Business Income tax Return filing

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PROPRIETORSHIP
Rs.4999
  • Income tax Return filing for a Proprietorship firm with less than Rs.10 lakhs turnover
  • Package Includes
  • Dedicated Accountant
  • Financial Statement Preparation
  • Income Tax e-filing by Accountant
PARTNERSHIP
Rs.8999
  • Income tax Return filing for a Partnership firm with less than Rs.10 lakhs turnover
  • Package Includes
  • Dedicated Accountant
  • Financial Statement Preparation
  • Income Tax e-filing by Accountant
LLP
Rs.6999
  • Income tax Return filing for a LLP with less than Rs.10 lakhs turnover
  • Package Includes
  • Dedicated Accountant
  • Financial Statement Preparation
  • Income Tax e-filing by Accountant
COMPANIES
Rs.18999
  • Income tax return filing for a private limited company with less than Rs.25 lakhs turnover
  • Package Includes
  • Dedicated Accountant
  • Financial Statement Preparation
  • Income Tax e-filing by Accountant

(Prices are exclusive of GST)

Proprietorship Tax Return filing

Since proprietorships are considered to be one and same as the proprietor, the income tax return filing procedure for a proprietorship is similar to individual income tax return filing.

Requirement for filing Income Tax Return

All proprietors below the age of 60 years are required to file income tax return if total income exceeds Rs. 2.5 lakhs. In the case of proprietors over the age of 60 years but below 80 years, income tax filing is mandatory if total income exceeds Rs.3 lakhs. Proprietors over the age of 80 years and above are required to file income tax return if the total income exceeds Rs.5 lakhs.

Income Tax Rate for Proprietorship

The income tax rate for proprietorship is the same as the income tax rate for individuals. Unlike the income tax rate for LLP or Company which are flat rates, proprietorships are taxed on slab rates.

Income Tax Slabs & Rates for Individual Tax Payers, Proprietorships (Less Than 60 Years Old)
Financial year: 2019-20, Assessment year: 2020-2021

Income Tax Slab Tax Rate for Individuals & HUF below 60 years
Up to Rs.2,50,000 No Tax
Rs.2,50,000 to Rs.5,00,000 5%
Rs.5,00,001 to Rs.10,00,000 20%
Above Rs.10,00,000 30%
Tax Audit for Proprietorships

An audit would be required for a proprietorship firm:

  • If the total sales turnover is over Rs.1 crore during the financial year.
  • In the case of a professional, audit would be required if total gross receipts are more than Rs.50 lakhs during the financial year under assessment.
Due Date for filing Proprietorship Tax Return
  • Proprietorship that doesn’t require audit is due on 31st July.
  • If Proprietorship needs to be audited as per Income Tax Act, then the return would be due on 30th September.
Tax Returns for Proprietorships
  • 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.

Partnership Firm Tax Return filing

All partnership firms are required to file the income tax return, irrespective of amount of income or loss. Partnership firms are taxed as a separate legal entity. Hence, the income tax rate applicable for partnership firms is similar to LLPs and Companies registered in India.

Requirement for filing Income Tax Return

All partnership firms are required to file income tax return each year, irrespective of income or loss. If there was no business activity, then a NIL income tax return must be filed before the due date for a partnership firm.

Income Tax Rate for Partnership Firms

Income Tax Rate for Partnership Firms for
Financial year: 2019-20, Assessment year: 2020-2021

Particulars Rates
Income tax rate 30%
Surcharge as % of Income Tax 12% of tax in case the total income exceeds Rs. 1 crore
Health & Education Cess as % of tax and surcharge 4% of tax plus surcharge
Alternate Minimum Tax (AMT) for Partnership Firms

AMT is a minimum tax that is leviable alternative to normal tax. Rate of AMT is 18.5% (plus applicable surcharge and cess). AMT is a tax levied on ‘adjusted total income’ in a FY wherein tax on normal income is lower than AMT on Adjusted total income. So, irrespective of normal tax, AMT has to be paid by taxpayers to whom AMT provisions apply.

