Income tax return for proprietorship firm
Starts from Rs. 2,500/-
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 foundations intrinsically. 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 a indebtedness.
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:
Proprietors below 60 years aged are sure to pay taxes on their annual income exceeding over INR 2.5 Lacs;
Proprietors between 60 to 80 years aged are instructed to file tax returns on their annual income exceeding over INR 3 Lacs;
Proprietors above 80 years aged got to file tax returns on their annual income exceeding over INR 5 Lacs.
Mandates for Filing tax Returns (ITR) where Tax Audit is Required:
Proprietorship firm with total sales exceeding over INR 1 Crore during a fiscal year
Professionals (CA, Lawyers. Doctors) with gross receipts exceeding over INR 50 Lacs during a fiscal year
Other proprietorship firm under any presumptive taxation scheme, regardless of its turnover, where-in the claimed income is lesser than the estimated earnings or gains specified under the scheme