BUSINESS TAX FILINGS
Establishing a business and comprehending the intricacies of tax return filing is vital for business operations. A business tax return, pertinent to companies, serves as a detailed account of the earnings and expenditures of the enterprise. We're dedicated to facilitating businesses in effortlessly completing their tax filings. Our proficient team alleviates the burden, ensuring adherence to deadlines and regulations. Whether your business is in its infancy or already established, our assistance remains unwavering.
Ready to streamline your business tax processes? Contact us today and experience seamless and stress-free Business Tax Return Filings!
A business tax return is an income tax return tailored for businesses, presenting a thorough overview of the business's earnings, expenditures, and relevant tax information in a designated format. It encompasses the submission of income tax returns for businesses, including the obligatory reporting of Tax Deducted at Source (TDS), conducted on an annual basis.
This return functions as a financial statement delineating income and documenting supplementary financial elements such as fixed assets, borrowed and lent funds, debtors, and creditors within the business.
Eligibility to filing the Business Tax Filings
All eligible businesses operating within the Indian tax framework are required to file a business income tax return. The obligation to file a business tax return depends on the structure of the business, which may include:
Sole Proprietorship
Partnership Firm
Limited Liability Partnership (LLP)
Companies – Private Limited Company, One Person Company
Advantage of Filing the Income Tax Return Filings
Filing business income tax returns brings forth numerous advantages, highlighted as follows:
Refund Claims: Timely and precise filing can potentially result in refunds, aiding in enhancing cash flow within the business.
Carry-forward of Losses: Losses incurred in a financial year can be carried forward and offset against future profits, reducing tax obligations.
Loan Applications: Maintaining accurate and up-to-date income tax returns can serve as evidence of financial stability, improving the likelihood of securing loans or credit from financial institutions.
Transaction Evidence: Filed tax returns offer concrete evidence of the business's financial transactions and activities, valuable for legal or contractual purposes.
Compliance: Filing tax returns ensures compliance with tax regulations, mitigating the risk of penalties or legal complications.
Transparency: Transparent financial records via tax returns bolster the business's credibility, fostering trust among customers, partners, and stakeholders.
Audit Preparedness: Filed returns establish a foundation for precise financial statements, preparing the business for potential tax audits.
Business Growth: Accurate financial reporting through tax returns aids in making informed business decisions, facilitating growth and expansion strategies.
Avoiding Notices: Timely and accurate filing diminishes the probability of receiving notices or inquiries from tax authorities.
Tax Benefits: Timely filing allows businesses to capitalize on various tax benefits and deductions legally, optimizing tax liabilities.
Requirements for the Business Tax Filings:
Proprietors below the age of 60 are required to file income tax returns if their total income exceeds Rs. 2.5 lakhs. For proprietors aged 60 to below 80 years, income tax filing is mandatory if their total income exceeds Rs. 3 lakhs. Proprietors aged 80 years and above must file income tax returns if their total income exceeds Rs. 5 lakhs.
The income tax rate for proprietorships mirrors that of individuals. Unlike the flat rates applicable to LLPs or Companies, proprietorships are taxed based on slab rates. Here are the income tax rates applicable to proprietorships for the assessment year 2023-24, for proprietors below 60 years of age. Click here!
Forms & Requirements relevant to Sole Proprietorship Tax filings:
Proprietorship firms must submit either Form ITR-3 or Form ITR-4-Sugam. Form ITR-3 is applicable for a proprietor, or a Hindu Undivided Family engaged in proprietary business or profession. Form ITR-4-Sugam is suitable for a proprietor opting to pay income tax under the presumptive taxation scheme. Click here!
Partnership Business Filings:
Income tax returns must be filed by all partnership firms, irrespective of whether they incur income or loss. Partnership firms are treated as distinct legal entities under the Income Tax Act. Consequently, the income tax rate applicable to partnership firms is akin to that of LLPs and Companies registered in India. Click here!
