Business Tax Return Filing

All businesses operating in India are required to file income tax return each year. In addition to filing income tax return, a business may also be required to file TDS return and pay advance tax to stay compliant under the Income Tax Act. IndiaBizFiling is India’s largest tax services platform offering a range of services like incorporation, GST return filing, income tax filing and more. IndiaBizFiling can help file income tax return for your business and ensure it remains compliant under the Income Tax Act and Rules. The average time taken to file an income tax return for your business is 3 to 5 working days. Get a free consultation on business tax return filing by scheduling an appointment with an IndiaBizFiling Advisor.

Proprietorship

Any person having business or professional income of more than Rs.2.5 lakhs per year would be required to file income tax return each year. IndiaBizFiling offers income tax filing for professionals and proprietors from Rs.2899

Partnership

Partnership firms (registered or unregistered) are required to file income tax return in form ITR 5 each year. Partnership firms attract income tax at the rate of 30%. IndiaBizFiling offers income tax filing for partnership firms from Rs.5899

LLP

Limited Liability Partnership firms registered in India are required to file Income Tax Return in Form ITR-5 each year and MCA Annual Return. IndiaBizFiling offers comprehensive compliance management for LLPs starting from Rs.7899

Companies

All types of companies registered in India are required to file Income Tax Return in Form ITR-6 each year and MCA Annual Return. IndiaBizFiling offers comprehensive compliance management for companies starting from Rs.7899

Proprietorship Tax Return Filing

Any individual who has business income is said to be operating a proprietorship firm. Proprietorships operating in India are required to file income tax return each year. Since proprietorships are considered to be one and same as the proprietor, the income tax return filing procedure for a proprietorship is similar to individual income tax return filing.

Requirement for Filing Proprietorship Tax Return

All proprietors below the age of 60 years are required to file income tax return if total income exceeds Rs. 2.5 lakhs. In the case of proprietors over the age of 60 years but below 80 years, income tax filing is mandatory if total income exceeds Rs.3 lakhs. Proprietors over the age of 80 years and above are required to file income tax return if the total income exceeds Rs.5 lakhs.

Income Tax Rate for Proprietorship

The income tax rate for proprietorship is the same as the income tax rate for individuals. Unlike the income tax rate for LLP or Company which are flat rates, proprietorships are taxed on slab rates. The following is the income tax rate applicable for proprietorships for assessment year 2019-20, wherein the age of the proprietor is less than 60.

Tax Audit for Proprietorship

An audit would be required for a proprietorship firm if the total sales turnover is over Rs.1 crore during the financial year. In the case of a professional, audit would be required if total gross receipts is more than Rs.50 lakhs during the financial year under assessment.

Due Date for Filing Proprietorship Tax Return

The income tax return of a proprietorship that doesn’t require audit is due on 31st July. In case the income tax return of a proprietorship needs to be audited as per Income Tax Act, then the return would be due on 30th September.

Tax Return for Proprietorships

For the assessment year 2017-18 only, which relates to income earned in Financial Year 2016- 17, proprietorship firms would be required to file Form ITR-3 or Form ITR-4-Sugam. Form ITR-3 can be filed by a proprietor or a Hindu Undivided Family who is carrying out a proprietary business or profession. Form ITR-4-Sugam can be filed by a proprietor who would like to pay income tax under the presumptive taxation scheme.

Partnership Firm Tax Return Filing

All partnership firm are required file the income tax return, irrespective of amount of income or loss. Partnership firms are taxed as a separate legal entity under the Income Tax Act. Hence, the income tax rate applicable for partnership firms is similar to LLPs and Companies registered in India.

Requirement for Filing Partnership Firm Tax Return

All partnership firms are required to file income tax return each year, irrespective of income or loss. If there was no business activity, then a NIL income tax return must be filed before the due date for a partnership firm.

