{"id":29355,"date":"2021-04-25T10:00:55","date_gmt":"2021-04-25T04:30:55","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=29355"},"modified":"2025-02-21T17:50:52","modified_gmt":"2025-02-21T12:20:52","slug":"itr-for-businesses","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/itr-for-businesses\/","title":{"rendered":"ITR for Businesses: Things you need to Know"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Filing a business tax return is\nfundamentally the process by which a firm has to disclose its income &amp;\nexpenses to the IT department. All businesses pan India, regardless of their size;\nhave to file ITR every year within the prescribed deadlines. Filling ITR for\nbusinesses is somewhat complicated as compared to the filing requirement of the\nindividual taxpayer.<\/p>\n\n\n\n<p>ITR for businesses refers to a statement reflecting the income and expenditure of the firm. If it reaps some profits, tax needs to be paid for the same under the company existing law. Apart from addressing tax liabilities, a business may also be required to <a href=\"https:\/\/corpbiz.io\/tds-return-filing\" title=\"TDS Return Filing\"><strong>file TDS<\/strong><\/a> (tax deduction at source) as per the applicable law. In this write-up, you will learn everything about filing ITR for businesses in detail.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/itr-for-businesses\/#Prerequisites_Regarding_ITR_for_Businesses\" >Prerequisites\nRegarding ITR for Businesses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/itr-for-businesses\/#Eligibility_Criteria_Relating_to_ITR_for_Businesses\" >Eligibility Criteria\nRelating to ITR for Businesses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/itr-for-businesses\/#Rate_of_Income_Rate_Applicable_to_the_Firms\" >Rate of Income\nRate Applicable to the Firms<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/itr-for-businesses\/#Applicability_of_the_Income_Tax_Audit\" >Applicability of\nthe Income Tax Audit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/itr-for-businesses\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Prerequisites_Regarding_ITR_for_Businesses\"><\/span>Prerequisites\nRegarding ITR for Businesses<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Filing business tax returns\nwill depend on the nature of the business-i.e. tax structure will depend on\nwhether you are operating as a proprietorship, partnership firm, LLP, or a\nprivate limited company.<\/p>\n\n\n\n<p>If you meet specific\nrequirements, you have to maintain a book of accounts.<\/p>\n\n\n\n<p>If you fulfill any of the given\ncondition as a business, then maintaining the books of accounts is\ncompulsory.&nbsp;Income is greater than Rs 1,20,000; or total sales, gross\nreceipts, or turnover greater than Rs. 10,00,000 in any of the three preceding\nyears.<\/p>\n\n\n\n<p>Businesses require using the\nSugam ITR-4 for ITR if they choose for the presumptive income scheme u\/s 44AD\nand 44AE of the Income Tax Act. Any business whose yearly revenue is well below\nRs 2 crore can choose to be taxed presumptively by the IT department. Such\ncompanies must declare a profit of 8% related to non-digital transactions or 6%\nfor digital transactions accordingly as per their case.<\/p>\n\n\n\n<p>When opting for a presumptive taxation scheme, a business can disclose its income at a predetermined rate and, in turn, does not need to confront the trouble of maintaining accounts. However, the presumptive taxation scheme is accessible to resident partnership firm (not limited liability partnership firm)<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/claiming-process-of-income-tax-refund\/\">What is the Claiming Process of Income Tax Refund?<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Eligibility_Criteria_Relating_to_ITR_for_Businesses\"><\/span>Eligibility Criteria\nRelating to ITR for Businesses<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If you are managing a sole proprietorship firm, your business income &amp; other personal income, such as income from house property and interest income, has to integrate under the same return. If your aggregate income is above the taxable limit of Rs 2.5 lakh, you have to <a href=\"https:\/\/corpbiz.io\/income-tax-return-filing\" title=\"Income Tax Return Filing\"><strong>file ITR<\/strong><\/a> without exceptions. Business owners below the age of 60 are liable to file the ITR if the total incomes surpass Rs 2.5 lakh. <\/p>\n\n\n\n<p>If the business owners serving the age between 60-80 years, filing ITR is compulsory if the aggregate income surpasses Rs 3 lakh. Meanwhile, the proprietors serving the age of 80 years and above are liable to file ITR if the aggregate income exceeds Rs.5 lakh. Below is the tabular representation for the same.<\/p>\n\n\n\n<p><strong>INFOGRAPHIC<\/strong><\/p>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  <strong>Individual\u2019s Age<\/strong>\n  <\/td><td>\n  <strong>Basic Exemption\n  (INR)<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>Below 60 years<\/strong>\n  <\/td><td>\n  2.5 lakh\n  <\/td><\/tr><tr><td>\n  <strong>Between 60-80\n  (Senior citizen) <\/strong>\n  <\/td><td>\n  3 lakh\n  <\/td><\/tr><tr><td>\n  <strong>80 years &amp;\n  above <\/strong>\n  <\/td><td>\n  5 lakh\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<p>For firms and LLPs, a business\ntax return must be filled regardless of the profit and loss. Even if such\nbusinesses have been out of operation for a while, return filing is mandatory.