Proprietorship Tax Return Filing

Proprietorship Tax Return Filing— Proprietorship tax return filing is a crucial aspect of managing a sole proprietorship in India. The growth of proprietorships in India is increasing due to the ease of starting and managing such businesses. As more individuals venture into entrepreneurship, understanding the importance of tax return filing becomes essential for sustaining growth. It also serves as a foundation for financial accountability and compliance.

Filing tax returns can unlock opportunities for claiming various deductions and exemptions available under Indian tax laws, significantly reducing overall tax liabilities. Filing tax returns not only fulfills a legal obligation but also provides documented proof of income, which is vital when seeking loans or credit facilities from financial institutions. Prakasha & Co offers proprietorship tax return filling services for managing the businesses easily.

Step-by-Step Guide to File Proprietorship Tax Return 

Filing taxes as a sole proprietor involves reporting your business income and expenses on your tax return. This process is relatively straightforward, as the income generated from your sole proprietorship is taxed as personal income. You will primarily use Schedule C to report your business’s profit or loss, which is then transferred to your Form 1040. Additionally, self-employment taxes must be calculated and reported using Schedule SE. Here’s a step-by-step guide to help you through the filing process.

Process of Filing Proprietorship Tax Return:

Gather Required Documents

Ensure you have your PAN card, Aadhar card, and bank account details. Collect all relevant financial documents, including Form 16, 16A, and 26AS.

Determine Your Tax Identification Number

Use your PAN for all tax-related transactions since a proprietorship has no separate legal entity.

Calculate Business Income and Expenses 

Use the formula: Total Business Income−Business Expenses=Taxable Business Incom

Complete Schedule C

Fill out Schedule C (Profit or Loss from Business) with your income and expenses. Include all sources of income, such as payments reported on various 1099 forms.

Transfer Data to Form 1040

The final amount from Schedule C should be entered on Schedule 1 of Form 1040, consolidating your total income.

Calculate Self-Employment Tax

Complete Schedule SE to determine your self-employment tax liability, which covers Social Security and Medicare contributions.

File Your Tax Return 

Submit your completed Form 1040 along with Schedule C and Schedule SE either electronically through an e-filing portal or physically by mail.

Choose a Verification Method

If filing electronically, select either immediate e-verification or manual verification options.

Review and Submit Your Return

Before final submission, review all entries for accuracy to avoid any errors that could lead to penalties.

Complete Final Verification

If you opted for electronic filing, ensure you complete the verification process within the specified timeframe using OTP or EVC methods.

Documents Required for Proprietorship Tax Return Filing

When filing a tax return for a proprietorship, it’s essential to gather all the necessary documents to ensure accurate reporting of income and expenses. The documents required for proprietorship tax filing include financial records such as income statements, balance sheets, and proofs of expenses, along with identification details. These documents help in determining the correct taxable income and ensuring compliance with tax laws.

Documents Required:

• Income and expenditure statements or profit and loss accounts.
• Balance sheet for the relevant financial year.
• Bank statements for the financial year.
• Proof of tax payments made (TDS certificates, advance tax receipts).
• GST returns and invoices (if applicable).
• Details of other income (e.g., rental income, interest income).
• Investment proof for claiming deductions (like 80C).
• PAN card copy of the proprietor.
• Aadhaar card copy of the proprietor.
• Documents related to any loans or advances taken by the business.

Deadline for Proprietorship Tax Return Filing

The deadline for filing a tax return for a proprietorship depends on whether the business is required to have an audit. Ensuring timely compliance helps in smooth business operations and financial planning.

Here are the deadlines for proprietorship tax return filing in points:

31st July: Deadline for non-audited proprietorships to file tax returns.

30th September: Extended deadline for proprietorships that require an audit.

Revised Return: Can be filed within one year from the end of the assessment year.

Late Filing Penalty: Penalties apply if the return is filed after the due date, under Section 234F.

Interest on Unpaid Tax: Applicable if the tax due is not paid by the deadline.

Why Partner with Prakasha & Co for Proprietorship Tax Return Filling?

Partnering with Prakasha & Co. for proprietorship tax return filing assures business owners of professional guidance and efficient handling of tax matters. Their expertise ensures that all filings are accurate, timely, and compliant with the latest tax regulations, saving proprietors time and minimizing the risk of errors or penalties. By choosing Prakasha & Co., proprietors can benefit from personalized solutions tailored to their specific business needs, ensuring optimal tax planning and maximized savings.

Key Features:

• Expertise in handling proprietorship tax filings with precision.
• Timely filing to avoid penalties and interest.
• Personalized consultation based on individual business needs.
• In-depth knowledge of Indian tax laws and regulations.
• Comprehensive tax planning for optimal savings.
• Assistance in maintaining proper tax records and documentation.
• Transparent pricing with no hidden fees.
• Dedicated customer support to address any queries.

Contact Prakasha & Co. At 

Address: 188/1, Sahakarnagar, Bangalore-92

Phone: +91 7019 827 351

Email: Prakashaandco@gmail.com