Shweta Saboo & Co.

Proprietorship Tax Return Filing

A sole proprietorship is not considered a separate legal entity from its owner under Indian law. Therefore, the proprietor's business income is taxed as individual income under the Income Tax Act, 1961.

Filing the income tax return for a proprietorship is crucial for maintaining legal compliance, claiming eligible deductions, building a financial record for loans, and avoiding penalties.

Whether you operate a small business, are a consultant, or offer professional services, timely and accurate tax return filing ensures you maximize savings and stay hassle-free during assessments.

Our expert-assisted filing services help you seamlessly prepare and file your proprietorship tax returns with complete accuracy and compliance.

Key Features

Single Filing for Proprietor and Business

File business and personal income under a single Income Tax Return (ITR) based on your applicable income tax slab.

Support for All Types of Proprietorships

Filing for business owners, freelancers, professionals, and small traders across sectors.

Expert Guidance on Deductions and Expenses

Claim deductions for eligible business expenses, depreciation, home office expenses, and other tax-saving investments.

Compliance with Presumptive Taxation Schemes

Filing under Section 44AD (businesses) and Section 44ADA (professionals) for eligible taxpayers to simplify returns.

GST and TDS Compliance Support

Integration with GST returns and TDS filings, ensuring a complete tax ecosystem is managed.

Error-Free Computation and Filing

Ensure accurate profit/loss computation, balance sheet preparation (if applicable), and final tax filing.

Income Tax Return Acknowledgment and E-Verification

Timely e-filing with e-verification using Aadhaar OTP, Netbanking, or Electronic Verification Code (EVC).

Information Checklist

Personal Information:

PAN Card of Proprietor
Aadhaar Card
Bank Account Details (for refund credit)
Business Name and Address Details

Business Income Details:

Turnover/Sales Details
Purchase and Expense Bills
Profit and Loss Statement (if maintained)
Bank Statements for the Financial Year
GST Returns filed (if registered under GST)

Expense Details:

Rent Payments (if any)
Salary Payments to Staff
Utility Bills (electricity, internet, telephone, etc.)
Business Travel and Conveyance Expenses
Depreciation Details on Fixed Assets

Tax Payment Details:

Advance Tax Payment Challans (if paid)
TDS Certificates (Form 16A, if any)

FAQs

Which ITR form should a sole proprietor file?

A sole proprietor needs to file ITR-3 if maintaining regular books of accounts or ITR-4 if opting for the presumptive taxation scheme under Section 44AD or 44ADA.

Is the income from proprietorship taxed separately?

No, the income from the proprietorship is added to the proprietor's individual income and taxed according to the applicable individual income tax slab rates.

What is the due date for filing a proprietorship tax return?

For proprietors requiring audit, the due date is usually 31st October. For non-audit cases, the due date is 31st July of the assessment year.

Is audit mandatory for proprietorship firms?

Audit is mandatory if the turnover exceeds ₹1 crore for businesses (₹10 crore if cash transactions are minimal) or ₹50 lakh for professionals in a financial year.

Can I file my proprietorship return under presumptive taxation?

Yes, eligible businesses and professionals can file returns under Section 44AD (businesses) and Section 44ADA (professionals) to simplify tax calculations without maintaining detailed books of accounts.

Are GST returns linked with proprietorship tax returns?

Yes, if you are registered under GST, the turnover as per GST returns should match the turnover reported in the income tax return to avoid mismatches and scrutiny.

Can business losses of a proprietorship be carried forward?

Yes, business losses can be carried forward for up to 8 years if the ITR is filed within the due date. Losses can be set off against eligible income in future years.

Do I need to pay advance tax as a proprietor?

Yes, if your total tax liability for the year exceeds ₹10,000, you are required to pay advance tax in four installments as per specified due dates.

Can a salaried person also run a proprietorship?

Yes, a salaried person can also operate a proprietorship simultaneously. Both salary and business income must be reported while filing the ITR.

What happens if I fail to file my proprietorship return on time?

Late filing can attract penalties up to ₹5,000 under Section 234F, loss of carry-forward benefits for losses, and interest on outstanding taxes under Sections 234A, 234B, and 234C.