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Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Rohit Agarwal
Founder. TechEdge Solutions
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Meera Sharma
CEO BlueWave Technology
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Rohit Agarwal
Founder. TechEdge Solutions
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Meera Sharma
CEO BlueWave Technology
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Rohit Agarwal
Founder. TechEdge Solutions
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Meera Sharma
CEO BlueWave Technology
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Rohit Agarwal
Founder. TechEdge Solutions
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Meera Sharma
CEO BlueWave Technology
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Rohit Agarwal
Founder. TechEdge Solutions
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Meera Sharma
CEO BlueWave Technology
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Rohit Agarwal
Founder. TechEdge Solutions
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Meera Sharma
CEO BlueWave Technology
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Rohit Agarwal
Founder. TechEdge Solutions
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Meera Sharma
CEO BlueWave Technology
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Rohit Agarwal
Founder. TechEdge Solutions
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Meera Sharma
CEO BlueWave Technology
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Priya Reddy
Co founder, Green leaf ventures
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
Vikas Singh
Director. BrightSpark Innovations
Incorporating my private limited company was smooth and stress free. The professional Guidance and timely updates made the whole experience exceptional.
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Running a Sole Proprietorship in India involves fulfilling essential financial and legal responsibilities to ensure smooth operations and compliance with tax regulations. This includes filing Income Tax Returns, TDS Returns, GST Returns, EPF Returns, maintaining accurate accounting records, and, in certain cases, completing a Tax Audit.
Proprietorship Overview
A sole proprietorship is the simplest business structure in India, where one individual fully owns and manages the business.
Proprietorship Overview
A sole proprietorship is the simplest business structure in India, where one individual fully owns and manages the business.
Income Tax Return Filing for Proprietorship
For tax purposes, a proprietorship is treated as an extension of its owner, meaning that the income tax rules for individuals apply directly. Since proprietorships are not considered separate legal entities, the proprietor's PAN is used for filing returns on behalf of the business.
Is ITR Filing Necessary for Proprietorships?
Yes, under the Income Tax Act, proprietorships must file returns if the proprietor's income exceeds the threshold based on age:
Income Tax Slab Rates for Proprietorships
| Proprietor's Age | Net Income Range | Rate of Income Tax (%) |
|---|---|---|
| Below 60 Years | Up to ₹2,50,000 | - |
| Below 60 Years | ₹2,50,001 to ₹5,00,000 | 5 |
| Below 60 Years | ₹5,00,001 to ₹10,00,000 | 20 |
| Below 60 Years | Above ₹10,00,000 | 30 |
| 60-80 Years | Up to ₹3,00,000 | - |
| 60-80 Years | ₹3,00,001 to ₹5,00,000 | 5 |
| 60-80 Years | ₹5,00,001 to ₹10,00,000 | 20 |
| 60-80 Years | Above ₹10,00,000 | 30 |
| Above 80 Years | Up to ₹5,00,000 | - |
| Above 80 Years | ₹5,00,001 to ₹10,00,000 | 20 |
| Above 80 Years | Above ₹10,00,000 | 30 |
Alternate Tax Regime (Section 115BAC)
Under this regime, proprietors can opt for simplified tax rates by forfeiting specific exemptions and deductions, offering flexibility based on income levels.
