GST TAX COMPLIANCES
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( PROPRIETORSHIP RETURN FILING + PARTNERSHIP FIRM TAX RETURN FILING) Registration - An Overview
A proprietorship, like other incorporated firms such as partnerships and corporations, must pay tax on its earnings. In a legal sense, a proprietorship is treated the same as the owner himself, and the income tax returns that must be submitted follow the same method as the proprietor’s own filings.
For example, if the proprietor is a senior citizen, income tax slabs for senior citizens apply to the proprietorship:
a) citizens aged 60 and above are exempt from paying income tax if their total income is less than Rs 3 lakh
b) If their total income is less than Rs 5 lakh, persons aged 80 and up are free from paying income tax.
HOW DO I FILE A PROPRIETORSHIP INCOME TAX RETURN?
Unless exempted, proprietorships are required by law to file tax returns every year. As previously stated, the proprietorship’s income tax is the proprietor’s income tax. Depending on the nature of the proprietorship, two distinct forms must be filed:
- Form ITR-3: If the proprietorship is conducted by a Hindu Undivided family or any other proprietor, this form should be utilised to file income tax.
- Form ITR-4 Sugam: Unlike the preceding form, this one is utilised by proprietorships that are subject to presumptive tax schemes. This is to alleviate the compliance load placed on small firms.
PARTNERSHIP FIRM TAX RETURN FILING
A partnership firm is a form of company in which several people work together to run a business. In India, there are two types of partnership firms: registered partnership firms and unregistered partnership firms. Small businesses should consider forming a partnership because the process is simple and there are few legal requirements. Unregistered Partnership firms, on the other hand, are denied certain rights under Section 69 of the Partnership Act, which primarily addresses the consequences of non-registration.
HOW TO FILE TAX RETURNS?
Form ITR-5 should be used to file partnership income tax returns. This form ITR-5 is used to file partnership firm income tax returns, not individual partner tax returns. The income tax department’s internet portal accepts ITR-5 filings. Documents should only be submitted when they are requested. Partners must use class 2 digital signatures to verify the filing procedure when filing partnership company tax returns.
PROCEDURE
A partnership firm’s income tax return can be filed either online or manually through the IRS website. In addition, partnership firms that are subject to an audit must file their income tax returns online. When filing by hand, the assessee must print two copies of Form ITR-V. One copy of the assessee’s signed ITR-V must be mailed to Post Bag No. 1, Electronic City Office, Bengaluru–560100 (Karnataka). The assessee should save the other copy for his or her records.
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FAQs
Annual audited financial statements are not required for partnership firms. Based on the turnover and other factors, a tax audit may be required.
Compliance for partnership businesses primarily consists of filing income tax returns, as opposed to corporate entities such as LLPs and corporations, which
must file both income tax returns and annual returns.
The partnership deed provides all of the partnership’s terms and conditions. The partnership deed regulates each partner’s rights and responsibilities, making it a very important document.