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Income tax return for proprietorship firm

Starts from Rs. 2500/-

 

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Income tax return for proprietorship firm

What is proprietorship?

A proprietorship may be a state or right of owning a business or holding property. Generally, proprietorship and sole proprietorship are terms which have simultaneous usage. Since the business done under proprietorship isn’t registered, there exist no legal foundationsintrinsically. In India, these sorts of businesses are operated in unorganized sectors. The main idea is that there’s unlimited liability of the proprietor, unlike a partnership where there’s aindebtedness. There exists a stark difference between limited and unlimited liability. Indebtedness means for any of the act, offences, debts and loans of other partners not all the shareholders and therefore the partners are legally responsible. They’re responsible to the extent of a specific par value. This is often in reference to financial risk. Moreover, unlimited liability bears all the financial losses and gains on the proprietor only.

Understanding Proprietorship income tax return Filing

Sole Proprietorship is that the most known business framework in India because it is sort of simple to start out and requires minimum legal formalities. The proprietors exercising business activities in India are obliged to file income tax return annually consistent with their slab rates, counting on their annual income as prescribed within the tax Act:

Mandates for Filing tax Returns (ITR) where Tax Audit is Required:

All the above cases require Tax Audits and are sure to file ITR by 30th September. Whereas just in case of proprietorship firms / professionals that don’t require tax auditing got to file ITR by 30th July.

Income Tax Slab Rate

A new tax regime has been announced for FY2020-2021, where the individuals can pay taxes as per the new slabs subject to certain conditions.

Income Range Rate of Tax
0-2,50,000 Nil
2,50,001-5,00,000 5%
5,00,001-7,50,000 10%
7,50,001- 10,00,000 15%
10,00,00-12,50,000 20%
12,50,000- 15,00,000 25%
Above 15,00,000 30%

Proprietorship Tax Rate for the Assessment Year 2021-22 when Proprietor’s age is between 60 and 80 years

Taxable Income Rate of Tax
Up to Rs. 300000 Nil
Between Rs. 300000 and Rs. 500000 5%
Between Rs. 5,00,000 and Rs. 10,00,000 20%
More than Rs 10,00,000 30%

Proprietorship Tax Rate for the Assessment Year 2021-22 when Proprietor’s age is more than 80 years

Taxable IncomeRate of Tax
Up to Rs. 5,00,000Nil
Rs. 5,00,000 to Rs. 10,00,00020%
Exceeding Rs. 10,00,00030%

Procedure for change of object clause