Carry out online business tax filing, tax returns of Partnership and LLPs, service tax filing on Vakilsearch. Know more about the steps involved in filling out a business tax return in this blog.
Every year, all companies doing business in India are required to file an income tax return. To remain in compliance with the Income Tax Act, a firm may be required to file a TDS return, pay advance tax, and file an income tax return. The largest tax services platform in India, IndiaFilings, offers a variety of services like incorporation, filing GST returns, submitting income taxes, and more. IndiaFilings can assist with filing your company’s income tax return and making sure it abides by the Income Tax Act and Rules. It typically takes 3 to 5 working days to prepare an income tax return for your company. Make a consultation appointment with an IndiaFilings Advisor to receive a free consultation on filing business tax returns.
Proprietorship
Every year, an income tax return must be filed by anyone with a company or professional income above ₹2.5 lakhs. For professionals and business owners, IndiaFilings offers income tax filing starting at ₹2899.
Partnership
Whether registered or unregistered, partnership firms must file an annual income tax return using form ITR 5. Partnership businesses are subject to a 30% income tax. For partnership firms, IndiaFilings offers income tax filing starting at Rs. 5899.
LLP
Small Liability Both the MCA Annual Return and the Income Tax Return in Form ITR-5 must be filed annually by partnership firms with Indian registrations. Starting at ₹7899 per company.
Every year, Income Tax Return on Form ITR-6 and MCA Annual Return must be filed by all varieties of firms with Indian registrations. For businesses, IndiaFilings offers complete compliance management beginning at ₹7899.
Filing a proprietorship tax return
Any person who earns money from a business is considered to be a proprietor of a business. In India, proprietorships are required to file an income tax return each year. The process for submitting a proprietorship’s income tax return is similar to that of filing an individual tax return because proprietorships are thought of as being one and the same as the proprietor.
Filing Requirements for Partnership Tax Returns
If total income exceeds ₹2.5 lakhs, all proprietors under the age of 60 must file an income tax return. If total income is greater than ₹3 lakh, owners who are over 60 but under 80 must file an income tax return. If the total income is more than ₹5 lakhs, owners who are 80 years of age or older must file an income tax return.
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Rate of Proprietorship Income Tax
The proprietorship income tax rate is the same as the individual income tax rate. Proprietorships are subject to slab rates of taxation as opposed to the flat rates that apply to LLPs and corporations. The income tax rate that applies to sole proprietorships for the assessment year 2019–20 if the owner is under 60 is as follows.
| Taxable Amount | Tax Rate |
|---|---|
| Rs. 0 – Rs. 2,50,000 | 0% |
| Rs. 2,50,001 to Rs. 5,00,000 | 5% |
| Rs. 5,00,001 – Rs.10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Tax Audit for Proprietorship
If a proprietorship firm’s annual total sales revenue exceeds ₹1 crore, an audit will be necessary. If total gross receipts for a professional during the financial year under assessment exceed ₹50 lakhs, an audit would be necessary.
Date by which the proprietorship tax return is due
The proprietorship’s income tax return is due on July 31 if an audit is not necessary. The 30th of September is the deadline for proprietorship income tax returns if the Income Tax Act requires an audit.
Proprietorship Tax Return
Ownership firms must file Form ITR-3 or Form ITR-4-Sugam for the assessment year 2017–18, which is specific to revenue produced in the financial year 2016–17. An owner or a Hindu Undivided Family operating a proprietary business or profession may file Form ITR-3. A proprietor who wishes to pay income tax under the presumptive taxation plan may do so by submitting Form ITR-4-Sugam.
Filing of Partnership Firm Tax Returns
Regardless of the amount of income or loss, all partnership firms must file an income tax return. According to the Income Tax Act, partnership firms are taxed as a separate legal entity. As a result, the income tax rate that applies to partnership firms is comparable to that of LLPs and Indian companies.
Requirements for Partner Firm Tax Return Filing
Regardless of profit or loss, all partnership firms are required to file an income tax return each year. A NIL income tax return must be submitted before the deadline for a partnership firm if there was no economic activity.
Tax rate on income for partnerships
30% of the total income is the income tax rate that applies to partnership firms. When total income surpasses ₹1 crore, a partnership firm is also required to pay an additional 12% income tax surcharge on the amount of income tax. A partnership firm must pay the Health & Education Cess in addition to the income tax and surcharge. A 4% health and education cess is levied on the sum of income tax and any applicable surcharge.
