Sole proprietorship is a firm that is owned and managed by way of the sole proprietor. inside the eyes of regulation, there is no difference between the owner and the only proprietorship and are dealt with as one.
- Income Tax Return
The only proprietorships are required to record annual income tax go back all through each monetary yr, until they're exempted. Further, the income rate relevant in this sole proprietorship company is equal to that of an owner.
The earnings Tax go back may be filed both physically or on line thru e-filing portal of profits Tax. The sole proprietorship firms can report their income tax go back through ITR-3 or ITR-four.
ITR-3 shape: ITR-three form is to be filed through the proprietor having earnings below the head 'earnings or gains of enterprise or career'.
ITR-4 shape:ITR-4 or SUGAM form is applicable for sole proprietorship firms having total earnings as much as ₹50 lakh and having income from enterprise and profession which is computed on a presumptive foundation. - TDS Return Filing
The TDS return is to be filed wherein the owner has a valid TAN and the type of go back to be filed relies upon the reason of deduction. The types of TDS go back are:
Form 24Q - TDS on income
Shape 27Q – TDS wherein deductee is a non-resident, foreign organisation
Form 26QB – TDS on price for transfer of immovable assets
Form 26Q – TDS in any other case. - GST Return filing
The proprietor wishes to get his sole proprietorship registered for GST, if the combination enterprise turnover exceeds Rs. 20 lacs. As consistent with the GST Act, the GST Returns are to be filed if the taxpayer is registered under GST.
The returns to be filed for Sole Proprietorship firms registered under GST are GSTR-1 and GSTR-3B. Those returns contain the details of outward and inward supplies of taxable items and offerings, fee of taxes and are to be filed monthly or quarterly, as in keeping with the scheme availed via the owner. - Accounting and bookkeeping
The sole proprietor is required to maintain books of account, if the sale/turnover/gross receipts from the business is more than Rs. 25,00,000 or the income from business is more than Rs. 2,50,000 in any of the 3 preceding years. - Tax Audit
Sole proprietors are required to have a tax audit carried out if the sales, turnover or gross receipts of business exceed Rs. 1 crore in the financial year. However, he may be required to get their accounts audited in certain other circumstances.
List of documents required for compliance of Sole Proprietorship
- PAN Card
- Aadhaar Card
- GST number, if applicable
- Details of sales and purchases
- MSME registration, if applicable
- Bank statements
- Credit card statements, if any
Frequently asked Questions
Late filing or non filing of Income Tax Return on or before the due date, will attract a penalty of Rs. 200 per day.
Only a practicing chartered accountant can conduct an audit of a proprietorship firm.
Income tax returns of the proprietorship firms can be filed online or offline.
Late filing or non filing of GST Return on or before the due date, will attract a penalty of Rs. 200 per day.
As the proprietor and the proprietorship are one and the identical, hence, there is no formality needed for closing a proprietorship firm.
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