Business Tax Filing
Business Tax Return Guide
Comprehensive compliance for modern Indian businesses.
What is a Business Tax Return?
A business tax return is an official statement submitted to the Income Tax Department that summarizes your business’s financial activity during a financial year.
Who is Required to File?
| Entity Type | Requirement |
|---|---|
| Individuals / Proprietors | Mandatory if income exceeds ₹2.5 Lakh or if loss occurs. |
| Firms, LLPs, & Companies | Compulsory irrespective of profit, loss, or activity. |
Note: Corporate entities are generally taxed at a flat rate of 30% plus applicable surcharges.
Filing by Business Structure
Sole Proprietorship
Business income is added to personal income; owner files in individual capacity.
Partnership / LLP
Separate legal entities. Must file returns regardless of profit or loss levels.
Private/Public Ltd
Mandatory filing every year, even for inactive or "dormant" companies.
Income Tax Audit Applicability
A tax audit ensures that financial records are accurate and compliant with laws.
- Turnover > ₹1 Crore (Business)
- Turnover > ₹10 Crore (95% digital transactions)
- Receipts > ₹50 Lakh (Professionals)
- Carrying forward business losses.
- Declaring income lower than presumptive limits.
Presumptive Taxation Scheme
Simplifies compliance for small businesses (Turnover up to ₹2 Cr) and professionals (up to ₹50 Lakh).
Rules: Businesses declare 8% (or 6% for digital) of turnover. Professionals declare 50% of receipts. No need for detailed book-keeping.
Company Categorization
| Category | Registration Status | Governance |
|---|---|---|
| Domestic Companies | Registered in India | Ministry of Corporate Affairs (MCA) |
| Foreign Companies | Registered Outside India | Ministry of Corporate Affairs (MCA) |
Note: Filing is mandatory every year, even if there is no business activity.
Income Tax Audit Applicability
Audit is mandatory if the following thresholds are met:
Business
Turnover exceeds ₹1 Crore (Increased to ₹10 Crore if cash transactions < 5%).
Professionals
Gross receipts exceed ₹50 Lakh annually.