ITR for Directors & Partners: Forms and Due Dates for AY 2026-27

ITR for Directors & Partners: Who Must File, Which Form to Use and What is the Correct Due Date for AY 2026-27?

Introduction

One of the most common questions faced by tax professionals during the return filing season is whether every director of a company or partner of a firm/LLP is mandatorily required to file an Income Tax Return (ITR). Similar confusion also exists regarding the applicable ITR form and the due date for filing the return.

Many taxpayers are under the impression that merely holding the position of a director or partner automatically triggers the requirement to file an ITR. However, the Income-tax Act, 1961 does not prescribe any separate mandatory filing requirement solely on account of such status.

This article seeks to address the following practical questions:

1. When is a director or partner required to file an ITR?

2. Which ITR form is applicable?

3. What is the applicable due date for AY 2026-27?

4. What are the practical considerations that taxpayers should keep in mind?

1. Whether ITR Filing is Mandatory for Directors and Partners?

Merely being a director in a company or a partner in a partnership firm/LLP does not automatically make ITR filing mandatory.

The obligation to file an Income Tax Return arises primarily under Section 139(1) of the Income-tax Act, 1961.

Accordingly, a director or partner is required to file an ITR if:

• His or her total income exceeds the maximum amount not chargeable to tax; or
• He or she falls within any of the conditions specified under the Seventh Proviso to Section 139(1).

Therefore, the status of being a director or partner alone does not create an independent obligation to file a return of income.

2. Applicability of Section 139(1) and Seventh Proviso

Even where the total income of a person does not exceed the maximum amount not chargeable to tax, return filing may still become mandatory if the conditions prescribed under the Seventh Proviso to Section 139(1) are satisfied.

A person is required to furnish a return if during the previous year he or she:

(i) Current Account Deposits

Has deposited an amount or aggregate amount exceeding ₹1 crore in one or more current accounts maintained with a banking company or co-operative bank.

(ii) Foreign Travel Expenditure

Has incurred expenditure exceeding ₹2 lakh for travel to a foreign country for himself or any other person.

(iii) Electricity Consumption

Has incurred expenditure exceeding ₹1 lakh towards consumption of electricity.

(iv) Other Prescribed Conditions

Fulfils such other conditions as may be prescribed under the Income-tax Rules.

Accordingly, directors and partners are also required to file their returns if any of the above conditions are satisfied, even if their income is otherwise below the basic exemption limit.

3. Which ITR Form Should Be Used?

A. Directors

The applicable ITR form for directors depends upon the nature of income earned by them.

ITR-2

A director may file ITR-2 where he or she:

• Does not have income chargeable under the head “Profits and Gains of Business or Profession”;
• Has income from salary, house property, capital gains or other sources.

Examples:

• Director drawing salary from a company.
• Director having rental income.
• Director having capital gains from shares or mutual funds.
• Director having interest income.

ITR-3

ITR-3 is applicable where the director has income chargeable under the head “Profits and Gains of Business or Profession”.

Examples:

• Proprietorship business income.
• Professional income.
• Freelancing or consultancy income.
• Any other income taxable under the head PGBP.

Thus, for directors, the choice between ITR-2 and ITR-3 primarily depends upon whether income under the head “Profits and Gains of Business or Profession” exists.

B. Partners of Firm/LLP

The position relating to partners is often debated in practice.

Where a partner receives remuneration, salary, commission, bonus or interest from the firm, such income is taxable under the head “Profits and Gains of Business or Profession” and ITR-3 becomes applicable.

In cases where a partner does not receive any remuneration, interest or commission from the firm, differing views may exist regarding the applicable return form.

However, from a practical compliance perspective, filing ITR-3 is generally advisable for partners of firms and LLPs because:

• The form specifically provides disclosures relating to partnership interests.
• The Income Tax Department’s instructions for ITR-3 have historically contemplated reporting by partners.
• It enables proper disclosure of partnership details.
• It avoids future disputes regarding the selection of return form.

Accordingly, ITR-3 continues to remain the safer and more widely accepted compliance position for partners.

4. Due Dates for AY 2026-27

A. Due Date Applicable to Directors

The due date of a director depends upon his or her own tax profile and not upon the due date applicable to the company in which directorship is held.

B. Due Date Applicable to Partners

The due date of a partner is generally linked to the due date applicable to the partnership firm or LLP.

Note

The due dates mentioned above are based on the statutory due dates presently applicable for AY 2026-27 and are subject to extension by the Central Board of Direct Taxes (CBDT) through notifications or circulars issued from time to time.

5. Key Difference Between Directors and Partners

A significant distinction exists regarding the determination of due dates.

Directors

The due date of a director is determined based on the director’s own return filing requirements and income profile. It is not linked to the due date applicable to the company merely because he or she holds the office of director.

Partners

The due date of a partner is generally linked to the due date applicable to the partnership firm or LLP. Consequently, where the firm’s accounts are required to be audited, the partner also becomes eligible for the corresponding extended due date.

This distinction is often overlooked and leads to confusion during return filing season.

6. A Note on Practical Compliance

While the Income-tax Act does not mandate return filing merely because a person is a director or partner, it is generally advisable to file the return even where income is below the maximum amount not chargeable to tax and none of the conditions under the Seventh Proviso to Section 139(1) are attracted.

Regular filing of ITR helps in:

• Obtaining bank loans and overdraft facilities.
• Visa and immigration applications.
• Financial due diligence exercises.
• Establishing financial credibility.
• Raising funds and investments.
• Maintaining a documented financial track record.
• Facilitating future tax and regulatory compliances.

Accordingly, although the law may not require filing in every case, voluntary filing is often beneficial from a commercial and practical standpoint.

Conclusion

The status of being a director or partner does not by itself create an obligation to file an Income Tax Return. The requirement to file an ITR arises only when the provisions of Section 139(1) or the Seventh Proviso thereto become applicable.

For directors, the choice between ITR-2 and ITR-3 depends upon whether income chargeable under the head “Profits and Gains of Business or Profession” exists. For partners, ITR-3 continues to remain the safer and more widely accepted compliance position.

Further, while a director’s due date is determined independently based on his or her own tax profile, a partner’s due date generally follows the due date applicable to the partnership firm or LLP.

Understanding these distinctions can help taxpayers and professionals avoid unnecessary confusion and ensure timely and accurate compliance with the provisions of the Income-tax Act, 1961.