Instructions for filling out Form ITR-7 for A.Y. 2022-23

Instructions to Form ITR-7 (A.Y. 2022-23)

Instructions for filling out Form ITR-7

These instructions are guidelines for filling the particulars in Income-tax Return Form-7 for the Assessment Year 2022-23 relating to the Financial Year 2021-22. In case of any doubt, please refer to relevant provisions of the Income-tax Act, 1961 and the Income-tax Rules, 1962.

1. Assessment Year for which this Return Form is applicable

This Return Form is applicable for assessment year 2022-23 only i.e., it relates to income earned in Financial Year 2021-22.

2. Who is eligible to use this Return Form?

This Return Form can be used by persons including companies who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D).

The category of persons whose income is exempt under various clauses of section 10, and who are not mandatorily required to furnish their return of income under the provisions of section 139, may use relevant ITR form for filing return. From A.Y.22-23 onwards ITR 7 will not be applicable to the persons whose income is exempt under Section 10(20) ,Section 10(23AA),Section 10(23AAB), Section 10(23BB), Section 10(23BBA), Section 10(23BBC), Section 10(23BBE), Section 10(23BBG),Section 10(23BBH),Section 10(23C)(i),Section 10(23C)(ii), Section 10(23C)(iii), Section 10(23C)(iiia), Section 10(23C)(iiiaa), Section 10(23C)(iiiaaa),Section 10(23C)(iiiaaaa), Section 10(25)(i),Section 10(25)(ii),Section 10(25)(iii),Section 10(25)(iv), Section 10(25)(v), Section 10(25A), Section 10(26AAB),Section 10(26B),Section 10(26BB),Section 10(26BBB),Section 10(44).

Assesees claiming exemptions under sections mentioned below can file ITR 7

Return required to be furnished u/s	Exemption claimed u/s
Section 139(4A)	Section 11
Section 139(4B)	Section 13A Section 13B
Section 139(4C)	Section 10(21) Section 10(22B) Section 10(23A) Section 10(23B) Section 10(23C)(iiiab) Section 10(23C)(iiiac) Section 10(23C)(iiiad) Section 10(23C)(iiiae) Section 10(23C)(iv) Section 10(23C)(v) Section 10(23C)(vi) Section 10(23C)(via) Section 10(23D) Section 10(23DA) Section 10(23FB) Section 10(24) Section 10(46) Section 10(47) Section 10((23AAA) Section 10(23EC) Section 10(23ED) Section 10(23EE) Section 10(29A)
Section 139(4D)	Section 10(21) read with section 35(1)

3. Manner of filing this Return Form

This Return Form can be filed with the Income-tax Department electronically on the e-filing web portal of Income-tax Department) [www.incometax.gov.in ] and verified in any one of the following manner as applicable –

(i) digitally signing the verification part, or

(ii) authenticating by way of electronic verification code (EVC), or

(iii) Aadhaar OTP

(iv) by sending duly signed paper Form ITR-V – Income Tax Return Verification

Form by speed post to CPC at the following address –

Centralized Processing Centre,

Income Tax Department,

Bengaluru— 560500,

Karnataka”.

The Form ITR-V-Income Tax Return Verification Form should reach within such time as specified from the date of e-filing the return, which is being intimated at the time of uploading the return data.

The confirmation of the receipt of ITR-V at Centralized Processing Centre will be sent to the assessee on e-mail ID registered in the e-Filing account.

However, a political party shall compulsorily furnish the return in the manner mentioned at (i) above.

In case an assessee is required to furnish a report of audit under sections 10(23C)(iv), 10(23C)(v), 10(23C)(vi), 10(23C)(via), 12A(1)(b), 92E he shall file such report electronically on or before the date of filing the return of income.

4. Key changes (as compared to ITR for AY 2021-22)

> In Part A General:-

• • ITR 7 is applicable for persons required to furnish return under section 139(4A) or 139(4B) or 139(4C) or 139(4D) only. From return furnished under section option to select “Others” dropdown is removed. From A.Y.22-23 onwards persons whose exempt is exempt cannot file ITR 7.
  • In ITR 7 Option of Filing ITR in response to notice u/s 153A and 153C is removed from ITR as requirement to file ITR under these sections is omitted.

