ITR 7- How to file ITR-7 Online for FY 2024-25 (AY 2025-26)

The filing season for Income Tax Returns is upon us once again, and for specific organizations like charitable trusts, political parties, research institutions, and educational entities, ITR-7 is the designated form. With the Central Board of Direct Taxes (CBDT) having notified the ITR forms for the Assessment Year 2025-26, it’s crucial for eligible entities to understand the intricacies of filing ITR-7 correctly and on time. This comprehensive guide walks you through everything you need to know about ITR-7 filing for the Financial Year 2024-25 (Assessment Year 2025-26).

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The Income Tax Act of 1961 mandates that taxpayers file their returns using the appropriate ITR form within the specified deadlines. For organizations claiming exemptions under specific sections, ITR-7 is the designated form that must be completed accurately to avoid penalties and ensure compliance with tax regulations. Filing an incorrect or incomplete ITR can lead to serious consequences, including legal complications and financial penalties.

Understanding ITR-7: Who Needs to File This Form?

ITR-7 is specifically designed for entities seeking tax exemptions under particular sections of the Income Tax Act. Unlike other ITR forms meant for individuals or businesses, ITR-7 caters to organizations with charitable, educational, religious, or political purposes. The comprehensive nature of this form allows the tax department to thoroughly assess the financial activities of these exempt entities.

Entities Required to File ITR-7.

• Charitable or Religious Trusts – Entities registered under Section 139(4A) with income from properties held for charitable or religious purposes.
• Political Parties – Organizations registered under Section 139(4B) that engage in political activities and maintain accounts of their income and expenditure.
• Scientific Research Institutions – Entities falling under Section 139(4C) that conduct scientific research and development activities.
• Educational Institutions – Universities, colleges, and other educational entities covered under Section 139(4D).
• Medical Institutions – Hospitals, clinics, and other healthcare facilities claiming exemptions.
• Trust Property Beneficiaries – Individuals receiving income from properties held in trust for charitable purposes.
• Government and Non-Government Educational Bodies – Institutions mentioned in Sections 10(23A) and 10(23B) of the Income Tax Act.

Recent statistics from the Income Tax Department indicate that over 2.3 lakh entities filed ITR-7 for the previous assessment year, with charitable trusts constituting nearly 68% of these filers. This underscores the significant role these organizations play in India’s socio-economic landscape.

ITR-7 Form Structure.

The ITR-7 form for AY 2025-26 has been meticulously structured to capture comprehensive details about exempt organizations. Understanding this structure is essential for accurate filing:

Part A: General Information.

This section requires basic identification details about the organization, including:

• Name as mentioned in incorporation documents
• PAN (Permanent Account Number)
• Complete address and contact information
• Date of formation/incorporation
• Status and sub-status of the entity
• Section under which return is being filed (139(4A), 139(4B), 139(4C), or 139(4D))
• Section under which exemption is claimed
• Details of projects/institutions run by the assessee
• Registration or approval information under the Income Tax Act and other relevant laws

Part B: Income and Tax Computation.

This section provides a detailed outline of the organization’s total income and tax computation. It includes:

• Part B-TI: Calculation of total income
• Part B1: For entities claiming exemptions under Sections 11 and 12 or Sections 10(23C)(iv), 10(23C)(v), 10(23C)(vi), and 10(23C)(via)
• Part B2: For entities claiming exemptions under Sections 13A/13B and various other subsections of Section 10
• Part B3: For organizations whose total taxable income falls under the twenty-second proviso to Section 10(23C) or Section 13(10)
• Part B-TTI: Calculation of tax liability on total income

