What is the ITR-7 Form?
The ITR-7 is the income tax return form prescribed by the Income Tax Department of India for filing returns of income for trusts, institutions, political parties, and other similar entities. It is used by organizations claiming exemptions under sections of the Income Tax Act, 1961, such as Section 11 (Charitable/Religious Trusts), Section 12, Section 139(4A), 139(4B), 139(4C), and 139(4D).
Who Must File ITR-7?
The ITR-7 form is for entities that are not individuals, HUFs, companies, or firms. It must be filed by:
- Charitable and Religious Trusts: Entities claiming exemption under Sections 11 and 12.
- Political Parties: Registered political parties under Section 139(4B).
- Scientific Research Associations: Entities registered under Section 10(21).
- News Agencies: Entities registered under Section 10(22B).
- Educational Institutions: Universities, colleges, and schools under Section 10(23C) or 139(4D).
- Medical Institutions: Hospitals and medical institutions under Section 10(23C) or 139(4D).
- Business Trusts & Investment Funds: REITs, InvITs, and AIFs.
Audit & Compliance
Mandatory Audit Report: If the total income of a trust or institution (before exemptions) exceeds the basic exemption limit, an audit report in Form 10B or 10BB is mandatory. This report must be filed electronically one month before the ITR filing due date.
Accumulation of Income (Section 11(2)): Trusts can accumulate 15% of their income indefinitely. To accumulate more than 15% for specific purposes, they must file Form 10 and invest the funds in specified modes under Section 11(5). This accumulated income must be utilized within 5 years.
Filing Process
The process of filing ITR-7 is completely digital:
- Download Utility: Get the offline utility from the e-filing portal.
- Prepare Return: Fill in details of income, expenditure, assets, liabilities, and exemptions.
- Validate: Use the utility to check for errors.
- Generate JSON: Create the uploadable file.
- Upload: Log in to the portal and upload the JSON file.
- Verify: E-verify the return using DSC or EVC.
Documents & Verification
No Attachments: You do not need to attach any physical documents (like TDS certificates) to the ITR-7. However, you must keep them for your records.
Verification:
- Digital Signature Certificate (DSC): Mandatory for political parties and trusts whose accounts are liable to audit.
- Electronic Verification Code (EVC): Available for entities not liable for audit (if DSC is not used).
Key Schedules in ITR-7
- Schedule I: Details of amounts accumulated/set apart.
- Schedule J: Corpus fund details.
- Schedule FC: Foreign contributions received (FCRA compliance).
- Schedule VC: Voluntary contributions (Domestic & Foreign).
- Schedule AI: Aggregate of income derived during the year.
- Schedule ER: Revenue expenditure incurred.
- Schedule EC: Capital expenditure incurred.
- Schedule 11: Income taxable under section 11(1B).
Due Dates & Penalties
Due Dates:
- October 31st: For entities whose accounts are required to be audited.
- July 31st: For entities not required to be audited.
Penalties: Late filing attracts a fee under Section 234F (up to ₹5,000). Additionally, exemption under Sections 11 and 12 may be denied if the return is not filed within the due date.
