Under the Income Tax Act, if gross income exceeds Rs. 2.5 lakhs, all proprietors under the age of 60 are expected to file an income tax return. In the case of owners over 60 but below 80 years of age, the filing of income tax is compulsory if the cumulative income exceeds Rs.3 lakhs. Proprietors aged 80 years of age and above are expected to file income tax returns if the cumulative income exceeds Rs.5 lakhs. FileRabbit offers income tax return preparation around the country for thousands of small and medium-sized proprietorship firms. Contact a FileRabbit Tax Expert to submit your income tax return today for your proprietorship firm.
For a proprietorship firm, an audit would be required if overall sales turnover during the financial year exceeds Rs.1 crore. In the case of a professional, the audit will be needed if the total gross receipts during the assessed financial year are more than Rs.50 lakhs. An audit will also be required for any proprietorship business under the presumptive taxation scheme irrespective of turnover if the profit reported is greater than the profits and gains considered under the scheme.
The income tax return of a proprietorship that doesn’t require an audit is due on 31st July. In case the income tax return of a proprietorship needs to be audited as per the Income Tax Act, then the return would be due on 30th September. Proprietorship firms would be required to file Form ITR-3 or Form ITR-4-Sugam. Form ITR-3 can be filed by a proprietor or a Hindu Undivided Family who is carrying out a proprietary business or profession. Form ITR-4-Sugam can be filed by a proprietor who would like to pay income tax under the presumptive taxation scheme. A presumptive taxation scheme is designed to help ease the compliance burden of small businesses by assuming a set profit margin on the total income of the business or profession.