Forms & Requirements relevant to Partnership Tax filings :
Partnership firms are obligated to pay income tax at a rate of 30% on their total income. Additionally, a partnership firm incurs an income tax surcharge at a rate of 12% on the income tax amount when the total income exceeds Rs. 1 crore. Furthermore, partnership firms must also remit a Health and Education Cess, which is levied at 4% on the income tax amount and the applicable surcharge.
Similar to the income tax imposed on companies, partnership firms are subject to Minimum Alternate Tax (MAT). MAT is calculated at a rate of 18.5% of the adjusted total income. Hence, the income tax payable by a partnership firm's profits cannot be less than 18.5%, inclusive of the income tax surcharge, education cess, and secondary and higher education cess.
Partnership firms engaged in business with total sales exceeding Rs. 1 crore or carrying out a profession with gross receipts surpassing Rs. 50 lakhs in the previous year must undergo tax audits. Furthermore, other conditions as specified may necessitate a tax audit for a partnership firm.
The deadline for filing income tax returns for most partnership firms is July 31 of the assessment year. Partnership firms required to undergo audits under the Income Tax Act must submit their income tax returns before the September 30 deadline. Click here!
Limited Liability Partnership Filing:
All Limited Liability Partnerships (LLPs) must submit an income tax return, regardless of whether they have income or loss. LLPs are distinct legal entities and are subject to separate taxation from their partners. The income tax rate applicable to LLPs mirrors that of companies registered in India.
Forms & Requirements relevant to Limited Liability Partnership Tax filings:
The income tax rate applicable to LLPs registered in India stands at 30% of the total income. Additionally, a surcharge of 12% is imposed on the income tax payable when the total income exceeds Rs. 1 crore. Furthermore, a Health and Education Cess of 4% is applied to the income tax and surcharge of an LLP.
Similar to the income tax applicable to companies, LLPs are also subject to Minimum Alternate Tax (MAT). MAT is calculated at a rate of 18.5% of the adjusted total income for LLPs. Hence, the income tax payable by an LLP cannot be lower than 18.5%, inclusive of the income tax surcharge, education cess, and secondary and higher education cess.
LLPs with a turnover exceeding Rs. 40 lakh or a contribution exceeding Rs. 25 lakh are mandated to undergo audit by a practicing Chartered Accountant. Moreover, LLPs engaging in international transactions with associated enterprises or undertaking certain Specified Domestic Transactions must file Form 3CEB, which must be certified by a Chartered Accountant. LLPs required to file Form 3CEB must complete the process by November 30.
The deadline for filing income tax returns for LLPs in India is July 31. LLPs obligated to undergo a tax audit must submit their income tax returns by September 30. Click here!
Companies Filings:
Every company registered in India is obligated to annually file income tax returns, irrespective of their financial status, whether they generate income, profit, or incur losses. Hence, even dormant companies with no transactions are required to submit income tax returns annually. Click here!
Forms & Requirements relevant to Company Tax filings:
All companies registered in India must annually submit income tax returns, regardless of their income, profit, or loss. Therefore, even dormant companies with no transactions are mandated to file income tax returns each year.
For the Assessment Year 2024-25, domestic companies with a total turnover of less than Rs. 400 crores in 2020-21 are subjected to an income tax rate of 25% of their total income. Conversely, companies with a turnover exceeding Rs. 400 crores in the same period are taxed at a rate of 30%. Additionally, companies must remit a surcharge and Health and Education Cess at 7% of the income tax and surcharge.
All companies are liable to pay Minimum Alternate Tax (MAT) at a rate of 15% of book profit plus surcharge and education cess if their tax liability is less than 15% of the book profit.
Annual auditing of a company's accounts by a Chartered Accountant is mandatory, irrespective of turnover or profit/loss.
Income tax returns for all companies registered in India must be filed on or before September 30. Companies incorporated between January and March can file MCA annual returns after 18 months in the first year. However, such exemption is not applicable under the Income Tax Act. Consequently, even companies registered from January to March must file income tax returns on or before September 30 of the same calendar year.
Companies registered in India and engaged in profit-making activities must file Form ITR 6. Therefore, private limited companies, limited companies, and one-person companies are obligated to file Form ITR6.Click here!
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