ITR Filing for Proprietorship Firm Made Easy at Vakilsearch!


Vakilsearch provides holistic support when it comes to ITR filing for proprietorship firm, starting from data collection to filing your tax return we have got you completely covered!

Get Expert Assisted Tax Filing. Starts at ₹1499/-
  1. Simple 3 step process
  2. Completely Online
  3. Assisted by Income tax Experts
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How Vakilsearch Can Help With ITR for Proprietorship Firm

Based on the annual turnover you have to file ITR of proprietorship firm tax returns, and by choosing Vakilsearch you can finish this process in just 3 easy steps!

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Our expert team will get in touch with you. They will resolve all your queries and collect the required information

Step 1

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If required we will help you with the auditing and check for all the compliance with the IT department.

Step 2

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Vakilsearch will file the proprietorship tax return filing on your behalf and continue to update the status until it is done

Step 3

ITR Filing for Proprietorship Firm - An Overview

Just like other incorporated firms such as partnerships and LLPs, proprietors also must pay tax on their earnings. As per the law proprietorship and the proprietor are considered as a single entity and are subjected to income tax returns. As a result, the laws that control the payment of the proprietor's income tax also apply to the proprietorship.

However, the income tax rates of the registered companies are fixed based on flat rates. On the other hand, a single proprietorship will not be taxed as a different legal entity. All the business owners should file their taxes as an individual return like other individual taxpayers of the country. Based on the Income-tax rules and the slab rates the proprietorship tax is also subjected to the deduction.

Eligibility Criteria for Proprietorship Tax Return Filing

  • If the total income exceeds ₹3 lakhs, all owners under the age of 60 are required to file an income tax return under the Income Tax Act
  • If the income exceeds ₹3 lakhs, owners above the age of 60 must file income tax
  • If the total income exceeds ₹3 lakhs, proprietors under the age of 80 must pay income tax
  • If the income exceeds ₹5 lakhs, proprietors above the age of 80 are required to file proprietorship tax returns.

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

Documents Required

As a sole proprietor, the following documents are required for ITR filing:

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

Income Tax Slab for Proprietorship Firm 2020-2021

The advantages of filing IT returns are:

Income rangeTax rate
₹0- ₹2,50,000NIL
₹2,50,001- ₹5,00,0005%
₹5,00,001-₹7,50,00010%
₹7,50,001- ₹10,00,00015%
₹10,00,00-₹12,50,00020%
₹12,50,000- ₹15,00,00025%
Above ₹15,00,00030%

When it comes to filing a sole proprietorship income tax return the proprietors age should be within the 60 to 80 years in the previous financial year

Income SlabIncome Tax Rate
Up to ₹3,00,000NIL
₹3,00,000 to ₹5,00,0005% of the total income above ₹3,00,000
₹5,00,000 to ₹10,00,000₹10,000+20 % of the total income above ₹5,00,000
Above ₹10,00,000₹1,10,000 + 30% of the total income above ₹10,00,0000

If the age of the proprietor is more than 80 the following tax slab is used

Income SlabIncome Tax rate
Up to ₹5,00,000NIL
₹5,00,000 to ₹10,00,00020% of the total income above ₹5,00,000
Above ₹10,00,000₹1,00,000 +30% of the total income above ₹10,00,000

Irrespective of the age if the sole proprietorship form is a nonresident then the following tax slab is used

Income SlabIncome Tax Rate
Up to ₹2,50,000NIL
₹2,50,000 to ₹5,00,0005% of the total income above ₹2,50,000
₹5,00,000 to ₹10,000,000₹12,500 + 20% of the total income above ₹5,00,000
Above ₹10,00,000₹1,12, 500 + 30 of the total income above ₹10,00,000

How to Complete Proprietorship Tax Return Filing

The income tax of the proprietorship is the proprietor's income tax and it is crucial to be filed every year without fail. The E-sign of the proprietor will be used to file the income tax return. Based on the type of proprietorship you will have to submit two different forms. Initially, you will have to submit all the required documents including your PAN card to our experts

  • ITR-3 Form: If the proprietorship is run by a hindu undivided family (HUF) or any other owner
  • ITR-4 Form: This one is used by proprietorships that are subject to presumptive tax schemes. Filing this form will reduce the burden of compliance for small businesses and still provide you with the deductions of HUFs.

Subsequently, our experts will register it in the official portals. The assessment year and ITR filing type will be chosen based on the scenario. You will be provided the required confirmation after completing the process.

Due Date for ITR of Proprietorship Firm

Losses in the business, if any, can be carried forward if the proprietor files an income tax return before the deadline.

  • Income tax return filing wherein the audit is not necessary 31 July of every year
  • Income tax return filing wherein the audit is necessary on 31 October of every year.

Audit for Proprietorship

Depending on the annual turnover of the proprietorship, auditing may be necessary under the following scenarios.

  • During the assessment year, the turnover of the proprietorship firm conducting business exceeds ₹1 crore
  • In the case of a professional proprietorship, an audit is required if the total receipts of the business exceed ₹50 lakh
  • An audit is required whenever a proprietorship is subject to any presumptive tax scheme, regardless of yearly turnover.

As per the Income Tax Act of 1961 the proprietorship firm's audit must be performed by a certified Chartered Accountant. Don't worry if you don't have a CA at your disposal, Vakilsearch will cover you with that!

Why Vakilsearch

If you are looking for a one-stop solution to file your proprietorship income tax returns then Vakilsearch is the best option. We have our in-house chartered accountants who can audit your income complying with all the terms and conditions explained in the Income-tax Act. All you have to do is reach out to our experts. They will complete proprietorship income tax return filing in just 3 legit steps in the most affordable range.

When compared to other competitors we provide the most affordable pricing to file your income tax returns.

CategoryCharges
Sole Proprietors - Presumptive₹1499
Sole Proprietor - Non Presumptive with books₹4999 onwards

Our experts deal with more than 1000 companies in a month in multiple legal disciplines. Apart from the firms we also have a large number of individuals who choose Vakilsearch for all their legal aspects. Trust us, Vakilsearch can make all your legal aspects simple!

Recent Updates

Deadline to file Income Tax Returns for the FY 2019-20 has been extended

November 23, 2020

The Deadline to file Income Tax Returns for the FY 2019-20 has been extended to 31st December 2020. A new change has been implemented in the ITR form known as Schedule 112A disclose details of the sale of equity share or unit of equity-oriented fund on which Securities Transaction Tax (STT) is paid.

Penalty Deduction on TDS

24th February: Delayed deposit of TDS will attract only 9% penalty instead of 18%

ITR Filing for proprietorship firm Deadline Extended

30th July: The Central Board of Indirect Taxes has extended the tax filing deadline. Yes, now taxpayers can file returns for the FY 2019-20 till 30th November, 2020, instead of 31st July and 30th September.

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