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Proprietorship

Know the minimum annual compliances to be followed by your proprietorship business

    Proprietorship Business

    Income from Proprietorship business is assessed along with Proprietor’s income jointly. The income tax rules are same as that in case of individuals.

    proprietorship

    Income tax Return

    All Proprietors have to file their Income tax return if the Gross income exceeds the basic exemption limit of Rs. 2,50,000 if the proprietor’s age is below 60 years, Rs. 3,00,000 if age is 60 years or more but below 80 years, and, Rs. 5,00,000 if age is 80 years and above. The due date for filing ITR for those proprietorship business’ which are not liable for tax audit is 31st July. In case the business is liable for tax audit, the due date comes to 30th September.

    Tax Audit

    Tax audit is required if the Gross turnover exceeds Rs.1 crore in the previous year. In case of profession, tax audit would be required if the gross receipt exceeds Rs.50 lacs in the previous year. Tax audit would be mandatory irrespective of turnover if the proprietor has ever opted for presumptive taxation scheme and declared his income below 6% or 8% or 50% (as applicable). In case after opting for presumptive taxation scheme, proprietor decides to exit from the scheme, then also he would be liable for Tax audit.

    proprietorship

    ITR Form

    An individual having a proprietorship business has to file his Income Tax return using ITR 3. In case the proprietor opts for presumptive taxation scheme, he has to use ITR 4 for filing his return of Income.