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Partnership firms must understand the income tax rate for partnership firm and ensure to file the returns on or before the specified deadline.
The submission of tax returns as per partnership firm tax rate is a fundamental responsibility for Partnership Firms in India. At LegallensIndia, we recognize the importance of complying with Indian taxation of partnership firm and the potential advantages associated with it. Our comprehensive services are meticulously crafted to aid business proprietors in navigating the intricate landscape of compliance. To simplify these compliance duties, LegallensIndia offers expert guidance, streamlining the process and eliminating hassles for business owners.
By partnering with us, you can ensure compliance with income tax on partnership firms and explore opportunities to optimize your tax benefits as per income tax rate for partnership firm, enabling your business to thrive while adhering to tax regulations.
A partnership firm is a business entity formed by two or more individuals working together under a single enterprise. There are two main categories of partnership firms:
Partnership, in essence, is an agreement entered into by two or more persons who have mutually consented to share the profits or losses arising from a jointly conducted business. The individuals involved in a partnership arrangement are individually known as partners and collectively referred to as a firm. Partners need to be aware of the partnership firm tax rate and how it affects the distribution of profits. Partners are responsible for maximizing firm advantage, fair dealings, and maintaining accurate records with full transparency for all partners' benefit.
Every partnership firm in India is obligated to file income tax returns annually as per partnership tax rate, regardless of whether the firm has generated income or incurred losses during the financial year. Understanding the partnership firm tax rate (30%) is crucial for making informed financial decisions within the business. Even if there was no business activity and the partnership firm's income is zero (NIL), filing an NIL income tax return within the stipulated income tax return for partnership firm due date is still mandatory.
Under the provisions of the Income Tax Act 1961, a partnership firm in India is subject to the following partnership firm income tax slab percentages:
Similar to income tax applicable for a company, partnership firms are subject to minimum alternate Tax under the taxation of partnership firm. A minimum alternate tax of 18.5% of adjusted total income is applicable. Hence, income tax payable by a partnership firm's profits cannot be less than 18.5 percent (increased by income tax surcharge, education cess, and secondary and higher education cess).
When computing the liability of income tax on partnership firm as usual based on partnership tax rate, deductions are permitted for the following:
Partnership Firms can file their ITR for income tax on partnership firms through Form ITR-4 or ITR-5.
ITR-4 is to be filed by those partnership firms which are a Total Income of up to 50 lakh and have income from Business and Profession, which is computed under presumptive basis.
ITR-5 is to be filed by those partnership firms who are required to get their account audited.
The deadline for filing ITR for a partnership firm depends on whether an audit is required:
Every GST-registered person is required to file GST Returns, and every partnership firm is required to be under GST if its aggregate annual turnover exceeds Rs. 20 lacs. Usually, the GST-registered partnership firms have to file GSTR-1, GSTR-3B, and GSTR-9 returns. If the firm has opted for a composition scheme, then GSTR-4 is to be filed.
The TDS Return is to be filed where the partnership firm has a valid TAN, and the type of return to be filed depends upon the purpose of deduction. The types of TDS Return are:
The partnership firm is required to get EPF registration if it employs more than ten persons, and accordingly, filing of EPF return becomes mandatory.
Books of account are required to be maintained if the partnership firm's sale/turnover/gross receipts from the business is more than Rs. 25,00,000 or the income from the business is more than Rs. 2,50,000 in any of the three preceding years.
A partnership firm is required to have a tax audit carried out if the sales, turnover, or gross receipts of business exceed the partnership firm audit limit of Rs. 1 crore in the financial year. However, it may be required to get its account audited in certain other circumstances.
Streamline your partnership firm's compliance effortlessly with LegallensIndia. We are your trusted partner in meeting all your compliance requirements, simplifying the process, and ensuring you meet deadlines while adhering to tax regulations.
Our comprehensive services cover various aspects:
With LegallensIndia by your side, you can concentrate on growing your partnership firm while we take care of your compliance needs. This ensures your business maintains a strong financial footing and legal standing. We understand the intricacies of income tax on partnership firms, including tax slabs, deductions, and filing deadlines. Our team will guide you through the process efficiently and accurately.
Are you ready to file your partnership firm's income tax return with ease? Get started now to experience the convenience and peace of mind that comes with our expert assistance.
