Proprietorship Tax Return Filing

An Overview of ITR Filing for Proprietorship Firm

Proprietors also have to pay taxes on their income, the same as other business structure owners. Proprietorship and its proprietor are regarded as one entity. Therefore they are liable to pay taxes on their total income. This also results in the same laws governing the proprietor’s income tax and the proprietorship’s taxes.

The registered companies are charged taxes at a fixed rate depending on their business structure and other factors. However, proprietorships being a single entity will not be set as a company. The charging basis of the taxes for proprietors is the same as all the individual taxpayers in the country. As per the Income Tax regulations of the country, the income tax of the proprietors is also eligible for deduction.

What are the eligibility Criteria for Proprietorship Tax Return Filing?

• All proprietors under the age of 60 and with an annual income exceeding three lakhs are liable to pay Income Tax Return.
• If the owners above the age of 60 and under 80 have an income above three lakhs then they must file income tax.
• If the payment of proprietors above 80 exceeds five lakhs per annum, they have to file proprietorship tax returns.

On meeting certain conditions, Sections 10A, 10B, 80-IA, 80-IAB, 80-IB, and 80-IC will provide deductions.

What are the Documents Required for Income Tax Return Filing?

The following documents are required for ITR filing as a sole proprietor:

• PAN card of the proprietor
• Aadhar card of the proprietor
• Bank account details of the proprietor
• Form 16, 16A and 26AS
• Advance tax payment challan

Income Tax Slab Rate for Fy 2021-22 (Ay 2022-23) Updated With New Tax Regime

The advantages of filing IT returns are:

How to Complete Proprietorship Tax Return Filing

A proprietorship’s income tax must be filed annually without fail since it is the proprietor’s tax. Income tax returns will be filed using the E-sign of the proprietor. You will need to submit two forms depending on the proprietorship type. In the beginning, you will need to submit all the required documentation, including your PAN card, to our experts.

• For proprietorships run by Hindu undivided families (HUFs) or other owners, please use ITR 3
• Those proprietorships that fall under presumptive tax schemes use the ITR 4 form. In addition to reducing compliance burdens for small businesses, this form allows for deductions for HUFs.

Following that, our experts will register it on the official portals. The assessment year and ITR filing type will be selected depending on the scenario. After completing the process, you will receive the confirmation you need.

Due Date for ITR of Proprietorship Firm

Any losses in the business can be carried forward if the proprietor maintains timely payment of the taxes

• In case of Income tax return filing wherein the audit is not necessary, the date of payment is 31 July every year
• In case of Income tax return filing wherein the audit is necessary, the date of payment is 31 October every year

Audit for Proprietorship

As per the Income Tax Act of 1961a certified Chartered Accountant must perform the audit of the proprietorship firm. Auditing is necessary depending on the following turnover thresholds under the following conditions:-

• If the turnover of the proprietorship’s firm exceeds one crore during that assessment year
• If the total receipts of the business are worth more than 50 lakhs, then also an audit is required.
• In the case of proprietorships subject to any presumptive tax scheme, an audit is required necessary regardless of the annual turnover.

Frequently Asked Questions