Income Tax Return Audit For Proprietorship Firms in India

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Propritorship

Proprietorship firms are required to file income tax return like LLPs and Companies registered in India. Since proprietorship firms are considered to be one and same as the proprietor, the income tax return filing of the proprietorship firm is the same that of the proprietor. Under Income Tax Act, 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.

Audit For Proprietorship

Income Tax laws make it mandatory for a proprietorship to get its books of account audited from a practising CA under the following conditions :

  • If the total sales turnover of the proprietorship exceeds Rs 1 crore during the financial year.
  • If the total gross receipts of the professional exceed Rs 50 lakhs during the financial year.
  • If the proprietorship had opted for the presumptive scheme and the income claimed is lower than the deemed profits and gains under the scheme.

Due Date For A Proprietorship Firm To File A Tax Return

  • If the proprietorship firm does not require a tax audit, it must file the return by 31st of July.
  • If the proprietorship firm requires a tax audit, it must file the return by 30th of September
  • If the proprietorship firm needs to file Form 3 CEB, it must file the return by 30th of November.

Income Tax Return For Proprietorship Firms

For the assessment year 2018-19, which relates to income earned in the Financial Year 2017- 18, proprietorship firms are required to file Form ITR-3 or Form ITR-4-Sugam.

Form ITR-3 is to be filed by a proprietor or a Hindu Undivided Family who is carrying out a proprietary business or profession.

ITR-4-Sugam is to be filed by a proprietor who has paid income tax under the presumptive taxation scheme.

Reasons To Major Compliances For A Proprietorship

Dedicated Advisor

Your proprietorship will be assigned a dedicated Compliance Manager who will be a single point of contact to help you maintain the compliance for your proprietorship. You can get in touch with your Compliance Manager at anytime and get assistance on matters related to your proprietorship’s compliance

Accounting

Proprietorships are required to maintain accounts and prepare financial statements at the end of each financial year. Our Compliance Manager will help maintain accounts and will prepare the financial statement for your Proprietorship at the end of financial year.

Income Tax Return Filing

Income tax return of a proprietorship must be filed at the end of each financial year. Based on the nature of business activity, our Compliance Manager will prepare all the documents and file your proprietorship tax return.

TDS Return Filing

TDS return must be filed by all entities required to deduct tax at source and having TAN registration. If your proprietorship has TAN registration, our Compliance Manager can help file TDS return at an additional cost.