> In Schedule I: –

a) Schedule I is also made applicable to Section 10(21) read with section 35 and correspondingly Scientific research/ social science or statistical research words have been added in no 4 & SL.no 6.

b) New Columns 9 to 13 have been added for having the information relating to violations under sub-section (3) of section 11

> New Schedule D has been inserted for section 11(1) to capture details of deemed income like year of deeming, reason of deeming, deemed income which could not be applied, balance deemed income required to be applied in subsequent financial years.

> In Schedule J

• • As per proposed changes in Income tax Act, by the Finance Act 2022, Table A1 has been newly inserted to capture the information of corpus donation received by the trust or institution for places notified u/s 80G(2)(b) and corpus other than Sec 80G(2)(b), opening balance, amount deposited back into corpus, closing balance.
  • Table A2 has been newly inserted to capture the information of Loans & Borrowings opening balance, Amount borrowed during the year, Amount applied from such loan, Loan repayment during the year, closing balance.
  • In Table B “Details of investment/deposits made under section 11(5) as on 31.03.2022 “Date of maturity & Maturity amount“ field have been deleted Information about amount of investment made in section 11(5) modes out of different sources needs to be specified.

> Balance sheet has been newly inserted and it is applicable to all asseessee who is filling ITR 7 return. Assessee should enter the sources of Fund and application of fund in the balance sheet (as per applicability.)

> In schedule LA, additional field has been inserted during the current assessment year to capture the information from political party such as Total voluntary contribution received during the year and Voluntary contribution received less than Rs.2000 in cash and other modes and Voluntary contribution received upto Rs.20000 & more than Rs.20000 during the Financial year. For assesees registered under Section 29A of Representation of People Act, 1951 registration number along with date of registration also needs to be provided

> From Schedule ER removed Depreciation and amortization cost as per changes brought vide Finance Act, 2022 by inserting an Explanation to section 11 and Explanation 3 to clause (23C) of section 10 providing that any sum payable by any fund or institution or trust etc. shall be considered as application of income during the previous year in which such sum is actually paid.

> In Schedule ER, new field inserted in table C to capture information of disallowable expenditure such as :

• • Donation to trust or institution registered u/s 12AA/12AB or approved u/s 10(23C) (iv)/(v)/(vi)/(via) towards corpus
  • Donation to trust or institution registered u/s 12AA/12AB or approved u/s 10(23C)(iv)/(v)/(vi)/(via) other than towards corpus in case of donations out of accumulated income
  • Donation to trust or institution registered u/s 12AA/12AB or approved u/s 10(23C)(iv)/(v)/(vi)/(via) not having same objects
  • Donation to any person other than trust or institution registered u/s 12AA/12AB or approved u/s 10(23C)(iv)/(v)/(vi)/(via)
  • Application outside India for which approval as per proviso to section 11(1)(c) is not obtained
  • Applied for any purpose beyond the objects of the trust or institution

> In schedule ER and Schedule EC, new fields have been inserted as per changes brought vide Finance Act, 2022 by inserting an Explanation to section 11 and Explanation 3 to clause (23C) of section 10 providing that any sum payable by any fund or institution or trust etc. shall be considered as application of income during the previous year in which such sum is actually paid.

>

• • Amount which was not actually paid during the previous year out of F (Schedule ER) / B (Schedule EC)
  • Amount actually paid during the previous year which accrued during any earlier previous year but not claimed as application of income in earlier previous year
  • Total amount to be allowed as application (I=F-G+H) (Schedule ER) / (E=B-C+D)(Schedule EC)

> Schedule BP, Schedule CG has been modified as similar to ITR 6

> In Schedule OS –

a) In existing Sl No 2c,2d and Sl No 2e w.r.t “Income by way of interest or dividend from bonds or GDR purchased in foreign currency in case of a non-resident u/s 115AC(1)(a&b) has been bifurcated in “Income by way of interest from bonds purchased in foreign currency in case of a non-resident u/s 115AC(1)(a)” and “Income by way of dividend from GDR purchased in foreign currency in case of a non-resident u/s 115AC(1)(b)”; for the purpose of calculation of Interest under section 234C

b) Income chargeable at special rates Anonymous donations in certain cases chargeable u/s 115BBC in no 2C and 2D of Schedule OS has been added.

c) In existing Sl. No. 10 “Information about accrual/receipt of income from Other Sources” new fields have been added w.r.t dividend income chargeable at special rates for the purpose of calculation of interest u/s 234C

