be attached?
Generally, no. Retain records and separately file prescribed reports where required.
Does ITR-5 cover partners’ personal returns?
No. Each partner must separately assess their individual filing obligations.
Does submitting the return complete filing?
No. Complete the applicable verification process and retain confirmation.