23 Schedules in ITR-7: Explained.

• Schedule-I: Provides details of funds that have been accumulated or set aside as per Section 11(2) in previous years relevant to the current assessment year.
• Schedule-IA: Lists out accumulated income that was taxed in earlier assessment years according to Section 11(3).
• Schedule-D: Captures information about the deemed application of income under Section 11(1) Explanation 1, Clause (2).
• Schedule-DA: Shows details of accumulated income taxed in earlier years under Section 11(1B).
• Schedule-J: A statement reflecting the investments of all funds held by the trust or institution as on the last day of the previous financial year.
• Part A-BS: Presents the sources and application of funds as of 31st March 2022.
• Schedule-R: Reconciles the corpus funds as reported in Schedule J and the balance sheet.
• Schedule-LA: Specific details required for political parties.
• Schedule-ET: Specific details required for Electoral Trusts.
• Schedule-VC: Details of all voluntary contributions received by the organization.
• Schedule-AI: Shows the total income earned during the year, excluding voluntary contributions.
• Schedule-A: Amounts that have been applied towards the objectives of the trust or institution during the previous year, from all sources.
• Schedule IE-1, IE-2, IE-3, IE-4: Income and expenditure statements, as applicable to the organization.
• Schedule-HP: Calculation of income from house property.
• Schedule-CG: Calculation of capital gains income.
• Schedule-VDA: Reporting of income from the transfer of virtual digital assets under Section 115BBH.
• Schedule-OS: Calculation of income from other sources.
• Schedule-OA: General information about any business or professional activities carried out.
• Schedule-BP: Calculation of income from “profits and gains of business or profession.”
• Schedule-CYLA: Statement showing income after setting off current year’s losses.
• Schedule-PTI: Details of pass-through income from business trusts or investment funds under Sections 115UA and 115UB.
• Schedule-SI: Statement of income that is taxed at special rates.
• Schedule-115TD: Reporting of accreted income under Section 115TD.
• Schedule-115BBI: Reporting of specified income for certain institutions under Section 115BBI.
• Schedule-FSI: Details of income that accrues or arises outside India.
• Schedule-TR: Details of taxes paid outside India.
• Schedule-FA: Information about foreign assets held.
• Schedule-SH: Disclosure of shareholding in unlisted companies.

Critical Deadlines: When to File ITR-7 for FY 2024-25.

Meeting the ITR filing deadlines is crucial for avoiding penalties and interest charges. For the Financial Year 2024-25 (Assessment Year 2025-26), the key dates are:

• July 31, 2025: Standard deadline for entities not required to get their accounts audited
• October 31, 2025: Deadline for entities required to undergo audit, including most companies
• November 30, 2025: Extended deadline for entities with international transactions requiring transfer pricing reports
• December 31, 2025: Last date for filing belated or revised returns

A recent study by the Finance Ministry revealed that approximately 22% of ITR-7 filers submitted their returns after the original deadline in the previous assessment year, resulting in avoidable penalties. Planning your filing process well in advance can help you avoid such situations.

Step-by-Step Guide to Online ITR-7 Filing.

Filing ITR-7 electronically is now the standard approach recommended by the Income Tax Department. Here’s a comprehensive guide to navigate the process:

1. Registration and Login.

• Visit the official Income Tax e-filing portal
• Login using your PAN and password
• If you’re a new user, register by providing the required details

2. Dashboard Navigation.

• After logging in, navigate to the “e-File” menu
• Select “Income Tax Return” from the dropdown menu
• Choose the relevant assessment year (2025-26)

3. Form Selection and Basic Details.

• Select ITR-7 as your form type
• Choose the correct filing mode (Original/Revised Return)
• Enter your basic details as requested in Part A-General

4. Filling the Required Sections.

Part A Completion:

• Provide all general information about your organization
• Enter registration/approval details meticulously
• Specify the section under which exemption is claimed

Part B Completion:

• Enter income details as applicable
• Complete the relevant part (B1, B2, or B3) based on your exemption category

Schedule Completion:

• Fill in all applicable schedules based on your organization’s financial activities
• Ensure mathematical accuracy across related schedules
• Cross-verify totals between schedules and main form sections

5. Income and Tax Calculation.

• The system will calculate your tax liability based on the entered information
• Review the calculations for accuracy
• Address any discrepancies before proceeding

6. Payment of Taxes (if applicable).

• If any tax is payable, complete the payment through the portal
• Record your payment details for reference
• Update the tax payment information in the relevant section of the form

7. Verification Process.

The verification step is crucial and can be completed through any of these methods:

• Digital Signature Certificate (DSC): Mandatory for political parties
• Electronic Verification Code (EVC): Generated through pre-validated bank account or Aadhaar OTP
• Aadhaar OTP: One-time password sent to your Aadhaar-linked mobile number
• ITR-V Form: If using this method, print two copies of the ITR-V after submission

For verification through ITR-V, one signed copy must be sent to:
Centralised Processing Centre,
Income Tax Department,
Bengaluru – 560500, Karnataka
The second copy should be retained for your records.