Alternate Minimum Tax for Partnership Firms
The minimal alternate tax that applies to partnership firms is similar to the income tax that applies to a company. There is a minimum alternate tax of 18.5% on adjusted gross income. Therefore, the income tax that a partnership firm that makes profits must pay cannot be less than 18.5%. (increased by income tax surcharge, education cess and secondary and higher education cess).
For a partnership firm, a tax audit
Partnership businesses that generate annual revenues of more than ₹1 crore are subject to undergo a tax audit. Similar to this, partnership firms that carry on a profession and had gross receipts in the prior year that exceeded ₹50 lakhs must get a tax audit. There are additional circumstances that may be present and require an audit for a partnership firm.
Date by which Partnership Firm Tax Returns are Due
For the majority of partnership businesses, the income tax return deadline is July 31 of the assessment year. The income tax return must be filed by September 30th for partnership firms that must have their accounts audited in accordance with the Income Tax Act.
For Partnership Firms Tax Return
Form ITR 5 is used to report income tax for partnership firms. A partnership business tax return does not need to be submitted with any supporting documents or declarations, as is the case with all other income tax forms, including ITR 5. However, the taxpayer is required to keep all business-related records and present them to the tax authorities upon request.
Filing LLP Tax Returns
Regardless of the amount of income or loss, all LLPs must file an income tax return. LLPs are treated as independent legal entities from their partners for tax purposes. Similar to Indian corporations incorporated there, LLPs are subject to the same income tax rate.
Filing Requirements for LLP Tax Returns
LLPs must file an income tax return each year, regardless of profit or loss. NIL income tax returns must be submitted by the deadline if there was no commercial activity.
Rate of Income Tax for LLPs
For LLPs registered in India, the appropriate income tax rate is a flat 30% on the total income. When the total income reaches ₹1 crore, an additional surcharge of 12% is added to the income tax that must be paid. A LLP’s income tax and surcharge are subject to a 4% Health & Education Cess in addition to the income tax surcharge.
Minimum LLP Alternate Tax
LLP must pay minimal alternate tax, just like a firm must pay income tax. For LLP, a minimum alternative tax of 18.5% of total adjusted income is applicable. As a result, the LLP’s income tax payment cannot be less than 18.5%. (increased by income tax surcharge, education cess and secondary and higher education cess).
Audit of taxes for LLP
LLPs must have their accounts audited by a licenced Chartered Accountant if their revenue exceeds ₹40 lakh or their contribution is greater than ₹25 lakh. Additionally, Form 3CEB must be filed by LLPs that engaged in certain Specified Domestic Transactions or international transactions with linked businesses. Chartered Accountant certification is required for Form 3CEB. The 30th of November is the deadline for LLPs that must submit Form 3CEB.
Date of the LLP Tax Return Due Date
The 31st of July is the LLP tax filing deadline in India. The deadline for LLPs to file their income tax returns is September 30th if they must obtain a tax audit.
For Partnership Firms Tax Return
LLPs are required to submit a Form ITR 5 income tax return. One of the designated partners of the LLP’s digital signature must be used when submitting Form ITR 5 online.
Filing a Company Tax Return
The filing of income tax returns is a yearly requirement for all Indian-registered businesses. The filing of corporate tax returns falls into one of two categories under the Income Tax Act: domestic companies or overseas companies. Domestic companies are entities like Private Limited Companies, Person Companies, and Limited Companies that have been registered with the Ministry of Corporate Affairs.
Filing Requirements for Business Tax Returns
No matter their annual income, profit, or loss, all Indian-registered businesses must submit income tax returns. As a result, even inactive businesses that have no transactions must file an income tax return each year.
Company Income Tax Rate
For the assessment year 2019–20, domestic businesses with total revenues of less than Rs. 250 crores in the previous year are subject to income tax at a rate of 25% of total revenues. A 30% income tax rate is applicable to businesses with a 2016–17 annual revenue of more than Rs. 250 crores. Companies must also pay a surcharge and a Health & Education Cess at a rate of 4% on top of the income tax.
Minimum Company Alternate Tax
If the company’s tax burden is less than 18.5% of book profit, then all companies are obligated to pay the minimum alternate tax at the rate of 18.5% of book profit plus surcharge and education cess.
Tax audit for the business
Regardless of turnover or profit/loss, a company’s books must be audited by a Chartered Accountant each year.
Date by which Company Tax Returns Must Be Filed
Income tax returns must be filed by all Indian corporations by September 30th, or earlier. After 18 months in the first year, businesses that were incorporated between January and March can submit an MCA annual return. The Income Tax Act, however, does not permit the same kind of exemption. As a result, even businesses that register between January and March must submit their income tax returns by September 30 of the same year.
