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 Firm?
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 proprietor’s 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% |
- Surcharge applicable if total income is more than INR 50 lakh and up to INR 1 crore: 10% of income tax
- Surcharge if total income exceeds INR 1 crore: 15% of income tax
Tax Audit for Proprietorship Firm
Tax Audit will be mandatory for a proprietorship firm if they fall under the following category:
- 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 Firm?
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 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 return for a proprietorship firm depend on tax audit applicability:
- 31St July: For proprietorship firm where tax audit is not necessary
- 30th September: For proprietorship firm where tax audit is necessary
- 30th November: For proprietorship firm who have international transactions for business purpose
How to file ITR for Proprietorship Firm?
Proprietors have to file their income tax returns online via the e-filing portal. One needs to register on the e-filing portal to file ITR online, if this is already done then log in by entering the PAN number to file the return. After filling in all the necessary information, make sure to e-verify the return before submitting it to make sure there are no errors.