Income Tax Rate for Partnership Firms

Partnership firms are liable to pay income tax at the rate of 30% of total income. In addition to the income tax, a partnership firm is liable to pay income tax surcharge on the amount of income tax at the rate of 12%, when total income exceeds Rs.1 crores. In addition to the income tax and surcharge, a partnership firm must pay Health & Education cess. Health & Education Cess is applicable on the amount of income tax and the applicable surcharge at the rate of 4%.

Minimum Alternate Tax for Partnership Firms

Similar to income tax applicable for a company, partnership firms are subject to minimum alternate tax. A minimum alternate tax of 18.5% of adjusted total income is applicable. Hence, income tax payable by a partnership firm having profits cannot be less than 18.5 per cent (increased by income tax surcharge, education cess and secondary and higher education cess).

Tax Audit for Partnership Firm

Partnership firms carrying on business with a total sales of over Rs.1 crore are required to obtain tax audit. Similarly, partnership firms, carrying on a profession wherein gross receipts in profession exceed Rs.50 lakhs in the previous year are required to obtain tax audit. In addition, there are other conditions applicable which could make an audit mandatory for a partnership firm.

Due Date for Filing Partnership Firm Tax Return

The income tax return due date for most partnership firms is July 31 of the assessment year. Partnership firms required to get its accounts audited under the income tax Act must file the income tax return before the September 30th deadline.

Tax Return for Partnership Firms

Partnership firms are required to file income tax return in form ITR 5. Like all other income tax forms, ITR 5 is an attachment less form and there is no requirement for submitting any documents or statements along with a partnership firm tax return. However, the taxpayer must save all records pertaining to the business and produce the same before tax authorities when requested.

LLP Tax Return Filing

All LLPs are required file the income tax return, irrespective of amount of income or loss. LLPs are a separate legal entity and are taxed separately from the Partners of the LLP. The income tax rate applicable for LLPs is similar companies registered in India.

Requirement for Filing LLP Tax Return

All LLPs are required to file income tax return each year, irrespective of income or loss. If there was no business activity, then a NIL income tax return must be filed before the due date.

Income Tax Rate for LLPs

The income tax rate applicable for LLP registered in India is a flat 30% on the total income. In addition to the income tax, a surcharge is levied on the income tax payable at the rate of 12% when the total income exceeds Rs.1 crore. In addition to income tax surcharge, a Health & Education cess at 4% is also applicable on the income tax and surcharge of a LLP.

Minimum Alternate Tax for LLP

Similar to income tax applicable for a company, LLP is also subject to minimum alternate tax. A minimum alternate tax of 18.5% of adjusted total income is applicable for LLP. Hence, income tax payable by LLP cannot be less than 18.5 per cent (increased by income tax surcharge, education cess and secondary and higher education cess).

Tax Audit for LLP

LLP whose turnover exceeded Rs. 40 Lakh or whose contribution exceeded Rs. 25 Lakh are required to get their accounts audited by a practising Chartered Accountant. In addition, LLPs that entered into an international transaction with associated enterprises or undertook certain Specified Domestic Transactions are required to file Form 3CEB. Form 3CEB must be certified by a Chartered Accountant. LLPs required to file Form 3CEB have 30th November as the deadline for LLP tax filing.

Due Date for Filing LLP Tax Return

The deadline for LLP tax filing in India is July 31st. LLPs that are required to obtain a tax audit have 30th September as deadline for filing income tax return.

Tax Return for Partnership Firms

LLPs must file income tax return using Form ITR 5. Form ITR 5 must be filed online using the digital signature of one of the designated partner of the LLP.

Company Tax Return Filing

All companies registered in India are required to file income tax returns each year. Under the Income Tax Act, company tax return filing falls under two categories, namely domestic company or foreign company. Companies registered with the Ministry of Corporate Affairs like Private Limited Company, One Person Company or Limited Company are classified as a domestic company.

Requirement for Filing Company Tax Return

All companies registered in India are required to file income tax returns each year, irrespective of income, profit or loss. Hence, even dormant companies with no transactions are required to file income tax return each year.