Tax Audit for Partnership Firms
  • Partnership firms carrying on business with a total sale of over Rs.1 crore is required to obtain tax audit.
  • Partnership firms carrying on profession wherein gross receipts exceeds Rs.50 lakhs in the previous year are required to obtain tax audit.

In addition, there are other conditions applicable which could make an audit mandatory for a partnership firm.

Due Date for filing Partnership Firm Tax Return
  • Partnership firm that does not require audit, the due date is 31st July.
  • Partnership firm that needs to be audited as per Income Tax Act, the due date is 30th September.
Tax Returns for Proprietorships

Partnership firms are required to file income tax return in form ITR 5. Like all other income tax forms, ITR 5 is an attachment less form and there is no requirement for submitting any documents or statements along with a partnership firm tax return.

LLP Tax Return filing

All LLPs are required file the income tax return, irrespective of amount of income or loss. LLPs are a separate legal entity and are taxed separately from the Partners of the LLP. The income tax rate applicable for LLPs is similar companies registered in India.

Requirement for filing Income Tax Return

All LLPs are required to file income tax return each year, irrespective of income or loss. If there was no business activity, then a NIL income tax return must be filed before the due date.

Income Tax Rate for Partnership Firms

Income Tax Rate for LLP for
Financial year: 2019-20, Assessment year: 2020-2021

Particulars Rates
Income tax rate 30%
Surcharge as % of Income Tax 12% of tax in case the total income exceeds Rs. 1 crore
Health & Education Cess as % of tax and surcharge 4% of tax plus surcharge
Alternate Minimum Tax (AMT) for LLPs

AMT is a minimum tax that is leviable alternative to normal tax. Rate of AMT is 18.5% (plus applicable surcharge and cess). AMT is a tax levied on ‘adjusted total income’ in a FY wherein tax on normal income is lower than AMT on Adjusted total income. So, irrespective of normal tax, AMT has to be paid by taxpayers to whom AMT provisions apply.

Tax Audit for LLPs
  • LLP whose turnover exceeded Rs. 40 Lakh or whose contribution exceeded Rs. 25 Lakh are required to get their accounts audited.
  • In addition, LLPs that entered into an international transaction with associated enterprises or undertook certain Specified Domestic Transactions are required to file Form 3CEB. Form 3CEB must be certified by a Chartered Accountant. LLPs who are required to file Form 3CEB have 30th November as the deadline for LLP tax filing.
Due Date for filing LLP Tax Return
  • LLP that does not require audit, the due date is 31st July.
  • LLP that needs to be audited as per Income Tax Act, the due date is 30th September.
Tax Returns for LLPs

LLPs must file income tax return using Form ITR 5. Form ITR 5 must be filed online using the digital signature of one of the designated partner of the LLP.

Company Tax Return filing

All companies registered in India are required to file income tax returns each year. Under the Income Tax Act, company tax return filing falls under two categories, namely domestic company or foreign company. Companies registered with the Ministry of Corporate Affairs like Private Limited Company, One Person Company or Public Limited Company are classified as a domestic company.

Requirement for filing Income Tax Return

All companies registered in India are required to file income tax returns each year, irrespective of income, profit or loss. Hence, even dormant companies with no transactions are required to file income tax return each year.

Income Tax Rate for Companies

Income Tax Rate for Domestic Companies for
Financial year: 2019-20, Assessment year: 2020-2021

Income Tax Slab Domestic Companies
Turnover up to Rs.400 crores 25%
Turnover above Rs.400 crores 30%
Surcharge as % of Income Tax
  • 7% of tax in case income is more than Rs. 1 crore but less than Rs. 10 crore.
  • 12% of tax in case income is more than Rs. 10 crore.
Cess as % of tax and surcharge 4% of tax plus surcharge
Section 115BAA – New tax rate for domestic companies (20/09/2019)

The Government of India has introduced the Taxation (Amendment) Ordinance, 2019 on the 20th September, 2019. Several amendments are made to the Income Tax Act, 1961 through this ordinance. Changes such as corporate tax rate cut for domestic companies as well as manufacturing companies was announced. Also, the MAT rate has been reduced from the current 18.5% to 15%.

