Business Tax Filing Process & Due Dates

Business Tax Filing Process & Due Dates

All businesses operating in India are required to file an income tax returns each year. In addition to filing an income tax returns, a business may also be required to file a TDS return and pay advance tax to stay compliant under the Income Tax Act. TAXAJ is India’s largest tax services platform offering a range of services like incorporation, GST return filing, income tax filing and more. TAXAJ can help file income tax returns for your business and ensure it remains compliant with the Income Tax Act and Rules. The average time taken to file an income tax return for your business is 3 to 5 working days. Get a free consultation on business tax return filing by scheduling an appointment with a TAXAJ Advisor.

What is a business tax return?

A business tax return is basically an income tax return. The return is a statement of income and expenditure of the business. Also,  any tax to be paid on the profits made by you is declared in this return. The return also contains details of the assets and liabilities held by the business. Items like fixed assets, debtors and creditors of the business, loans taken and loans were given are declared here.

Who has to file a business tax return?

The filing of return mainly depends on the type of business structure. For example:

  • If you are a sole proprietor your business income and your other personal income like salary, income from house property and interest income have to be stated on the same return.
  • If your total income before deductions is above the basic taxable limit you need to compulsorily file your income tax return irrespective of profit or loss in your business.
  • The basic taxable limit is Rs. 2.5 lakh. So, if your income before deductions is above Rs 2.5 lakh you need to file your business tax return.
  • For companies, firms and Limited Liability Partnership (LLP) a business tax return has to be filed irrespective of profit or loss. Even if there are no operations undertaken, a return has to be filed.
  • Companies, firms, and LLPs are taxed at a rate of 30%.

Income Tax Audit

Every taxpayer whose turnover is above Rs. 10 Crore in case of businesses and Rs. 50 Lakh in case of professionals is required to get a tax audit done. The taxpayer has to appoint a Chartered Accountant to audit their accounts.

Also, a tax audit is required if there has been a loss of your business and you want to carry forward the loss. A tax audit is necessary even when the profits declared by you is less than 8% (6% on Digital transactions) of the turnover in case of business and 50%  of receipts in case of professionals.

Presumptive Taxation

Individuals, HUF, and Firms running businesses or providing services can offer their income to tax on a presumptive basis. Turnover up to which presumptive taxation is allowed for businesses is Rs. 2 Crore and for professionals is Rs. 50 Lakh.

Minimum of 8% of the turnover has to be offered as income under presumptive basis for businesses.  For professionals, 50% of professional receipts have to be declared on the business tax return.

What are the due dates for filing of returns?

For the Individuals not liable to tax audit, the last date for the filing of the return is 31st August after the end of the financial year (Belated return can be filed up-to 31st March subject to penalty) For individuals liable to tax audit and all other assesses like company, LLP or partnership firm, the due date is 30th September after the end of the financial year. For the FY 2017-18, this due date has been extended from 30 September 2018 to 31 October 2018.

The penalty for non-filing of returns- Any loss incurred during the year cannot be carried forward if the return is filed after the due date of filing income tax return.

Also a fine of Rs. 5000 under the section 271F can be levied on the assessee.

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