<\/p>\n\n\n\n<p>All partnership-based companies\nare liable to file an ITR every year, regardless of the income or loss. In the\nabsence of the business activity, a NIL ITR must be filed before the deadline.\nThe same rule is applicable to the companies working as an LLP in India. All\nregistered companies in our country are needed to file ITR every year,\nregardless of profit and loss. Even the dormant firm with no transaction record\nis subjected to filing ITR for businesses every year in India.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Rate_of_Income_Rate_Applicable_to_the_Firms\"><\/span>Rate of Income\nRate Applicable to the Firms<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>When looking at how to file ITR\nfor businesses, we need to explore the income tax rate for firms. The tax rate\napplicable to the LLPs and partnership firms is set to 30%. If income exceeds\nthe one crore mark, then an additional surcharge of 12% would be levied. Health\nand education cess @ 3% would be levied on the amount of tax estimated,\nincluding surcharge.&nbsp;<\/p>\n\n\n\n<p>The rate of tax for the\ncompanies operating in India is set to 30%. However, if the company&#8217;s annual\nrevenue does not surpass Rs 250cr in the preceding year, the company is liable\nto pay tax @ 25%.<\/p>\n\n\n\n<p>The applicability of surcharge\nwill depend on certain conditions. In a situation where income falls between Rs\n1-10 crore, the surcharge is 7% of the income tax amount will be applicable.\nThe surcharge of 12% shall be applicable to the amount exceeding the said\nlimit. The IT department renders marginal relief to firms in special cases.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Applicability_of_the_Income_Tax_Audit\"><\/span>Applicability of\nthe Income Tax Audit<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The IT department has laid down some provisions for the tax audit u\/s 44AB of the <em><strong>Income Tax Act 1961<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/The_Income-tax_Act,_1961\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>. The primary objective of the income tax audit is that a company or individual&#8217;s taxes are scrutinized by the external authority to determine all the details relating to income, expenditure &amp; deduction have been filed correctly. The IT department has mandated the Income-tax audit for all eligible taxpayers as per norms of Section 44AB of the Income Tax Act.<\/p>\n\n\n\n<p>An Income Tax audit serves different purposes. It makes sure that all the businesses should compulsorily maintain a book of account and other expenditures and revenue records systematically. A <strong><a href=\"https:\/\/corpbiz.io\/tax-audit\">tax audit<\/a><\/strong> also ensures that the aggregate incomes &amp; claims related to deductions are validly provided when filing the return. This mitigates the chance of fraud.<\/p>\n\n\n\n<p>Income tax audit applies to\nspecific categories of businesses. If a proprietor is carrying out a business\noperation and their sales revenue surpasses Rs 1 lakh, a tax audit is\ncompulsory. LLPs with a yearly turnover greater than Rs 40 lakh needs to audit\ntheir accounts by CAs, All categories of firms, be it privately held company or\nOPC need to get a tax audit done regardless of the annual turnover.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Filing ITR is a way of intimating the tax authorities about the total income that you have earned during a specific fiscal year and that you have addressed tax liability on that income accordingly. As per the existing income tax norms, it is only compulsory for a taxpayer to file an income tax return if his\/her income meets specific predetermined criteria. Hence, we can conclude filing ITR for businesses is also equally crucial for the employers seeking tax credit and other benefits from the government.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/income-tax-returns-which-is-the-correct-itr-form-for-you\/\">Income Tax Returns: Which is the Correct ITR Form for you?<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Filing a business tax return is fundamentally the process by which a firm has to disclose its income &amp; expenses to the IT department. All businesses pan India, regardless of their size; have to file ITR every year within the prescribed deadlines. Filling ITR for businesses is somewhat complicated as compared to the filing requirement [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":29371,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[10],"tags":[1690],"acf":{"service_id":"403"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":4316,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/29355"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=29355"}],"version-history":[{"count":7,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/29355\/revisions"}],"predecessor-version":[{"id":68842,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/29355\/revisions\/68842"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/29371"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=29355"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=29355"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=29355"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}