Business Tax Return Filing

Documents Required

Business Tax Return Filing

All businesses operating in India are required to file income tax return each year. In addition to filing income tax return, a business may also be required to file TDS return and pay advance tax to stay compliant under the Income Tax Act. Digi Hunter is India’s largest tax services platform offering a range of services like incorporation, GST return filing, income tax filing and more. Digi Hunter can help file income tax return for your business and ensure it remains compliant under the Income Tax Act and Rules. The average time taken to file an income tax return for your business is 3 to 5 working days. Get a free consultation on business tax return filing by scheduling an appointment with an Digi Hunter Advisor.

Proprietorship

Any person having business or professional income of more than Rs.2.5 lakhs per year would be required to file income tax return each year. Digi Hunter offers income tax filing for professionals and proprietors from Rs.2899

Partnership

Partnership firms (registered or unregistered) are required to file income tax return in form ITR 5 each year. Partnership firms attract income tax at the rate of 30%. Digi Hunter offers income tax filing for partnership firms from Rs.5899

LLP

Limited Liability Partnership firms registered in India are required to file Income Tax Return in Form ITR-5 each year and MCA Annual Return. Digi Hunter offers comprehensive compliance management for LLPs starting from Rs.7899

Companies

All types of companies registered in India are required to file Income Tax Return in Form ITR-6 each year and MCA Annual Return. Digi Hunteroffers comprehensive compliance management for companies starting from Rs.7899

Proprietorship Tax Return Filing

Any individual who has business income is said to be operating a proprietorship firm. 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.

Requirement for Filing Proprietorship Tax Return

All proprietors below the age of 60 years are required to file income tax return if total income exceeds Rs. 2.5 lakhs. In the case of proprietors over the age of 60 years but below 80 years, income tax filing is mandatory if total income exceeds Rs.3 lakhs. Proprietors over the age of 80 years and above are required to file income tax return if the total income exceeds Rs.5 lakhs.

Income Tax Rate for Proprietorship

The income tax rate for proprietorship is the same as the income tax rate for individuals. Unlike the income tax rate for LLP or Company which are flat rates, proprietorships are taxed on slab rates. The following is the income tax rate applicable for proprietorships for assessment year 2019-20, wherein the age of the proprietor is less than 60.

FAQ's

1. When must a company tax return be filed?

The company /business subject to audit can file their returns by October 31 of the assessment year. If a taxpayer has an international or specified domestic transaction that is required to furnish a report in Form No. 3CEB, the due date is November 30.

2. Which ITR should a company file?

The type of ITR (Income Tax Return) a company should file depends on the type of company it is.

Form ITR-4 – This ITR can be used to File ITR for those firms other than LLPs, which have a total income of up to ?50 lakhs, and that income is calculated under Sections 44AD, 44ADA, 44AE
Form ITR-5 – This ITR can be used for filing ITR for LLPs and partnerships, not ITR 7.
File ITR-6 – Those companies not claiming exemption under Section 11 can use ITR-6 to file an Income tax return.
File ITR-7 – This can be used for those companies that are mandated to file returns from Sections 139(4A), 139(4B), 139(4C), and 139(4D) only.

3. What happens if a company does not file ITR?

If a company fails to file its Income Tax Return (ITR), it may face the following consequences:

Penalty: The company may be levied with a penalty for non-filing of ITR; as per section 234F of the IT Act, a fine of Rs.10,000 will be charged for failing to file tax returns,
Interest: In addition to the penalty, the company may also be charged with interest on the outstanding tax amount. Moreover, a delay in ITR filing can result in interest being charged under Section 234A of the Income Tax Act 1961
Prosecution: In severe cases, the company may be prosecuted for non-compliance, leading to the imprisonment of up to 7 years and/or fines.
Disqualification of Directors: The Company’s directors may be disqualified from being appointed directors of any company for up to 5 years.
Loss of Eligibility for Government Contracts: The Company may be disqualified from bidding for government contracts or availing government facilities if it has not filed its ITR.

4. What are the different types of Business Tax Return Filing?

The different types of business tax return filing are named based on business entities that are entitled to file these returns, i.e. different structure of businesses and their names accordingly.

Sole proprietorship tax return filing
Partnership firm tax return filing
Limited Liability Partnership tax return filing
Company tax return filing

5. Can ITR be filed for the previous year?

Yes, you can file belated ITRs, anytime up to one year from the end of the relevant assessment year. You can submit tax returns up to three years late.

Related Business Registrations

In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.