1. Section introduced to give effect to the reduced tax rate for domestic companies

The new section – Section 115BAA has been inserted in the Income Tax Act,1961 to give the benefit of a reduced corporate tax rate for the domestic companies. Section 115BAA states that domestic companies have the option to pay tax at a rate of 22% from the FY 2019-20 (AY 2020-21) onwards if such domestic companies adhere to certain conditions specified.

2. Conditions specified under eligibility criteria of section 115BAA

All domestic companies shall have an option to pay income tax at the rate of 22% (plus applicable surcharge and cess), provided the following conditions are complied with:

  1. Such companies should not avail any exemptions/incentives under different provisions of income tax. Therefore, the total income of such company shall be computed without:
    • Claiming any deduction especially available for units established in special economic zones under section 10AA;
    • Claiming additional depreciation under section 32 and investment allowance under section 32AD towards new plant and machinery made in notified backward areas in the states of Andhra Pradesh, Bihar, Telangana, and West Bengal;
    • Claiming deduction under section 33AB for tea, coffee and rubber manufacturing companies;
    • Claiming deduction towards deposits made towards site restoration fund under section 33ABA by companies engaged in extraction or production of petroleum or natural gas or both in India;
    • Claiming a deduction for expenditure made for scientific research under section 35;
    • Claiming a deduction for the capital expenditure incurred by any specified business under section 35AD;
    • Claiming a deduction for the expenditure incurred on an agriculture extension project under section 35CCC or on skill development project under section 35CCD;
    • Claiming deduction under chapter VI-A in respect to certain incomes, which are allowed under section 80IA, 80IAB, 80IAC, 80IB and so on, except deduction under section 80JJAA;
    • Claiming a set-off of any loss carried forward from earlier years, if such losses were incurred in respect of the aforementioned deductions;
    • Claiming a deduction for depreciation under section 32, except the additional depreciation as mentioned above.

b. Such companies will have to exercise this option to be taxed under the section 115BAA on or before the due date of filing income tax returns i.e. usually 30th September of the assessment year. Once the company opts for section 115BAA in a particular financial year, it cannot be withdrawn subsequently.

3. What is the new effective rate applicable to domestic companies?
The new effective tax rate, which will apply to domestic companies availing the benefit of section 115BAA is 25.168%. The break up such tax rate is as follows:

Base tax rate Surcharge applicable Cess Effective tax rate
22% 10% 4% 22*1.1*1.04 = 25.168%

Such companies will not be required to pay minimum alternate tax (MAT) under section 115JB of the act.

Also, such companies opting for section 115BAA will not be able to claim MAT credits for taxes paid under MAT during the tax holiday period. The companies would not be able to reduce their tax liabilities under section 115BAA by claiming MAT credits. The CBDT may issue a clarification on MAT credits in case of companies opting for tax under section 115BAA.

4. Can a company opt out of this section?

The domestic companies who do not wish to avail this concessional rate immediately can opt for the same after the expiry of their tax holiday period or exemptions/incentives as mentioned in point 2 earlier.

However, once such a company opts for the concessional tax rate under section 115BAA of the Income Tax Act,1961, it cannot be subsequently withdrawn.

Minimum Alternate Tax (MAT) for Companies

MAT is equal to 15% from AY 2020-21 (18.5% till AY 2019-20) of Book profits (Plus Surcharge and cess as applicable). Book profit means the net profit as shown in the profit & loss account for the year.

Tax Audit for Companies

The accounts of a company must be audited each year, irrespective of turnover or profit/loss.

Due Date for filing Companies Tax Return
  • All companies registered in India are required to file income tax return on or before the 30th of September.
  • Even companies registered from January – March must file income tax return on or before 30th September of the same calendar year.
Tax Returns for Companies

Companies registered in India and operating a business for profit must file Form ITR 6. Private limited companies, limited companies and one person companies would be required to file Form ITR6.

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This information is in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Mind Sync does not accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any information provided herein. On any specific matter, reference should be made to the appropriate advisor.

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