A Guide to Income Tax Filing for Partnership Firms in India
Tax Rates: Partnership firms are taxed at a flat rate of 30% on their total annual income.
Surcharge: A 12% surcharge applies if the firm's income exceeds INR 1 crore.
Education Cess: An additional 2% education cess and 1% secondary and higher education cess are applicable.
Audit Requirement: Mandatory tax audit if business sales exceed INR 1 crore or professional receipts surpass INR 50 lakhs.
Income Tax Calculation: Deductions include partner remuneration, pre-partnership transactions, and non-working partner payments.
ITR Form: Partnership firms file Form ITR-5 online via the Income Tax Department's portal.
Offline Filing: Offline filing is available if audit requirements are not met, although online submission is preferred.
Individual Partners: Partners must file their own returns using Form ITR-3, distinct from the firm's filing.