Common Challenges in ITR-7 Filing and How to Overcome Them.

1. Registration Details Discrepancies.

Challenge: Incorrect or incomplete registration information can lead to exemption rejection.
Solution: Keep all registration certificates handy before starting the filing process. Double-check the registration numbers, dates, and approving authorities before submission.

2. Schedule Coordination Issues.

Challenge: The numerous schedules in ITR-7 must align perfectly with each other and with the main form.
Solution: Start by preparing a comprehensive reconciliation of all financial statements before beginning the filing process. Cross-check totals across schedules to ensure consistency.

3. Application of Income Requirements.

Challenge: For charitable trusts, proving the application of income for charitable purposes is often scrutinized.
Solution: Maintain detailed records of all expenditures, categorizing them clearly as revenue or capital expenditure. Ensure that the application of income meets the 85% threshold if not opting for accumulation.

4. Complex Audit Requirements.

Challenge: Understanding when an audit is required and ensuring timely completion.
Solution: Entities with income exceeding ₹1 crore or those claiming certain types of exemptions need to undergo an audit. Engage a chartered accountant familiar with trust taxation early in the financial year.

Recent Changes in ITR-7 for Assessment Year 2025-26.

• Extended Time for Updated Returns: Budget 2025 has extended the timeline for filing Updated Income Tax Returns (ITR-U) from two years to four years. This means returns for FY 2023-24 can now be updated until March 31, 2029.
• Enhanced Disclosure Requirements: Organizations must now provide more detailed information about their activities, especially those related to general public utility under Section 2(15).
• Digital Verification Emphasis: The tax department is increasingly moving away from physical verification processes, with greater emphasis on digital signatures and electronic verification codes.
• Foreign Assets Reporting: Enhanced disclosure requirements for organizations with foreign assets or international contributions, aligned with FCRA regulations.
• Virtual Digital Assets Schedule: Introduction of Schedule VDA for reporting income from transfer of virtual digital assets under Section 115BBH.

Practical Examples: Understanding ITR-7 Filing Through Case Studies.

Case Study 1: Educational Trust with Multiple Sources of Income.

• Organization Profile: Educational trust running three schools, annual income: ₹5.2 crores, sources: Fees (₹4 crores), Donations (₹80 lakhs), Rental income (₹40 lakhs)
• Key Filing Considerations: Filed under Section 139(4A), claimed exemption under Section 10(23C)(vi), required audit under Section 12A(1)(b), applied 87% of income for educational purposes, accumulated ₹65 lakhs for future expansion
• Form Filling Strategy: Detailed disclosure of all three schools in Part A, comprehensive breakdown of fee structure in Schedule AI, separation of corpus and non-corpus donations in Schedule VC, detailed capital expenditure documentation in Schedule A, Form 10 filing for accumulated amount with specific purpose declaration

Case Study 2: Religious Trust with Property Income.

• Organization Profile: Temple trust with ancient properties, annual income: ₹1.8 crores, sources: Donations (₹1.2 crores), Property rent (₹60 lakhs)
• Key Filing Considerations: Filed under Section 139(4A), claimed exemption under Section 11, detailed documentation of historical property maintenance as charitable purpose, corpus donations clearly segregated
• Form Filling Strategy: Proper documentation of registration under religious endowment acts, detailed breakdown of anonymous donations below ₹10,000, Schedule HP completion for rental properties, clear segregation of religious activities expenditure in Schedule A

Expert Tips for Error-Free ITR-7 Filing.

• Start Early: Begin collecting necessary documents and planning your ITR-7 filing at least 3 months before the deadline.
• Maintain Clear Records: Keep separate ledgers for corpus donations, specific purpose donations, and general donations.
• Reconcile Financial Statements: Ensure your balance sheet, income and expenditure statement, and receipt and payment account are perfectly reconciled before starting.
• Document Application of Income: Maintain clear documentation of how income was applied toward the organization’s stated objectives.
• Stay Updated: Tax laws for exempt organizations change frequently. Subscribe to tax notifications or engage a tax professional to stay informed.
• Pre-filing Verification: Before final submission, verify critical information such as PAN details, bank account information, registration numbers and dates, tax payment challan details.
• Backup Documentation: Maintain comprehensive supporting documents for at least 8 years after filing.