Tax return for the business
Form ITR 6 must be submitted by Indian-registered businesses that are engaged in profitable operations. Therefore, Form ITR6 would need to be filed by Private Limited Companies, Limited Companies, and One Person Company
Consequences of Missing the ITR Filing Deadline
Missing the deadline for filing your income tax return comes with consequences:
- Late Filing Fee: You’ll face a penalty for filing your return after the due date. The amount depends on your income.
- Interest Charges: If you owe taxes, you’ll be charged interest on the unpaid amount for each month the tax remains unpaid.
- Loss of Carry Forward Benefits: One of the biggest drawbacks is losing the ability to carry forward losses from investments or businesses to offset future income and reduce your tax liability.
Income Tax Filing Due Dates for FY 2023-24 (AY 2024-25)
| Taxpayer Category | Due Date for Filing |
| Individuals, HUFs, AOPs, BOIs (without audit) | July 31, 2024 |
| Businesses Requiring Audit | October 31, 2024 |
| Businesses with International Transactions | November 30, 2024 |
| Revised Return | December 31, 2024 |
| Belated Return | December 31, 2024 |
| Updated Return | March 31, 2027 |
Important Due Dates for Paying Advance Tax Instalments for FY 2023-24
To manage your tax liability effectively, timely payment of advance tax is crucial. Here’s a breakdown of the due dates:
| Due Date | Instalment | Percentage of Total Tax |
| June 15th | First | 15% |
| September 15th | Second | 45% |
| December 15th | Third | 75% |
| March 15th | Fourth | 100% |
| March 15th | Presumptive Taxpayers | 100% |
Conclusion
Filling of business tax returns, and other returns can be complicated you need assistance. Vakilsearch is here to guide you with their professional’s expertise.
Frequently Asked Questions:
1. If a business hasn't conducted any operations, is it still required to file a tax return? 22 June 2022
1. If a business hasn't conducted any operations, is it still required to file a tax return? 22 June 2022 All businesses, regardless of whether they conducted any business operations during the fiscal year, are required to file IT returns. Companies are required to file income taxes, regardless of profit or loss. Even dormant businesses that haven't made any business choices in a year are nevertheless required to file returns.
2. Is a tax audit required before filing a business tax return? 22 June 2022
A tax audit is required for enterprises with a revenue of more than Rs. 1 crore. A tax audit is also necessary for professionals with turnovers over Rs. 50 lakhs.
3. Who Is Required to File a Business Tax Return? 22 June 2022
All qualifying enterprises operating under the Income-tax Act of 1961 and the Income-tax Rules of 1962 are required to file tax returns. The basic taxable limit is 2.5 lakh; if a firm's business income before deductions exceeds this amount, a business tax return must be filed.
4. What are the various formats for filing business tax returns? 22 June 2022
The names of the various business entities that are permitted to submit these returns—i.e., the various business structures—are based on the various forms of business tax return filing. Filing a single proprietorship tax return submitting a partnership company tax return Small Liability submitting a partnership tax return filing of corporate tax returns
5. Is it possible to file an ITR for the prior year? 22 June 2022
You can submit a delayed ITR up to a year after the end of the applicable assessment year, thus the answer is yes. Tax returns may be filed up to three years after the due date.
6. How to claim an income tax refund after the due date?
You can claim a refund even if you file your return after the due date (belated return). However, you'll be charged a penalty for late filing. Ensure you have all necessary documents and follow the process outlined on the income tax department's website.
7. How to pay income tax after the due date?
If you haven't paid your income tax by the due date, you can still pay it online through the income tax department's portal. However, you'll be charged interest on the unpaid amount. It's crucial to pay the outstanding tax as soon as possible to minimise interest charges.
8. What is the last date to file ITR?
The last date to file an income tax return for most individuals is July 31st of the following financial year. However, there are different deadlines for different categories of taxpayers, such as businesses requiring audits or those with international transactions.
9. Whether the penalty and interest both are imposed for late filing of Income Tax Return?
Yes, both a penalty and interest can be imposed for late filing of an income tax return. The penalty is a fixed amount, while the interest is calculated based on the unpaid tax amount and the number of days of delay.
10. What is the earliest date to file an Income Tax Return?
While there's no specific earliest date to file an income tax return, it's generally advisable to wait until you have all the necessary documents and information to avoid errors and potential corrections. However, filing early can help you avoid the last-minute rush.
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