File your ITR Hassle-Free and Maximise your Refunds
Trusted by 1 Million+ Users
4.8 Star User Rating
Authorized by Tax Department
If you are a business owner, it is essential to learn about the complexities involved in tax filing. All businesses are required to file their tax returns. However, the complexities involved in the taxation system make it important to understand its aspects. This article will help you understand more about business tax return filing, what is business taxation and company tax return.
A business tax return functions similarly to an income tax return. It provides a comprehensive overview of the business's earnings and expenses. Moreover, it discloses any taxes owed on the profits generated. Additionally, the return includes a breakdown of the business's assets and liabilities, such as fixed assets, outstanding debts, and loans received or issued.
The requirement to file a tax return primarily depends on the type of business structure in place. Here are some examples -
In essence, the filing of tax returns is determined by the nature of the business entity and the income thresholds set by tax authorities.
There are various types of business tax filing on the basis of business entities that are filing these returns.
An income tax audit is required when the taxpayer’s turnover exceeds Rs.1 crore for businesses and Rs.50 lakhs for professionals. In this case, the taxpayers are required to appoint a CA to get their accounts tax audited.
You also need to get a tax audit done if you have incurred a loss in the business and you want to carry forward the loss. A tax audit becomes mandatory even if the profits declared by you are 8% (6% on digital transactions) on turnover for businesses and 50% for professionals.
Individuals, HUFs, and firms can opt for a presumptive income tax scheme. Businesses having a turnover of upto Rs.2 crores can opt for a presumptive taxation scheme, and professionals with annual income upto Rs.50 lakh can opt for a presumptive income scheme.
Businesses have to offer minimum 8% of their turnover to tax and professionals have to offer 50% of their professional receipts to presumptive taxation.
For individuals not subject to tax audits, the deadline for filing returns is August 31st, following the end of the financial year. A belated return can be filed until March 31st with a penalty. For individuals subject to tax audits and other entities like companies, LLPs, or partnership firms, the deadline is September 30th after the end of the financial year.
If returns are filed after the due date, any losses incurred during the year cannot be carried forward for offset against future income.
Additionally, a penalty of Rs. 5000 under section 271F may be imposed on the assessee for non-filing of returns.
As a business owner, it can be difficult to find time to manage your taxes. However, it is necessary for business owners to file their tax returns. From maximizing tax savings to maintaining tax compliance, our tax experts can ensure a smooth tax journey for you. Get Tax Consultation Now!
If you need assistance with filing your business tax return, you can book an eCA with tax2win for accurate return filing.
A tax return is a document that reports income, expenses, and other necessary tax details as outlined in a specific form. Similarly, business tax return filing entails submitting an income tax return along with additional documentation for Tax Deducted at Source (TDS) for businesses, and this process must be completed annually. This return serves as a statement of the company's earnings and expenditures.
Given below are the major types of business taxes -
ITR-3 is designed for individuals and Hindu Undivided Families (HUFs) who earn income from profits and gains derived from business or profession. It can be considered a comprehensive form because it allows individuals or HUFs to report all their various sources of income in one place.
The most common types of businesses include sole proprietorships, partnerships, corporations, and S corporations. Additionally, a limited liability company (LLC) is a business structure permitted by state law.
An individual or HUF having income from business or profession and who is not eligible to file ITR-1, ITR-2 or ITR-4 can file ITR-3.
Goods and Services Tax (GST) is a value-added tax applied to the supply of goods and services for consumption within a country. It serves as a comprehensive, unified indirect tax system for the entire nation. GST is incorporated into the final price of a product or service.
