Business Tax filing

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business tax filing

Business Tax filing

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Business Tax Return Filing for a Proprietorship firm upto Rs 25 lakh turnover.

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Description

Business Tax Return Filing

In the simplest terms, a Business Tax Return is statement containing the details of income and expenses incurred for the relevant financial year. In India, you need to pay the tax by following the rules mentioned in “INCOME TAX RETURN”, which takes up to 3-5 working days for filing your ‘Business Tax Return in India’.

                So, a solid understanding of the business tax will only help you to minimize the extra taxes paid up from your side and help you grow exponentially. Let’s understand the different business structures’ tax filing rules.

Different Types of Business Structures with Tax Filing Rules

Proprietorship

An Individual with more than Rs. 2.5 Lakhs Income (Personally or Professionally) on his name is required to file the business tax return.

Requirements for filing Tax Return

  1. All of the Proprietors, whose age is below ‘60 Years’; need to file the tax return (If

            their total income is above Rs. 2.5 Lakhs).

  1. All of the Proprietors, whose age is between ‘60-80 Years’; need to file the tax

            return (If their total income is above Rs. 3 Lakhs).

  1. All of the Proprietors, whose age is above “80 Years”; need to file the tax return (If

            their Income is above Rs.5 Lakhs).

         Income Tax Rate for Proprietors (Income-Wise)

            Note: – In Proprietorship, the tax rate is as per the slab rates ; but decided based on your Income. 

            It can range between (0-30% Tax Rate).

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 Check for Proprietorship

An income check will be mandatory if the total income of a Proprietor exceeds Rs.1 crore in a Financial Year (1st April – 31st March). If it is about any Profession –  Check will happen, only if the “Total Gross Receipts” exceeds more than Rs. 50 lakhs.

What is the Last date for filing the Tax?

For a Non-Check/Non-Audit Proprietor, the last date will be 31st July to file the tax.

But, if you need to file the tax according to the Income Tax Return; then it will be 30th September.

Which ‘Form’ is Required to File the Tax Return?

For a judgement year (like 2022-2023), the tax is related to the income earned in the financial year (2023-2024); the tax return will be filed on either ‘FORM ITR-3 or FORM ITR-4 SUGAM’.

Important

1. Form ITR-3 is filed by a Hindu Undivided Family.

2. Form ITR-4 will be filed by any proprietor, who wants to pay the tax based on a pre-decided taxation scheme.

Partnership (Registered/Unregistered) & LLP

Partnership firms are required to file the “FORM ITR-5’’ to file their business tax returns. They have to pay (Mandatory) at the rate of 30% tax returns (Irrespective of the Income or any loss). Partnership firms & LLPs are almost the same in all the cases (*Except Tax Check).

Requirements for filing Tax Return

A Partnership firm has to file the tax every year, if there’s no business activity; which leads to no income or loss. Then, you have to file the “NIL INCOME TAX RETURN”. Before the due date, for your partnership firm.

Income Tax Rate for Partnership Firms

All the partnership firms are required to pay the tax at the rate of 30% on their total income. If your total income exceeds the limit of Rs.1 Crore, you need to pay an additional ‘Surcharge’ of 12% on your income tax filed.

Keep in Mind: – A partnership firm also has to pay the “Health & Education CESS”, which is charged at the rate of 4% on the tax payable.

What is the Minimum Alternate Tax in Partnership Firms?

Partnership firms are required to pay the minimum alternate tax at the rate of 18.5% book profit on your adjusted total income. So, the tax paid by the partnership firms can’t be lesser less than 18.5% of book profit (along with the Surcharge, Health & Education CESS).

What about Tax Checks & Last Date for filing Tax Returns?

Same as the “Proprietorship Firms for the Partnership Firms”. But, for the ‘LLP’, if the sales cross the limit of Rs.40 Lakhs or your contribution in any way, exceeded the limit of Rs.25 Lakhs; you need to get your accounts checked/audited by your practising accountant.

In addition, if you entered any International transaction or specific domestic transactions; you need to file the “FORM 3CEB” with a certification from any C.A (Deadline: 31st October).

What is the Last date for filing the Tax Return in the

Partnership Firms?

You need to fill out the “FORM ITR-5”, for filing the tax return. It is an attachment-free Form. Hence, you need not present any other details along with it. But, you need to keep all the records safe in case, if there’s any requirement & must present the same tax numbers; when filing the taxation.

Any Companies that are registered in India under ‘MCA’, need to file the tax with “FORM ITR-6 & MCA ANNUAL RETURN” every year. These can be of mainly two types; “Domestic & International”. Private, One Person Company or any other Limited Companies are known as ‘Domestic Companies’.

What are the Requirements & Minimum Alternate Tax to pay for a Company?

Same as the “Partnership Firms & LLP”.

Income Tax Rate for Company

For an examination year (Like; 2022-2023), the tax rate will be at 25% of the total income for the domestic companies (If the turnover is less than Rs.250 Crores in the Year 2023-2024).For Foreign companies, the tax rate will be 30% of the total income; (If the total income is less than Rs.250 Crores). Both the Domestic & International Companies, have to pay the Surcharge; Health & Education (Same as the partnership firms).

Tax Check & Tax Return for a Company?

Your tax records must be checked by any C.A. (In all cases – Regardless of your total turnover) and you need to file a “FORM ITR-6”.

Last date for filing Tax Returns?

You need to file the tax return before the 30th of September (MCA annual return & income tax return).Companies, that are registered between (January -March) can file the ‘MCA Annual Return’ – After 18 Months in the 1st Year, but need to file the income Tax Return by 30th September.

Frequently Asked Questions (FAQs) in Business Tax Return!

   1. What if, a company don’t file an ITR? 

Ans:  A company may face the following consequences if they don’t file an ITR;

  • Penalty: Rs.10,000 will be fined for not filing an ITR under section 234F of the IT Act.
  • Interest: Interest on the outstanding tax amount under section 234A of the income tax act of 1961.
  • Prosecution: Imprisonment of up to 7 Years for your ‘Non-Compliance’.
  • Disqualification of Directors: Company directors may be exempted from being the directors of any company for up to 5 years.
  • Ineligibility for Bidding Government Projects: Company can be exempted from bidding on Government Projects in future.

 

2. How to Calculate “My Self-Employment Tax”? 

Ans: You need to calculate your revenue (Being Self-Employed) and then deduct your expenses from it. The remaining is the “Net Income Tax”, you need to pay to the government. You need to file either “FORM ITR-3 or FORM ITR-4”

3. How to file a “Business Tax Return Online”?

Ans: As you might understand by now, filing a business tax return for a beginner is one of the most hectic works to do. So, don’t worry, we are here for you to help in all conditions. You can book a ‘No-Charge’ consultation call on your ‘Business Tax Return’. Therefore, we can guide you thoroughly from the start to the end. You may want to check out the link below.

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