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Which ITR to file for Proprietorship Firm?

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Yesha Dalwadi

ITR Filing
ITR for Proprietorship
ITR Form

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%

Tax Audit for Proprietorship Firm

Tax Audit will be mandatory for a proprietorship firm if they fall under the following category:

Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
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Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
Explore

Which ITR form to File for Proprietorship Firm?

Depending on the nature of the business, a proprietorship firm can file:

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:

Check which ITR Form to file?
Income Tax Return Forms to file depends on your Income Source, Residential Status, and other financial situation. Know which ITR Form you should file.
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Check which ITR Form to file?
Income Tax Return Forms to file depends on your Income Source, Residential Status, and other financial situation. Know which ITR Form you should file.
Explore

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.

Got Questions? Ask Away!

  1. Hey @TeamQuicko

    Thanks for the blog! Just one quick question - Why do we have to report a quarterly breakdown of Dividend Income under IFOS?

    Thank you!

  2. I had received dividend recently but I had noticed that TDS had been deducted. any idea as to why has it happened and is there a way I can claim this TDS?

  3. Hey @HarshitShah

    After the introduction of Budget 2020, dividend income is now taxable in the hands of the shareholder; and is also subject to TDS at 10% in excess of INR 5000 u/s 194 & 194K. Foreign Dividend is taxable at slab rates. TDS is not applicable to such dividends. The taxpayer should report such income under the head IFOS in the ITR filed on the Income Tax Website.

    Hope this helps!

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