| Net Income Range | Rate of income-tax (%) (FY 2022-23) | Rate of income-tax (%) (FY 2023-24) |
|---|---|---|
| Up to ₹2,50,000 | - | - |
| ₹2,50,001 to ₹3,00,000 | 5 | - |
| ₹3,00,001 to ₹5,00,000 | 5 | 5 |
| ₹5,00,001 to ₹6,00,000 | 10 | 5 |
| ₹6,00,001 to ₹7,50,000 | 10 | 10 |
| ₹7,50,001 to ₹9,00,000 | 15 | 10 |
| ₹9,00,001 to ₹10,00,000 | 15 | 15 |
| ₹10,00,001 to ₹12,00,000 | 20 | 15 |
| ₹12,00,001 to ₹12,50,000 | 20 | 20 |
| ₹12,50,001 to ₹15,00,000 | 25 | 20 |
| Above ₹15,00,000 | 30 | 30 |
Surcharge Rates
| Nature of Income | Up to ₹50 lakhs (%) | ₹50 lakhs to ₹1 crore (%) | ₹1 crore to ₹2 crores (%) | ₹2 crores to ₹5 crores (%) | More than ₹5 crores (%) |
|---|---|---|---|---|---|
| Short-term capital gain (Section 111A or 115AD) | Nil | 10 | 15 | 15 | 15 |
| Long-term capital gain (Section 112A or 115AD, Section 112) | Nil | 10 | 15 | 15 | 15 |
| Dividend income (not under special rate sections) | Nil | 10 | 15 | 15 | 15 |
| Unexplained income (Section 115BBE) | 25 | 25 | 25 | 25 | 25 |
| Any other income | Nil | 10 | 15 | 25 | 37 |
Presumptive Taxation Scheme for Proprietorships
The Presumptive Taxation Scheme under Section 44AD simplifies tax for small businesses, allowing taxes to be calculated based on presumptive income and minimizing record-keeping obligations.
ITR Filing Deadlines
TDS Return Filing
If proprietors hold a TAN, TDS returns are mandatory and vary based on the type of deduction (e.g., salary, property, non-residents).
GST Return Filing
For businesses exceeding a turnover of ₹20 lakhs, GST registration is required, and GSTR-1 and GSTR-3B forms must be filed regularly.
EPF Return Filing
Employers with 20+ employees must register for EPF and file periodic EPF returns.
Accounting and Bookkeeping
Proprietors with a turnover over ₹25 lakhs or business income over ₹2.5 lakhs are required to maintain proper records.
Audit Requirements
Audits are mandatory for businesses with:
Streamline Proprietorship Compliance with OnEasy
OnEasy is here to support all compliance needs for sole proprietorships. We offer seamless Income Tax Return filing, TDS return assistance, and hassle-free GST filing, covering both GSTR-1 and GSTR-3B. OnEasy also provides EPF return filing and other essential compliance services. With OnEasy's expert team and intuitive platform, proprietors can focus on growing their business while we handle compliance, ensuring financial accuracy and regulatory adherence. Ready to simplify your proprietorship compliance with OnEasy? Get started today!
FAQ
Frequently Asked Questions
A sole proprietorship is the simplest business form in India, where one individual owns and operates the business. This setup doesn't distinguish between the owner and the business for tax purposes.
Yes, proprietorships must file income tax returns based on the income and age of the proprietor. Filing within deadlines is essential, especially for claiming deductions and carrying forward any losses.
Proprietorships are taxed according to the personal tax slab rates of the proprietor, with varying rates based on age and income range.
Proprietorships must comply with various tax and regulatory requirements, including income tax return filing, GST return filing (if applicable), TDS returns, EPF returns, and maintaining accurate accounting records.
Proprietorships with annual turnover exceeding Rs. 20 lakh (Rs. 10 lakh for specific states) must register for GST. Registered proprietorships are required to file regular GST returns, such as GSTR-1 and GSTR-3B.
The Presumptive Taxation Scheme under Section 44AD is available for small businesses. It allows proprietors to pay taxes based on a presumed income, simplifying compliance by reducing the need for detailed accounting.
An audit is required if a proprietorship's turnover exceeds Rs. 5 crore (or Rs. 50 lakh for professionals) or if the business opts for certain presumptive tax schemes. The audit must be conducted by a certified Chartered Accountant.
Proprietorships generally use ITR-3 for business income filings. If opting for presumptive taxation, ITR-4 can be used, which simplifies the filing process for small taxpayers.
The due date varies: if no audit is required, the deadline is July 31st; if an audit is needed, the deadline is September 30th; for businesses with international transactions, the due date is November 30th.
If a proprietorship has a valid Tax Deduction Account Number (TAN) and makes specific payments requiring TDS, it must file TDS returns quarterly. Examples include TDS on salaries, property sales, and other payments to contractors.