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.
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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
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
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
Up to Rs. 5,00,000 NA
Rs. 5,00,000 to Rs. 10,00,000 20%
Exceeding Rs. 10,00,000 30%


Get the process done in 5 Easy Steps

1. Get in touch with our expert for free consultation.

2. Fill the Details sheet form. (Download details sheet form).

3. Provide the necessary Documents.

4. Application form with concern Department.

5. Document verification.

5. Now your work is completed. (Congratulations your work is completed now.)

Still have questions? Ask an expert for help

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Call us at+91-7738877316

Email us