Business Tax Filing

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Business tax Filing

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Details Of Business Tax Return Filing:

Businesses in India are required to file their tax returns every year in order to comply with the Income Tax Act, 1961. Business tax returns can be filed by entities such as sole proprietorships, partnerships, limited liability partnerships (LLPs), companies, and trusts.

The due date for filing business tax returns in India is usually July 31st of every assessment year. However, for the assessment year 2022-23, the deadline has been extended to September 30, 2022.

The forms that are used to file business tax returns in India depend on the type of entity and the income earned. Some of the commonly used forms are:

  1. ITR-3: This form is used by individuals who operate a proprietorship business or are professionals in India.

  2. ITR-4: This form is used by individuals and Hindu Undivided Families (HUFs) who have income from a business or profession.

  3. ITR-5: This form is used by partnership firms, LLPs, associations, and bodies of individuals to report their income and computation of tax.

  4. ITR-6: This form is used by companies that do not claim exemptions under section 11 of the Income Tax Act.

  5. ITR-7: This form is used by entities that are required to furnish returns under section 139(4A) or 139(4B) or 139(4C) or 139(4D) of the Income Tax Act.

It is important for businesses to file their tax returns on time to avoid penalties and interest charges. Late filing of tax returns can result in penalties of up to Rs. 10,000, depending on the amount of tax due. Therefore, businesses must ensure that they comply with the tax laws and file their returns within the due date.

Type of Business Filing Requirement Income Tax Rate Tax Audit Due Date Tax Return Form
Proprietorship Required for income > Rs. 2.5 lakhs (age < 60) / Rs. 3 lakhs (age 60-80) / Rs. 5 lakhs (age > 80) 0% for income up to Rs. 2.5 lakhs; 5% for income between Rs. 2.5-5 lakhs; 20% for income between Rs. 5-10 lakhs; 30% for income > Rs. 10 lakhs Required if total sales turnover > Rs. 1 crore (for business) / gross receipts > Rs. 50 lakhs (for professionals) July 31 (no audit) / September 30 (with audit) Form ITR-3 or Form ITR-4-Sugam
Partnership Required 30% Required if total sales turnover > Rs. 1 crore (for business) / gross receipts > Rs. 50 lakhs (for professionals) July 31 (no audit) / September 30 (with audit) Form ITR-5
LLP Required 30% Required if total sales turnover > Rs. 1 crore (for business) / gross receipts > Rs. 50 lakhs (for professionals) July 31 (no audit) / September 30 (with audit) Form ITR-5

Note: The information provided is as of the cutoff date mentioned earlier and may be subject to change. Please consult a qualified professional for the latest information and advice.

FAQ’s

  • When is the deadline to file a company tax return?

The deadline to file a company tax return is June 22, 2022.

  • What type of ITR should a company file?

The type of ITR a company should file depends on its type of business entity. For example, Form ITR-4 is used for firms with a total income of up to ?50 lakhs and calculated under Sections 44AD, 44ADA, 44AE, while Form ITR-5 is used for LLPs and partnerships.

  • What are the consequences of not filing a company tax return?

A company may face penalties, interest charges, prosecution, disqualification of directors, and loss of eligibility for government contracts for not filing a tax return.

  • What are the different types of business tax return filing?

The different types of business tax return filing are sole proprietorship tax return filing, partnership firm tax return filing, limited liability partnership tax return filing, and company tax return filing.

  • Is it possible to file an ITR for the previous year?

Yes, you can file a belated ITR up to one year from the end of the relevant assessment year, but up to three years late.

  • What are the forms applicable for individuals with business income for AY 2022-2023?

For AY 2022-2023, individuals with business income should use ITR-3, ITR-4 (SUGAM), Form 16A and Form 26AS, Form 3CB-CD and Form 3CEB, and Form 15G and Form 15.

  • Who is required to pay advance tax?

A taxpayer with a total tax liability of Rs. 10,000 or more in a financial year is required to pay advance tax in four installments.

  • How is income tax calculated on business income?

Income tax on business income is calculated using normal provision or presumptive taxation, where taxable income is calculated by deducting the cost of sold goods and expenses from total sales.

  • What are the criteria for opting for the Presumptive Taxation Scheme?

Small businesses or firms that do not maintain books of accounts can opt for Presumptive Taxation. For businesses, the option is available for turnover or receipts up to Rs. 2 crore, and businesses should offer at least 8% of the turnover or receipts as income, or 6% in case of payment via banking channels and electronic mode.

  • What are the tax rates for businesses under the presumptive taxation scheme?

Tax rates for businesses under the presumptive taxation scheme depend on their income, where income up to Rs. 2.5 lakh is exempt, income between Rs. 2.5 lakh and Rs. 5 lakh is taxed at 5%, income between Rs. 5 lakh and Rs. 10 lakh is taxed at 20%, and income above Rs. 10 lakh is taxed at 30%.

  • How can self-employment tax be calculated?

Self-employment tax can be calculated by deducting expenses from revenues.