Income Tax Rate for Company

For assessment year 2019-20, Income tax rate of 25% of total income is applicable for domestic companies having total turnover of less than Rs.250 crores in the year 2016-17. For companies having a turnover of more than Rs.250 crores in the year 2016-17, income tax rate of 30% is applicable. In addition to the income tax, companies are required to pay surcharge and Health & Education Cess at 4% on income tax and surcharge.

Minimum Alternate Tax for Company

All companies are required to pay minimum alternate tax at the rate of 18.5% of book profit plus surchage and education cess, if the tax liability of the company is less than 18.5% of book profit.

Tax Audit for Company

The accounts of a company must be audited each year by a Chartered Accountant, irrespective of turnover or profit/loss.

Due Date for Filing Company Tax Return

All companies registered in India are required to file income tax return on or before the 30th of September. Companies incorporated between January – March can file MCA annual return after 18 months in the first year. However, the same type of exemption is not available under the Income Tax Act. Hence, even companies registered from January – March must file income tax return on or before 30th September of the same calendar year.

Tax Return for Company

Companies registered in India and operating a business for profit must file Form ITR 6. Hence, private limited companies, limited companies and one person companies would be required to file Form ITR6.

Business Tax Return Filing FAQ’s

1. Is it necessary for a company to file a tax return if it has not carried out any operations?

IT returns must be filed by all companies, whether they have engaged in any business activities in the financial year or not. Regardless of profit or loss, companies need to file income tax. Companies that are dormant and have undertaken no business decisions in a year are still expected to file returns.

2. Is Tax Audit mandatory for business tax return filing?

For businesses with a turnover above Rs. 1 crore, a tax audit is mandatory. Similarly, for professionals with turnovers of Rs. 50 lakhs also require a tax audit.

3. Who Should File Business Tax Return?

Tax file return is compulsory for all qualified businesses operating under Income-tax Act, 1961/ Income-tax Rules, 1962. 2.5 lakh is the basic taxable limit, if the business income before the deduction is above 2.5 lakh then such a firm needs to file the business tax return.

4. What are the different types of Business Tax Return Filing?

The different types of business tax return filing are named based on business entities that are entitled to file these returns, i.e. different structure of businesses and their names accordingly.

• Sole proprietorship tax return filing
• Partnership firm tax return filing
• Limited Liability Partnership tax return filing
• Company tax return filing

5. Can ITR be filed for the previous year?

Yes, you can file belated ITRs, anytime up to one year from the end of the relevant assessment year. You can submit tax returns up to three years late.

6. For AY 2022-2023 Returns & Forms Applicable applicable to Individual who has business Income?

 ITR-3 – Applicable for Individual & HUF

• ITR-4 (SUGAM) – Applicable for Individual, HUF & Firm (Other than LLP)
• Form 16A & Form 26AS
• Form 3CB-CD & Form 3CEB
• Form 15G& Form 15

7. Who should pay advance tax?

If the total tax liability is Rs.10000 or more in a Financial Year, then the (taxpayer) businessman has to pay advance tax in 4 installments:

• 15 June
• 15 September
• 15 December
• 15 Marc

8. How Income Tax Is Calculated On Business Income?

Normal provision and presumptive taxation are two different ways to calculate the taxable business income. With normal provision, the taxable income is calculated by deducting the cost of sold goods and expenses from the total sales.

9. What are the criteria for opting for the Presumptive Taxation Scheme?

Small businesses or firms that do not maintain books of accounts can opt for Presumptive Taxation. For businesses, the option is available for turnover or receipts up to Rs.2 Crore. Businesses opting this scheme should offer at least 8% of the turnover or receipts as income and 6% in case of payment via banking channels & electronic mode

10. With presumptive taxation, the taxable income is a fixed percentage of the total sales. What Are the Tax Rate For Businesses?

For instance, if you own a business and are below 60 years, your income tax for business in India will be based on these slabs:

• Income up to Rs. 2.5L- NIL
• Income between Rs. 2.5-5L lakh- 5%
• Income between Rs. 5-10L- 20%
• Income above Rs. 10L – 30