Proprietorship Compliance

Running a Sole Proprietorship in India comes with a set of crucial financial and legal responsibilities. Compliance with various tax and regulatory requirements is essential to ensure your business's smooth operation and growth. This includes filing Income Tax Returns, TDS Returns, GST Returns, EPF Returns, maintaining accurate accounting records, and sometimes undergoing a Tax Audit.

Filing tax returns is an essential obligation for businesses operating as sole proprietorships in India. At IndiaFilings, we understand the significance of Compliance with Indian tax laws and the potential benefits that come with it. Our comprehensive services are designed to assist business owners in navigating the intricate Compliance. To navigate these compliance obligations seamlessly, IndiaFilings offers expert assistance and a user-friendly platform, making the process efficient and hassle-free for Sole Proprietors.

By partnering with IndiaFilings, you can fulfill your tax obligations and explore opportunities to optimize your tax benefits, allowing your business to succeed while following tax rules.

Proprietorship

A sole proprietorship in India is the most basic business setup, where a single individual owns and runs the business.

Income Tax Return filing for Proprietorship

In India, when it comes to taxes, proprietorships have the same responsibilities as their owners. A proprietorship is an extension of the owner, meaning the tax process is quite similar to what individuals go through. The income tax rules that apply to individual proprietors also apply to proprietorships.

1. Proprietorships, much like partnerships and companies, are required to pay taxes based on their earnings.

2. For tax purposes, proprietors and their businesses are viewed as single entities. The income tax filing process for proprietorships aligns with the tax returns of the Proprietor.

3. Since a proprietorship isn't considered a distinct legal entity, it has no unique tax identification number. Instead, the Proprietor's Permanent Account Number is used for filing returns on behalf of the proprietorship.

Is it necessary for Proprietorship to File ITR?

Yes, under the Income Tax Act in India, proprietorship firms must file income tax returns based on the age and income of the Proprietor:

Below 60 Years: Proprietors below 60 years of age must file an income tax return if their total income exceeds Rs. 3 Lakhs.
Between 60 and 80 Years: Proprietors aged between 60 and 80 must file an income tax return if their total income exceeds Rs. 3 Lakhs.
Above 80 Years: Proprietors aged 80 years and above must file an income tax return if their income exceeds Rs. 5 Lakhs.

Filing ITR before the deadline is crucial because it allows business losses to be carried forward for future use. Additionally, certain deductions under sections like 10A, 10B, 80-IA, 80-IAB, 80-IB, and 80-IC can only be claimed if the proprietorship's ITR has been filed on or before the due date.

Rates of surcharge under alternate tax regime

For the Assessment Year 2024-25, if a Proprietor chooses the alternate tax regime as per Section 115BAC, the surcharge rate will be 25%, contrasting with the previous rate of 37%.

Presumptive Taxation Scheme for proprietorship

The Presumptive Taxation Scheme for proprietorship is a provision in the Income Tax Act designed to ease the tax burden on small taxpayers in India. Its purpose is to enable small businesses to operate without the heavy compliance obligations. Businesses that opt for this scheme can calculate their income based on an estimated basis using Section 44AD. This scheme allows taxpayers to pay taxes at a minimum rate and eliminates the requirement to maintain detailed accounting records.

Streamline Proprietorship Compliance with IndiaFilings

IndiaFilings is your reliable partner in fulfilling the compliance needs of your Sole Proprietorship. We simplifies the filing of Income Tax Returns, ensuring you meet the deadlines and adhere to tax regulations.

We also support TDS Return filing, helping you accurately report deductions. For businesses registered under GST, our services include hassle-free GST Return filing, covering both GSTR-1 and GSTR-3B.

IndiaFilings can assist in EPF Return filing, ensuring Compliance with employee provident fund regulations. With IndiaFilings, you can focus on growing your Sole Proprietorship while we care for your compliance needs, ensuring your business's financial health and legal standing.

Ready to file your Proprietorship Income Tax Return with ease? Get started now!