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.
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:
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.
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.
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.
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.
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% |
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% |
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.
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.
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.
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.
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.
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.
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.
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.
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% |
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