This form is specially designed for non-individual entities. 

That means it is not meant for:

• Individuals running a sole proprietorship

   

• Salaried persons

   

• Hindu Undivided Families (HUFs)

   

• Private limited companies or other registered companies

   

Let’s break it down with an example:

• If you’re a doctor running your clinic as a sole proprietor, you’ll most likely use ITR-3 or ITR-4 (under presumptive taxation).

   

• But if you’re two doctors running a clinic together under an LLP, then ITR-5 is the correct form.

   

In short, ITR-5 is only for business structures where more than one person is involved in ownership, like partnerships and LLPs. 

It’s also used by AOPs, BOIs (Body of Individuals), estates, and investment funds, as long as they’re not companies.

This form also asks for detailed partner-level profit sharing, capital accounts, and other information not needed in ITR-3 or ITR-4.

2. What types of MSMEs are required to file ITR-5 in 2025?

In 2025, any MSME that is not run by a single person but registered as a partnership or LLP must file income tax using ITR-5.

Let’s look at some common examples:

• A dental clinic run by two or more doctors under a partnership deed

   

• A diagnostic lab registered as an LLP, where partners share profits and responsibilities

   

• A medical supply distributor formed as a partnership firm for better vendor contracts

   

• A healthcare IT service provider was started by two friends and registered as an LLP

   

In all these cases, the business is not owned by just one person. Instead, it’s operated jointly by partners who have signed a formal agreement.

So, whether you’re supplying medical equipment or running a service-based business in healthcare, if your MSME is legally a partnership or LLP, then ITR-5 is the correct form to use.

It doesn’t matter if your income is small or large. 

The form is decided by your business structure, not turnover.

3. What are the key documents and details required to file ITR-5 for partnerships and LLPs?

Filing ITR-5 for a partnership firm or LLP needs proper paperwork. 

This helps make the return smooth and avoids errors or notices.

Here’s a simple list of what you’ll need:

1. PAN of the firm or LLP
   
   Every partnership or LLP has its own Permanent Account Number. Use this PAN to file ITR-5, not the partners’ personal PAN.

    

2. Profit and Loss (P&L) Account
   
   This is a statement of the total income and expenses of the firm during the financial year. It shows whether the firm made a profit or a loss.

    

3. Balance Sheet
   
   This report shows the assets (like equipment or cash) and liabilities (like loans or dues) of the business at the end of the year.

    

4. Capital Account of Partners
   
   This is a record of how much money each partner invested, withdrew, or earned during the year.

    

5. Tax Audit Report (if applicable)
   
   If your turnover crosses the audit limit (₹1 crore for businesses or ₹50 lakhs for professions), you’ll need to get a tax audit done. The auditor will give a report in Form 3CD.

    

6. Bank Statements
   
   These help match business income and expenses during filing.

    

7. GST Returns (if registered)
   
   Income declared in GST should match income reported in the P&L. Mismatches may lead to scrutiny.

    

8. Other Declarations
   
   If you’ve claimed depreciation, deductions, or carry-forward losses, those details must be included too.

    

Make sure everything is cross-checked before filing. 

If your books are messy, take help from a CA. It can save time and future trouble.

4. What are the latest tax rates and presumptive options (if any) for partnerships under ITR-5?

If you run a partnership firm or LLP and file your taxes using ITR-5, here’s what you should know about tax rates in 2025.

First, the tax is flat at 30% on the total income of the partnership or LLP. Unlike individuals, there are no slab rates. Even if your profit is ₹2 lakh or ₹20 lakh, the rate remains the same.

On top of this 30%:

• A health and education cess of 4% is added.

   

• If your firm’s total income crosses ₹1 crore, a surcharge of 12% is added on the tax amount.

   

Let’s take a simple example:

If your partnership firm made a ₹10 lakh profit:

• Base tax = ₹3 lakh (30%)

   

• Cess = ₹12,000 (4% of ₹3 lakh)

   

• Total tax = ₹3,12,000

   

Also, partnerships and LLPs cannot opt for presumptive taxation like Section 44AD or 44ADA. 

