ITR Filing for Proprietorship Firm Made Easy at Efinac!
Efinac provides holistic support when it comes to ITR filing for proprietorship firm, starting from data collection to filing your tax return we have got you completely covered!
Documents Required from Directors, Shareholders
- Pan Card Copy (Mandatory)
- ID Proof (Any one) – Driving License/ Voter ID/ Passport Copy/ Aadhaar Card
- Address Proof – Latest Bank Statement/ Latest Telephone or Mobile Bill/ Latest Electricity Bill.(MUST be less than 30 days old)
- Passport Size Photograph
Documents Required for Registered Office Address
- NOC – No Objection Certificate from the Owner of the Property
- Address Proof – Latest Telephone Bill or Mobile Bill/ Gas Bill/ Electricity Bill (MUST be less than 30 days old)
How Efinac Can Help With ITR For Proprietorship Firm
Based on the annual turnover you have to file ITR of proprietorship firm tax returns, and by choosing Efinac you can finish this process in just 3 easy steps!
Step 1
Step 2
Step 3
ITR Filing for Proprietorship Firm - An Overview
Just like other incorporated firms such as partnerships and LLPs, proprietors also must pay tax on their earnings. As per the law proprietorship and the proprietor are considered as a single entity and are subjected to income tax returns. As a result, the laws that control the payment of the proprietor's income tax also apply to the proprietorship.
However, the income tax rates of the registered companies are fixed based on flat rates. On the other hand, a single proprietorship will not be taxed as a different legal entity. All the business owners should file their taxes as an individual return like other individual taxpayers of the country. Based on the Income-tax rules and the slab rates the proprietorship tax is also subjected to the deduction.
ITR Filing for Proprietorship Firm - An Overview
Just like other incorporated firms such as partnerships and LLPs, proprietors also must pay tax on their earnings. As per the law proprietorship and the proprietor are considered as a single entity and are subjected to income tax returns. As a result, the laws that control the payment of the proprietor's income tax also apply to the proprietorship.
However, the income tax rates of the registered companies are fixed based on flat rates. On the other hand, a single proprietorship will not be taxed as a different legal entity. All the business owners should file their taxes as an individual return like other individual taxpayers of the country. Based on the Income-tax rules and the slab rates the proprietorship tax is also subjected to the deduction.
Documents Required
As a sole proprietor, the following documents are required for ITR filing:
- PAN card
- Aadhar card
- Bank account details
- Form 16, 16A and 26AS
- Advance tax payment challan
Income Tax Slab for Proprietorship Firm 2020-2021
The advantages of filing IT returns are:
| Income range | Tax rate |
|---|---|
| ₹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% |
When it comes to filing a sole proprietorship income tax return the proprietors age should be within the 60 to 80 years in the previous financial year
| Income Slab | Income Tax Rate |
|---|---|
| Up to ₹3,00,000 | NIL |
| ₹3,00,000 to ₹5,00,000 | 5% of the total income above ₹3,00,000 |
| ₹5,00,000 to ₹10,00,000 | ₹10,000+20 % of the total income above ₹5,00,000 |
| Above ₹10,00,000 | ₹1,10,000 + 30% of the total income above ₹10,00,0000 |
If the age of the proprietor is more than 80 the following tax slab is used
| Income Slab | Income Tax rate |
|---|---|
| Up to ₹5,00,000 | NIL |
| ₹5,00,000 to ₹10,00,000 | 20% of the total income above ₹5,00,000 |
| Above ₹10,00,000 | ₹1,00,000 +30% of the total income above ₹10,00,000 |
Irrespective of the age if the sole proprietorship form is a nonresident then the following tax slab is used
| Income Slab | Income Tax Rate |
|---|---|
| Up to ₹2,50,000 | NIL |
| ₹2,50,000 to ₹5,00,000 | 5% of the total income above ₹2,50,000 |
| ₹5,00,000 to ₹10,000,000 | ₹12,500 + 20% of the total income above ₹5,00,000 |
| Above ₹10,00,000 | ₹1,12, 500 + 30 of the total income above ₹10,00,000 |
How to Complete Proprietorship Tax Return Filing
The income tax of the proprietorship is the proprietor's income tax and it is crucial to be filed every year without fail. The E-sign of the proprietor will be used to file the income tax return. Based on the type of proprietorship you will have to submit two different forms. Initially, you will have to submit all the required documents including your PAN card to our experts
- ITR 3 Form: If the proprietorship is run by a hindu undivided family (HUF) or any other owner
- ITR 4 Form: This one is used by proprietorships that are subject to presumptive tax schemes. Filing this form will reduce the burden of compliance for small businesses and still provide you with the deductions of HUFs.
Subsequently, our experts will register it in the official portals. The assessment year and ITR filing type will be chosen based on the scenario. You will be provided the required confirmation after completing the process.
Due Date for ITR of Proprietorship Firm
Losses in the business, if any, can be carried forward if the proprietor files an income tax return before the deadline.
- Income tax return filing wherein the audit is not necessary 31 July of every year
- Income tax return filing wherein the audit is necessary on 31 October of every year.
Audit for Proprietorship
Depending on the annual turnover of the proprietorship, auditing may be necessary under the following scenarios.
- During the assessment year, the turnover of the proprietorship firm conducting business exceeds ₹1 crore
- In the case of a professional proprietorship, an audit is required if the total receipts of the business exceed ₹50 lakh
- An audit is required whenever a proprietorship is subject to any presumptive tax scheme, regardless of yearly turnover.
As per the Income Tax Act of 1961 the proprietorship firm's audit must be performed by a certified Chartered Accountant. Don't worry if you don't have a CA at your disposal, Efinac will cover you with that!
Why Efinac
If you are looking for a one-stop solution to file your proprietorship income tax returns then Efinac is the best option. We have our in-house chartered accountants who can audit your income complying with all the terms and conditions explained in the Income-tax Act. All you have to do is reach out to our experts. They will complete proprietorship income tax return filing in just 3 legit steps in the most affordable range.
When compared to other competitors we provide the most affordable pricing to file your income tax returns.
| Category | Charges |
|---|---|
| Sole Proprietors - Presumptive | ₹1499 |
| Sole Proprietor - Non Presumptive with books | ₹4999 onwards |
Our experts deal with more than 1000 companies in a month in multiple legal disciplines. Apart from the firms we also have a large number of individuals who choose Efinac for all their legal aspects. Trust us, Efinac can make all your legal aspects simple!
Recent Updates
Deadline to file Income Tax Returns for the FY 2019-20 has been extended
November 23, 2020
The Deadline to file Income Tax Returns for the FY 2019-20 has been extended to 31st December 2020. A new change has been implemented in the ITR form known as Schedule 112A disclose details of the sale of equity share or unit of equity-oriented fund on which Securities Transaction Tax (STT) is paid.
Penalty Deduction on TDS
24th February: Delayed deposit of TDS will attract only 9% penalty instead of 18%
ITR Filing for proprietorship firm Deadline Extended
30th July: The Central Board of Indirect Taxes has extended the tax filing deadline. Yes, now taxpayers can file returns for the FY 2019-20 till 30th November, 2020, instead of 31st July and 30th September.
FAQ
Form ITR3 and form ITR4 have to be filed for proprietorship income tax returns. You can also reach out to Efinac for filing them online.
ITR2 is filed by resident individuals who have a total income tax exceeding ₹50 lakh. And is usually filed by individuals who own more than one house property. So an individual taxpayer having income through a business cannot use ITR2.
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