Partnership Firm –Income Tax Return Filing
Partnership firms are categorized into two parts , The first one called registered partnership which is registered under the Partnership Act 1932 from the Registrar of Firms with limited liabilities as defined in the partnership deed and the second one is called unregistered partnership firm which is not registered from the Registrar of firms but liabilities and responsibilities remain will be the same as mentioned in the Partnership deed.
Partnership Tax Rate
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 education cess and secondary higher education cess.
Education Cess is applicable on the amount of income tax and the applicable surcharge at the rate of 2%. Secondary and higher education cess is applicable on the amount of income tax and the applicable surcharge at the rate of 1%.
Alternate Minimum Tax
Similar to a private limited company or LLP, partnership firms are also required to pay alternate minimum tax at the rate of 18.5% of “adjusted total income”. Alternate minimum tax would be increased by the applicable surcharge, education cess and secondary and higher education cess.
Partnership Firm Tax Return Filing
Partnership firms are required to file income tax return in form ITR 5. Moreover , the taxpayer should be maintained the proper books of account in order to meet the statutory compliances as per the Income tax Act.
Procedure for Filing Partnership Firm Tax Return
Income tax return of a partnership firm can be filed online through the income tax website or manually. If the income tax return is filed online, then you must provide us the digital signature of the partners and also online income tax return is mandatory to obtain an audit.
In case of manual filing, the assessee must print out two copies of Form ITR-V. One copy of ITR-V signed by the assessee, has to be sent by ordinary post to our official address and another copy to be kept for official records.
Partnership Firm Tax Return Due Date
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.
Audit Requirement for Partnership Firms
Partnership firms that conform to any of the conditions below would be required to get the accounts audited:
Carrying the business and total sales exceed by Rs.1 crore in the previous year.
- Carrying on a profession and gross receipts in profession exceed Rs.50 lakhs in any previous year.
In addition, there are other conditions applicable which could make an audit mandatory for a partnership firm.
If a partnership firm entered into international transactions or specified domestic transactions a report must be furnished in Form No. 3CEB under section 92E. For partnership firms required to furnish Form 3CEB, the deadline for filing tax return is 30th November.