ITR-5 — Firm & LLP Return
The return a partnership firm or LLP files.
ITR-5 is the return for a firm, an LLP, an association of persons or a body of individuals. It is filed by 31 July where no audit applies and 31 October where it does.
The item that most often creates a disallowance is partner remuneration and interest. Section 40(b) caps both — interest at 12% a year, and remuneration on a slab of book profit — and anything above the cap is added back to income.
An LLP or firm is taxed at a flat 30% plus surcharge and cess, with no slab benefit, so the arithmetic on what to pay out as remuneration rather than leave as profit is worth doing before the year closes rather than after.
What is included
- Books finalised and depreciation computed
- Section 40(b) check on remuneration and interest
- Partner capital account reconciliation
- ITR-5 filed and verified
What we need from you
- Partnership deed or LLP agreement
- Books of account and bank statements
- Partner capital and current account details
- Audit report, where applicable
Questions
What is the section 40(b) limit on partner remuneration?
On the first ₹6 lakh of book profit, the higher of ₹3 lakh or 90% of book profit; 60% on the balance. Interest on partner capital is capped at 12% a year. Anything above either limit is disallowed and taxed in the firm.
Also in Income tax
Talk to us
Get started with ITR-5 — Firm & LLP Return
Tell us a little about the business and a chartered accountant will call you back. You will get a firm quote before any work begins.
- A qualified accountant on the call, not a call centre
- A firm quote before any work begins
- Your details are never sold or shared