These simplified tax options are only for individual proprietors and HUFs. 

So if you’re running a clinic or pharmacy as a partnership, you must maintain full books of accounts and file ITR-5 with proper financials.

In short, partnerships are taxed like regular businesses with full reporting. 

There are no shortcuts like presumptive income here.

5. What are the due dates, audit limits, and common compliance mistakes while filing ITR-5?

If your MSME is a partnership or LLP, filing ITR-5 on time is very important to avoid penalties. Here’s how you can stay on track.

Filing Due Dates:

• If an audit is not required, the due date is July 31, 2025.

   

• If your partnership needs a tax audit, then the deadline is October 31, 2025.

   

When Is a Tax Audit Required?

You must get your accounts audited if:

• Your total turnover or gross receipts is more than ₹1 crore in business.

   

• Or more than ₹50 lakh in a profession.

   

• If you’re opting out of presumptive tax (which partnerships usually cannot use anyway), an audit may apply even at lower turnovers.

   

This means most growing partnerships, especially in healthcare like clinics or labs, may cross this limit and need a CA audit report before filing ITR-5.

Common Mistakes to Avoid:

1. Mismatch in GST and Income Tax Turnover:
   
   Many MSMEs forget to match their GSTR-1/GSTR-3B data with ITR declarations. This triggers scrutiny.

    

2. TDS Reconciliation Issues:
   
   You must check Form 26AS and AIS reports to make sure all TDS credits are claimed. Missed TDS = lost money.

    

3. Missing Partner Details:
   
   Firms often forget to properly update or declare partner capital accounts or profit-sharing ratios in ITR-5.

    

4. Wrong ITR Selection:
   
   Filing ITR-3 or ITR-4 instead of ITR-5 for a partnership is a common error and can lead to notices.

    

5. Late Filing:
   
   Filing after the deadline not only brings a ₹5,000 penalty but also affects loan eligibility and refund claims.

    

Final Tip:

Use accounting software or consult a CA to double-check all data, especially if your firm deals in multiple income sources or has GST registrations.

Stay compliant, stay stress-free.

Conclusion:

Filing ITR-5 is essential for MSMEs running as partnership firms or LLPs in India. 

It’s different from ITR-3 or ITR-4, which are for individuals and proprietors. 

Whether you are a dental clinic partnership, diagnostic lab LLP, or service business, understanding your eligibility, collecting the correct documents, and filing on time is crucial.

Unlike individual taxpayers, partnerships face a flat 30% tax rate and cannot opt for presumptive schemes like 44AD or 44ADA.

Ensure you prepare your P&L account, balance sheet, and partner details in advance. 

If your turnover exceeds audit thresholds, don’t miss the October 31 deadline.

Avoid common mistakes like mismatched GST turnover, unclaimed TDS, or wrong ITR selection. 

A little extra care can save you from penalties and help build a strong compliance record vital when applying for loans, tenders, or partnerships.

FAQs

1. Who should file ITR-5 in 2025?

ITR-5 must be filed by partnership firms, LLPs, AOPs, BOIs, and certain cooperative societies. It is not meant for individuals or HUFs.

2. Can MSMEs filing ITR-5 opt for presumptive taxation under 44AD or 44ADA?

No. Partnerships and LLPs filing ITR-5 are not eligible for presumptive schemes like 44AD or 44ADA. They must report actual income and expenses.

3. What is the tax rate for partnerships under ITR-5?

Partnerships are taxed at a flat rate of 30% on profits, plus applicable surcharge and health & education cess.

4. What documents are required to file ITR-5 for LLPs or partnerships?

You’ll need the PAN, profit & loss account, balance sheet, capital account statements, and audit report if turnover exceeds limits.

5. What is the last date to file ITR-5 for FY 2024–25?

The due date is July 31, 2025 (non-audit cases) and October 31, 2025 (if audit is required under the Income Tax Act).

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