Important Keyword: ITR Filing, ITR for Proprietorship, ITR Form.
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Which ITR to file for Proprietorship Firms?
Just like individuals, HUFs and companies are required to file income tax, proprietorship firms are also obligated to file income tax. In India, a sole proprietorship is not taxed as a different entity, the owner of the business files the taxes for the business just like an individual return. This article will help you understand various aspects related to filing ITR for a Proprietorship Firm.
What are the Tax Rates for Proprietorship Firms?
Income Tax rates for proprietor’s who are less than 60 years old
| Income Range | Current Income Tax Rates | New Income Tax Rates |
| Up to INR 2,50,000 | NIL | NIL |
| INR 2,50,001 to INR 5,00,000 | 5% | 5% |
| INR 5,00,001 to INR 7,50,000 | 20% | 10% |
| INR 7,50,001 to INR 10,00,000 | 20% | 15% |
| INR 10,00,001 to INR 12,50,000 | 30% | 20% |
| INR 12,50,001 to INR 15,00,000 | 30% | 25% |
| Above INR 15,00,000 | 30% | 30% |
Income Tax Rates for proprietors between the age of 60 and 80 years
| Income Tax Slab | Old Tax Rate | Health and Education Cess |
| Income up to INR 3 lakh | Nil | Nil |
| Income between INR 3 lakh and INR 5 lakh | 5% | 4% of Income Tax |
| Income between INR 5 lakh and INR 10 lakh | 20% | 4% of Income Tax |
| Income that exceeds INR 10 lakh* | 30% | 4% of Income Tax |
| Income Range | New Income Tax Rates |
| Up to INR 2,50,000 | NIL |
| INR 2,50,001 to INR 5,00,000 | 5% |
| INR 5,00,001 to INR 7,50,000 | 10% |
| INR 7,50,001 to INR 10,00,000 | 15% |
| INR 10,00,001 to INR 12,50,000 | 20% |
| INR 12,50,001 to INR 15,00,000 | 25% |
| Above INR 15,00,000 | 30% |
Income Tax Rates for proprietor’s more than 80 years
| Income Tax Slab | Old Tax Rate | Health and Education Cess |
| Income up to INR 5 lakh | Nil | Nil |
| Income between INR 5 lakh and INR 10 lakh | 20% | 4% of Income Tax |
| Income that exceeds INR 10 lakh* | 30% | 4% of Income Tax |
| Income Range | New Income Tax Rates |
| Up to INR 2,50,000 | NIL |
| INR 2,50,001 to INR 5,00,000 | 5% |
| INR 5,00,001 to INR 7,50,000 | 10% |
| INR 7,50,001 to INR 10,00,000 | 15% |
| INR 10,00,001 to INR 12,50,000 | 20% |
| INR 12,50,001 to INR 15,00,000 | 25% |
| Above INR 15,00,000 | 30% |
The surcharge applicable varies based on the total income:
- If the total income is more than INR 50 lakh and up to INR 1 crore, the surcharge is 10% of the income tax.
- If the total income exceeds INR 1 crore, the surcharge is 15% of the income tax.
Tax Audit for Proprietorship Firms
Tax Audit will be mandatory for a proprietor’s firm in the following cases:
- If the turnover of the proprietorship firm is more than INR 1 crore in an assessment year.
- In the case of a professional, if the total receipts of the proprietorship exceed INR 50 lakh.
- If the proprietorship is under any presumptive tax scheme, irrespective of the annual turnover, a tax audit is mandatory.
Which ITR form to File for Proprietorship Firms?
Depending on the nature of the business, a proprietorship firm can file:
- ITR-3: If the proprietorship firm is run by a Hindu Undivided Family (HUF) or other proprietors.
- ITR-4: If the proprietorship firm falls under the presumptive taxation scheme.
What are the Due Dates to File ITR for Proprietorship Firm?
The due dates for filing returns for a Proprietorship Firm depend on tax audit applicability:
- 31st July: For proprietorship firms where tax audit is not necessary.
- 30th September: For proprietorship firms where tax audit is necessary.
- 30th November: For proprietorship firms that have international transactions for business purposes.
How to file ITR for Proprietorship Firm?
Proprietors need to file their income tax returns online through the e-filing portal. If you’ve already registered on the portal, log in using your PAN number to file the return. After providing all necessary information, ensure to e-verify the return before submitting it to avoid errors.
Read More: Partition of HUF (Hindu Undivided Family)
Web Stories: Partition of HUF (Hindu Undivided Family)
Official Income Tax Return filing website: https://incometaxindia.gov.in/
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