Proprietorship Firm ITR Filing
Proprietorship firms are required to file income tax return as per the income tax Act -If proprietors ,below the age of 60 years and income exceeding by Rs. 2.5 lac during the financial year ending from April to March . In the case of proprietors over the age of 60 years but below 80 years, income tax filing is mandatory if total income exceeds by Rs.3 lakhs during the financial year ending March . Proprietors over the age of 80 years and above are required to file income tax return if the total income exceeds Rs.5 lac.
Tax Audit for Proprietorship Firm
Tax audit would be required for a proprietorship firm if the total sales turnover is over by 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 and also , an audit would be required for any proprietorship firm under presumptive taxation scheme irrespective of turnover if the income claimed is lower than the deemed profits and gains under the scheme.
Due Date for Proprietorship Firm 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. 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. Presumptive taxation scheme is designed to help ease the compliance burden of small businesses by assuming a set profit margin on the total income of the business or profession.
Proprietorship Tax Return Filing
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. In this article, we look at the proprietorship tax return filing procedure in detail.
Audit for Proprietorship
An audit would be required for a proprietorship firm if the total sales turnover is over by Rs.1 crore during the financial year. In the case of a professional, audit would be required if total gross receipts is more than by Rs.50 lakhs during the financial year .
Also, an audit would be required for any proprietorship firm under presumptive taxation scheme irrespective of turnover if the income claimed is lower than the deemed profits and gains under the scheme.
Audit for proprietorship for income tax purposes must be conducted by a practicing Chartered Accountant.
Due Date for Filing Proprietorship Firm 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.
In case the proprietorship entered into any international transaction with associated entities or specified domestic transaction, then Form No.3 CEB must be furnished. For proprietorship firms that are required to file Form No.3 CEB, the income tax return is due on 30th November.
Income Tax Return for Proprietorship Firms
For the assessment Year 2020-21, proprietorship firms would be required to file Form ITR-3 or Form ITR-4-Sugam.
Form ITR-3
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
Form ITR-4-Sugam can be filed by a proprietor who would like to pay income tax under the presumptive taxation scheme. Presumptive taxation scheme is designed to help ease the compliance burden of small businesses by assuming the profit margin on the basis of turnover and minimum presumptive income .