Sole Proprietorship Compliances

Proprietorship firms file the Proprietor income tax return just like the LLPs and the Companies registered in India. In the legal sense, the proprietorship and the proprietor are considered to be one. Hence, the income tax return filing of the proprietor and the proprietorship are the same.

 

As a sole proprietorship is not taxed as a different legal entity, the business owners file their business taxes like their individual returns. Like any other individual taxpayer, a proprietorship firm is also entitled to a proprietorship tax deduction as per the prevailing Income tax rules and depending on the slab rates applicable to his income whereas the income tax rates for the registered companies are assessed on flat rates.

Choose Your Package

Silver

₹ 5799/-

  • Turnover Upto 10 Lakhs
  • Accounting Book Keeping up to 100 Transactions
  • Dedicated Accountant
  • Bank Statement Reconciliation
  • Financial Statement Preparation
  • Income Tax Return Filing

Gold

₹ 14799/-

  • Turnover Upto 25 Lakhs
  • Accounting Book Keeping up to 100 Transactions
  • Dedicated Accountant
  • Bank Statement Reconciliation
  • Financial Statement Preparation
  • Income Tax Return Filing
  • 1 Year GST Return Filing upto 100 entries (12 GSTR-3B and 4 GSTR-1)

Platinum

₹ 19799/-

  • Turnover Upto 50 Lakhs
  • Accounting Book Keeping up to 100 Transactions
  • Dedicated Accountant
  • Bank Statement Reconciliation
  • Financial Statement Preparation
  • Income Tax Return Filing
  • 1 Year GST Return Filing upto 100 entries (12 GSTR-3B and 4 GSTR-1)
  • TDS Compliance

 

 

Compliances Required By Sole Proprietorship

 

 

GST Return 

 

The proprietorship firms registered under GST are required to file the GST return on a monthly, quarterly and annual basis. GST return is a document that contains the details of the income of the taxpayer. As filing of GST returns is mandatory for all the registered Taxpayers. Main returns to be filed are GSTR-3B (which is a monthly summary) and GSTR 1 (details of outward supplies).

 

 

Accounting 

 

The accounting for a sole proprietorship does not require a separate set of accounting records, since the owner is considered to be inseparable from the business. However, it is always advisable to maintain records for business activities of a Proprietorship firm, in order to judge whether these operations are generating a profit.

 

 

Income Tax Return 

 

The proprietorships registered in India are required to file income tax returns. As the proprietors and the proprietorships are the same the income tax return filing for the proprietor and proprietorship is the same. Under the Income-tax Act, all the proprietors below the age of 60 will file ITR only if the total income exceeds Rs. 2.5 lakhs. If the proprietor is over 60 years and below 80 years, he should file ITR only if his income exceeds Rs. 3 lakh. Proprietors over the age of 80 years are required to file income tax if the income exceeds Rs. 5 lakh.

 

 

Tax Audit 

 

An audit is required for the proprietorship firms if the total sales are over Rs. 1 crore during the financial year.In a professional case, an audit is necessary if the total gross receipts are more than Rs.50 lakhs during the financial year assessment.Also, an audit is required for any proprietorship firm under a presumptive taxation scheme irrespective of turnover if the income claimed is lower than the deemed profits and gains under the scheme. Audit for Proprietorship for income tax purposes must be conducted by a practicing Chartered Accountant.

 

 

 

Effects Of Non- Compliance

 

 

The failure to fulfill sole proprietorship Compliance requirements levies a penalty. Hence,it is advisable to fulfill the requirements.

 

 

 

Be Compliant With UpriseLegal

 

 

With our experienced and skilled personnel, We at UpriseLegal provides a comprehensive sole proprietorship compliance service  at a very affordable prices.We follow law to the core and uses our knowledge to avoid any hassles in your business so that you can rise and grow! You may get in touch with our compliance manager on 9173512402 or email us at [email protected] for free consultation