Business Tax Returns

Business tax returns can also be called income or corporate tax returns. The return consists of a statement of income and expenditure earned and incurred by a business. The business tax return includes the assets and liabilities of a company. It further consists of the tax payable on the profit of a business.

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Business Tax Return Filing

Every business operating in India is expected to file an income or business tax return every financial year. In addition, the company is also required to file TDS return along with the business tax return and is expected to pay taxes in advance. 

The following bodies or individuals are expected to file business tax returns:

  1. Proprietorship

    A sole proprietor earning business income along with his personal salary, a payment from house property and an interest income is required to state all his income in the same income tax return. 

  2. Partnership Firm

    A partnership firm, whether registered or unregistered, needs to file an income tax return every year in Form ITR 5. The rate of 30% is determined as the income tax for a partnership firm. 

  3. LLP (Limited Liability Partnership)

    Every registered Limited Liability Partnership (LLP) is required to file the business tax return with Form ITR 5 along with the MCA (Ministry of Corporate Affairs) annual return.

  4. Company

    Every company registered in India under the Companies Act is expected to file its business tax return in Form INR 6 along with MCA annual return.

Tax Rates

The following tax rates are given for an individual (residential and non-residential), HUF (Hindu Undivided Family), AOP (Association of Persons), BOI (Body of Individual) and other artificial juridical persons:

Individuals
Below 60 years of age or other than senior or super senior citizen
Income Tax Range Income Tax Rate
AY 2023-24 AY 2022-23
Up to INR 2,50,000 - -
INR 2,50,000 to INR 5,00,000 5% 5%
INR 5,00,000 to INR 10,00,000 20% 20%
More than INR 10,00,000 30% 30%

Senior Citizen
60 years but below 80 years in the previous year
Income Tax Range Income Tax Rate
AY 2023-24 AY 2022-23
Up to INR 3,00,000 - -
INR 3,00,000 to INR 5,00,000 5% 5%
INR 5,00,000 to INR 10,00,000 20% 20%
More than INR 10,00,000 30% 30%

Super Senior Citizen
A person who is 80 years more
Income Tax Range Income Tax Rate
AY 2023-24 AY 2022-23
Up to INR 5,00,000 - -
INR 5,00,000 to INR 10,00,000 20% 20%
More than INR 10,00,000 30% 30%

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Hindu Undivided Family (Including AOP, BOI and Artificial Juridical Person)
Income Tax Range Income Tax Rate
AY 2023-24 AY 2022-23
Up to INR 2,50,000 - -
INR 2,50,000 to INR 5,00,000 5% 5%
INR 5,00,000 to INR 10,00,000 20% 20%
More than INR 10,00,000 30% 30%

Surcharge: A surcharge is applicable or levied on the amount of income if the said income exceeds a specified limit.

Surcharge Rate
AY 2023-24 AY 2022-23
Income Range Income Range
INR 50 lakh to INR 1 crore INR 1 crore to INR 2 crore INR 2 crore to INR 5 crore INR 5 crore of INR 10 crore Amount exceeding INR 10 crore INR 50 lakh to INR 1 crore INR 1 crore to INR 2 crore INR 2 crore to INR 5 crore INR 5 crore of INR 10 crore Amount exceeding INR 10 crore
10% 15% 25% 37% 37% 10% 15% 25% 37% 37%

Partnership Firm

A partnership firm in the assessment year 2023-24 is taxable at 30%. The rate of income tax is subject to increase by 12% if the total income exceeds the limit of INR 1 crore. 

Domestic Company

Income tax rates for a domestic company for the Assessment Year (AY) 2023-24 and 2022-23 are given below:

Domestic Company
AY 2023-24 AY 2022-23
Where the turnover or gross receipt of the company during 2019-20 exceeds INR 400 crores NA 25%
Where the turnover or gross receipt of the company during 2020-21 does not exceed INR 400 crores 25% NA
Any other domestic company 30% 30%

Surcharge: The rate of 7% shall be levied if the total income exceeds INR 1 core but does not exceed INR 10 crores. The rate of 12% shall be applicable where the total amount of income exceeds INR 10 crores.

Special Tax Rate for a Domestic Company

Domestic Company
AY 2023-24 AY 2022-23
Where the company opted for section 115BA of Income Tax Act of 1961 25% 25%
Where the company opted for section 115BAA 22% 22%
Where the company opted for section 115BAB 15% 15%

Surcharge: If the company opted for section 115BAA or 115BAB of the Income Tax Act of 1961, the rate shall be 10% despite the total income of the company.

Income Tax Audit

Every taxpayer is required to get a tax audit done if the turnover of the business exceeds the amount of INR 1 crore. The tax audit is also needed to be accomplished if the turnover exceeds the amount of INR 50 lakh in case of professionals. The Chartered Accountant (CA) can be appointed for the tax audit of the account. 

Additionally, the tax audit is required if a business wishes to carry forward the loss of the previous year in the assessment year. The tax audit for business tax returns is also necessary if the profit is less than 8% of the total turnover of a business.

Presumptive Taxation

The presumptive taxation is covered under section 44AD of the Income Tax Act of 1961. A business with a turnover of up to INR 2 crores may opt to be taxed presumptively. The business is required to offer at least 8% of the total turnover as income under section 44AD for presumptive taxation. 

For professionals, 50% of the turnover is required to be held as a business tax return.

ITR Filing date for Business

Individuals not liable for tax audits are required to file their income tax returns on or before 31st August, post the end of the financial year. Late filing of ITR attracts a penalty. 

The ITR filing date for business for the individual or other assesses such as a partnership firm, company, or LLP liable to tax audit are required to file their ITR on or before 31st September. 

Penalty

It is crucial to remember the ITR filing date for business. An assessee who fails to file ITR may face penalties. A loss in the previous year cannot be carried forward in the next assessment year if the returns are filed post the due date as mentioned above. A fine of INR 5,000 is also subject to be levied on the assessee under section 271F of the Income Tax Act of 1961.

In Conclusion

Corporate houses or companies must file their business tax return before the due date. The TDS return must be filed along with the business tax return. The sole proprietorship, a private company, joint venture, public company, and limited liability partnership is liable to file business tax returns after every financial year.

FAQ's

  • What is proprietorship tax return filing?

    Every individual who has their business as the source of their income is considered to be operating a proprietorship firm. Every proprietor in India is required to file an income tax return. The procedure for filing an income tax return for a proprietorship is identical and similar to an individual tax return filing since a proprietorship is regarded as one.
  • What are the income tax slab rates for an individual and HUF under the old tax regime?

    Tax Slab Rate (%)
    Up to INR 2.5 lakh Nil
    INR 2.5 lakh to INR 5 lakh 5%
    INR 5 lakh to INR 10 lakh 20%
    Above INR 10 lakh 30%
  • When should one pay an advance tax?

    If the tax liability of a person exceeds INR 10,000 during a financial year, then the businessman is required to pay the advance tax in the following installments:
    • 15 June
    • 15 September
    • 15 December
    • 15 March
  • Can I file the ITR for the previous year?

    Yes, an assessee may file an ITR of the previous year in the current year.

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*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
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