> Part B-TI has been bifurcated into 2 parts i.e. Part B1 and Part B2 respectively.

a) Part B1 of Part B-TI is applicable to persons registered under section 12A/12AA/12AB or approved under section 10(23C)(iv)/10(23C)(v)/ 10(23C)(vi)/10(23C)(via)

b) Part B2 of Part B-TI is applicable to persons who are claiming exemption under sections 10(21), 10(22B), 10(23A), 10(23AAA), 10(23B), 10(23C)(iiiab), 10(23C)(iiiac), 10(23C)(iiiad), 10(23C)(iiiae), 10(23D), 10(23DA), 10(23EC), 10(23ED), 10(23EE), 10(23FB), 10(24), 10(29A), 10(46), 10(47), 13A/13B respectively.

5. Filling out the ITR-V – Income Tax Return Verification Form

Where the Return Form is furnished in the manner mentioned at 3(iv), the assessee should print Form ITR -V-Income Tax Return Verification Form. ITR-V-Income Tax Return Verification Form duly signed by the assessee, has to be sent by ordinary post or speed post only to Centralized Processing Centre, Income Tax Department, Bengaluru–560500 (Karnataka).

General guidance

In part A General, please furnish the information relating to identity of assessee, details of any project or institution run by the assessee during the year, section under which return is filed and section under which exemption has been claimed etc.

Certain schedules to this return form are mandatorily required to be filled up by assessees which are claiming exemption under specific provisions, as per the following list:-

Exemption claimed under section	Schedule required to be filled up
Political party claiming exemption u/s 13A	Schedule LA Schedule VC
Electoral Trust claiming exemption u/s 13B	Schedule ET Schedule VC
Trust/institution claiming exemption u/s 11 and/or 10(23C)(iv) or 10(23C)(v) or 10(23C)(vi) or 10(23C) (via)	Schedule I Schedule D Schedule J Schedule VC Schedule AI Schedule ER Schedule EC
Assessee claiming exemption under any of the clauses of section 10(21), 10(22B), 10(23AAA), 10(23B), 10(23FB), 10(23D), 10(23DA), 10(23EC), 10(23ED), 10(23EE), 10(29A), 10(46), 10(47)	Schedule IE 1 Schedule VC
Assessee claiming exemption under sections 10(23A), 10(24)	Schedule IE 2 Schedule VC
Assessee claiming exemption under sections 10(23C)(iiiab) or 10(23C)(iiiac)	Schedule IE 3 Schedule VC
Assessee claiming exemption under sections 10(23C)(iiiad) or 10(23C)(iiiae)	Schedule IE 4 Schedule VC

This ITR form is applicable for assessee to claim exemption under sections 10(21), 10(22B), 10(23A), 10(23AAA), 10(23B), 10(23C)(iiiab), 10(23C)(iiiac), 10(23C)(iiiad), 10(23C)(iiiae), 10(23C)(iv), 10(23C)(v), 10(23C)(vi), 10(23C)(via), 10(23D), 10(23DA), 10(23EC), 10(23ED), 10(23EE), 10(23FB), 10(24), 10(29A), 10(46), 10(47), 11, 13A/13B respectively13A or 13B. If these exemptions arenot applicable to the assessee, relevant ITR form as per rule 12 may be used.

Where TDS has been claimed ensure that corresponding receipts are disclosed in the applicable schedules. For example schedule AI has to be filled by person registered under section 12A/12AA/12AB or approved under section 10(23C)(iv) to (via). Schedule IE1 to IE4 has to be filled by the person claiming exemption under clauses of section 10. Heads of income is required to be filled only if assessee has taxable income.

In case exemption u/s 10 is not allowed due to non-compliance of the provisions of the Act, then the receipts mentioned in relevant Schedule IE will be considered as income in Schedule OS and will be taxed.

Where an trust or institution is registered u/s 12A/12AA/12AB or approved u/s 10(23C)(iv) or 10(23C)(v) or 10(23C)(vi) or 10(23C)(via) nothing contained in section 10 [other than [clause (1), and clause (46)] thereof] shall operate to exclude any income derived from the property held under trust from the total income of the person in receipt thereof for that previous year

Audit report in form 10B/10BB has to be e-filed at least one month prior to due date for filing of return u/s 139(1).

Read Full text of Instructions for filling out Form ITR-7 for A.Y. 2022-23

(Republished with amendments)