Income tax return filing for business

Income tax return filing for business income, by leading income tax e-filing service provider in Chennai.

Income tax return filing for small business package

ITR-4 income tax return filing.
Turnover up to Rs.20 lakhs.

What are the details required for small business income tax return filing ?

Income tax e filing login details.
Bank statement for the financial year.
Previous year financial statements (P&L, Balance Sheet along with schedules, Depreciation statement).
Details of other income such as bank interest, capital gains, income from house property, etc.
Details of Chapter VI-A deductions such as life insurance, school fees, housing loan, etc.
Filled up checklist.

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How to file income tax return filing for business?

Income tax return filing for business is declaring income earned under the head “Profits and gains from business or profession”. For small business income tax return filing tax audit is not required for other business income tax audit is mandatory. For small business income tax return filing presumptive scheme income tax e-filing option is available. Income tax return filing for business will be accompanied by financial statements such as profit and loss account, balance sheet, and depreciation statements in general.

Pricing:

₹Rs.5000

Process for small business income tax return filing

Income tax consulting

Our income tax consultant will have a discussion to understand the nature of the business, applicable ITR filing form for small business, tax compliances required, level of tax compliance by the client.

Verification of documents and records

Verification of the previous year's income tax return filing documents. Compilation of data from AIS, TIS, Form 26AS of income tax portal, and GST portal is carried out.

Preparation of financial statements

Preparation of financial statements with data and bank statements provided by the client. The profit and loss account balance sheet will be prepared with all the data required for small income tax business return filing.

Discussion with client

Discussion with the client is carried out after sending draft income tax return filing documents, tax payable or refund is communicated and required self-assessment tax will be paid.

Preparation of Income tax return

Income tax return will be prepared after approval by the client, ITR submitted online is e-verified using OTP sent to the client's Aadhaar-linked mobile no.

Handover documents and advisory

The client will be provided with a hard copy of the filed income tax return filing papers. Detailed information regarding compliance deviation in the current year and steps required to correct it in the future will be provided, which will assist them to ensure long term business income tax compliance.

Who are required to file business income tax returns, and what are the benefits available to them?

Common points on income tax return filing for sole proprietor business

Individuals carrying business as sole proprietor need to file business income tax return even if his/her total income is less than the basic exemption limit if
1. Turnover or gross receipts for small business is more than Rs.60 lakhs in a financial year.
2. Gross receipts in profession exceeds Rs.10 Lakhs during the previous year.
3. Total tax deducted or collected during the financial year is Rs.25,000 or more, this limit is increased to Rs.50,000 in the case of senior citizens. The information regarding the total amount of TDS or TCS can be gathered from form 26AS.
Tax audit U/s 44AB is applicable along with income tax return filing, if the turnover from the business Exceeds Rs.1 crores, the limit is increased to Rs.10 crores if cash payments and cash receipts in business do not exceed 5 % in a financial year.
Mandatory Tax audit U/s 44AB is not applicable if the taxpayer opted for presumptive taxation U/s 44AD, this will help them to reduce or save income tax for business income. Benefits of section 44AD presumptive taxation are available to eligible small businesses if turnover does not exceed Rs.2 crores in the financial year, and 8% of turnover or gross receipts are considered as profits from the business. In the case of the profession, the limit is Rs.50 lakhs and 50 % of gross receipts are deemed as profits from the profession. Conditions for availing presumptive taxation have to be complied with.
If turnover is above Rs.1 crore and up to Rs.2 crore, the profit from the business can be declared lower than 8 % of gross receipts only if the audit is conducted U/s 44AB. If turnover is up to Rs.1 crores, a profit below 8 % can be declared without audit.
The benefits of presumptive taxation for professional is available if their gross receipts does not exceed
Rs.50 lakhs U/s.44ADA. The benefit for presumptive taxation for professional income is applicable for income tax return filing for doctor and medical professionals, income tax return filing for engineer, and other professionals as per section 44AA.
It is always recommended to declare actual profit even if the profit is above 8 % of turnover, the declaration of higher actual income will give benefits of increased creditworthiness for long-term business growth and development by additional term loan or overdraft facility. If we look at the advanced tax planning aspect, capital available with the firm will be lesser in papers but however actual capital will be higher as unreported profit will not be considered.

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Frequently Asked Questions

We make it easy for you to find the answer to frequently asked questions here...

How to carry forward business loss ?

Carry forward of business loss is allowed up to the next 8 years from the relevant financial year, unabsorbed loss after 8 financial years will expire, Income tax return before the due shall be filed to be eligible for carry forward of business loss subject to compliance of other rules and regulations.

I had filed my income tax return U/s 44AD and I do not have financial statements, how to get financial statements for bank loan processing ?

Financial statements for returns filed under section 44AD can be prepared even after filing the return, but it is advisable to prepare only before the filing of a return due to complexity in preparation after filing the returns. Section 44AD presumptive taxation is beneficial on the basis of the reduced tax amount as the profit to be declared is only 8%, however, we need to take care of other factors such as the preparation of financial statements and compliance with rules to be complied with for presumptive taxation, reversal of benefits availed under presumptive taxation in case the rules are not complied with.

My turnover is less than 1 crore can I opt for 44AD presumptive taxation ?

If income is up to 1 crore lower profits can be declared without availing the benefit of section 44AD, the only difference is profit can be declared even below 8 % and financial statements need to be prepared mandatorily for filing an income tax return.