Annual compliances of a proprietorship
A proprietorship has no annual filing with the Ministry of Corporate Affairs. Company Suggestion prepares the owner’s income-tax return and the tax audit when section 44AB applies.
Which annual filings does a proprietorship make?
The owner’s year has three tax duties.
- Books of the business, kept in the owner’s name.
- An income-tax return: ITR-3, or ITR-4 when the presumptive scheme applies.
- Advance tax when the tax payable for the year is ₹10,000 or more.
GST returns apply only if the owner has a GST registration. A proprietorship that wants a company calendar incorporates a company first.
When does the owner need a tax audit?
Section 44AB uses the same business tests as for a firm.
- Business turnover above ₹1 crore.
- Business turnover above ₹10 crore when cash receipts and cash payments are each within 5%.
- Professional receipts above ₹50 lakh.
Which papers does the return need?
The return uses four papers.
- The owner’s PAN and Aadhaar
- The books, bank statements and a list of assets used in the business
- TDS certificates and GST figures, where those taxes apply
- The previous year’s return, for brought-forward items
What is the yearly order of work?
Company Suggestion closes the year in four steps.
- The books are closed in the owner’s name.
- The tax audit is done when section 44AB applies.
- ITR-3 or ITR-4 is filed.
- Advance tax for the next year is scheduled when section 208 applies.
Frequently asked questions
4 questions cover the rules that decide this registration.
Does a proprietorship file with the Registrar of Companies?
No. A proprietorship is not a company. There is no AOC-4, MGT-7, Form 11 or Form 8.
Which return does the owner file?
ITR-3 for a business or profession with regular books. ITR-4 when the owner opts for the presumptive scheme and is eligible for it.
When is advance tax due?
When the tax payable for the year is ₹10,000 or more, section 208 requires advance tax. The instalment dates are in the Income-tax Act.
Does GST replace the income-tax return?
No. GST returns, when the owner is registered, are separate from the income-tax return.