Proprietorship Tax Return Filing

Proprietorship Tax Return Filing

The proprietorship firm files its income tax return in the same manner as the proprietor does. If a proprietorship company's total sales turnover for the fiscal year exceeds one crore, an audit will be necessary. For professionals, an audit would be necessary if their total gross receipts for the financial year under review exceeded 50 lakhs.

In addition, regardless of turnover, an audit would be necessary for a sole proprietorship business under the perspective taxation scheme if the income claimed was less than the presumed profits and gains under the plan. In India, proprietorships that operate must submit an income tax return annually.

Form ITR-3 or Form ITR-4-Sugam must be filed by proprietorship firms for the assessment year 2019–2020 only, which refers to income produced in the financial year 2017–18.

Form ITR – 3

An individual or Hindu undivided family operating a proprietary company or profession may file Form ITR-3.

Form ITR – 4 Sugam

In order to pay income tax under the perspective taxation plan, a proprietor may file Form ITR -4 - Sugam. The presumptive taxation model assumes a fixed profit margin on the overall income of the business or profession, hence reducing the compliance load on small firms.