Frequently Asked Questions.

Q1: Can individuals file ITR-7?

No, individuals cannot file ITR-7 in their personal capacity. However, trustees or authorized representatives can file ITR-7 on behalf of eligible organizations. Individuals should use ITR-1, ITR-2, or ITR-3 as applicable to their income sources.

Q2: What happens if an organization files the wrong ITR form?

Filing the incorrect ITR form can lead to your return being treated as defective under Section 139(9). The Income Tax Department may issue a notice asking you to rectify the defect by filing the correct form within a specified timeframe. Failure to do so may result in your return being treated as invalid.

Q3: Is a digital signature mandatory for all ITR-7 filers?

Digital signatures are mandatory for political parties filing ITR-7. For other organizations, electronic verification through Aadhaar OTP or EVC is also acceptable. However, using a digital signature is recommended for larger organizations as it provides an additional layer of security.

Q4: Can accumulated income from previous years be used in the current year?

Yes, accumulated income from previous years (under Section 11(2)) can be utilized in the current year for specified purposes. However, proper documentation of such utilization must be maintained and reported in Schedule IA of ITR-7.

Q5: How do charitable organizations report corpus donations in ITR-7?

Corpus donations should be reported in Schedule VC under the appropriate column for “Corpus Fund Donation.” These donations are not considered as income of the trust and hence not taxable, provided they are invested or deposited as specified in Section 11(5).

Q6: What is the penalty for late filing of ITR-7?

For late filing of ITR-7, a fee under Section 234F applies:
– ₹5,000 if filed after the due date but before December 31, 2025
– ₹10,000 if filed after December 31, 2025
Additionally, interest under Section 234A applies at 1% per month on any unpaid tax liability.

Q7: Can an organization claim carry forward of losses in ITR-7?

Yes, certain losses can be carried forward even by exempt organizations, particularly those from house property or capital gains. These should be properly reported in Schedule CYLA and can be set off against future income of the same category.

Q8: Is it mandatory to file audit report before submitting ITR-7?

Yes, for organizations requiring audit (such as those with income exceeding ₹1 crore), the audit report must be filed one month before the ITR filing deadline. For AY 2025-26, if the ITR deadline is October 31, 2025, the audit report must be filed by September 30, 2025.

Q9: How should foreign contributions be reported in ITR-7?

Foreign contributions should be reported in Schedule VC, clearly marking them as foreign contributions. Additionally, organizations receiving foreign contributions must comply with FCRA regulations and mention their FCRA registration details in Part A General of ITR-7.

Q10: Can an ITR-7 be revised after submission?

Yes, ITR-7 can be revised if you discover any omission or error after filing. The revised return must be filed before the end of the relevant assessment year or before completion of assessment, whichever is earlier. For FY 2024-25 (AY 2025-26), a revised return can be filed until December 31, 2025.

By understanding these intricacies of ITR-7 filing for FY 2024-25, eligible organizations can ensure compliance with tax regulations while correctly availing themselves of the exemptions they’re entitled to. Remember that proper documentation, accurate reporting, and timely filing are the keys to a smooth tax compliance process.

Disclaimer: This article is for informational purposes only and does not constitute legal or financial advice. The details provided are based on current laws and notifications as of the date of publication. Readers are advised to consult a qualified tax professional or the official Income Tax Department for the latest updates and for guidance specific to their organization.

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C.K. Gupta

Hello, I am C.K. Gupta Founder of Taxgst.in, a seasoned finance professional with a Master of Commerce degree and over 20 years of experience in accounting and finance. My extensive career has been dedicated to mastering the intricacies of financial management, tax consultancy, and strategic planning. Throughout my professional journey, I have honed my skills in financial analysis, tax planning, and compliance, ensuring that all practices adhere to the latest financial regulations. My expertise also extends to auditing, where I focus on maintaining accuracy and integrity in financial reporting. I am passionate about using my knowledge to provide insightful and reliable financial advice, helping businesses optimize their financial strategies and achieve their economic goals. At Taxgst.in, I aim to share valuable insights that assist our readers in navigating the complex world of taxes and finance with ease.