Most of the small businesses owners ask the most common question that is- Does one have to pay business tax? Well yes, it is compulsory to pay income tax for everyone, irrespective of the size of the entity as a company. If a company earns revenue more than the threshold limit, then on the basis of that, the business tax rate is to be paid by the company in question.

Who needs to file the business tax return?

The filing of returns depends mainly on the kind of business structure. For instance, if you are the only proprietor then all your business income and other personal income- for example, income from house property, salary and interest income all need to be declared in the same return.

If the total income before the deductions crosses the basic taxable limit, then you will required to file your income tax return mandatory irrespective of whether there is a profit or loss in your business. The base limit taxable is Rs. 2.5 lakh. Therefore, if your income before the deductions is more than Rs 2.5 lakh, you will have to file business tax returns.

For firms, companies and Limited Liability Partnerships (LLPs), the business tax return needs to be filed during both cases of profit and loss. Even when there have been no operations undertaken, there has to be a filing of returns accordingly. The firms, companies, and LLPs are taxable at the rate of 30%.

Income Tax Audit

The taxpayer whose turnover is more than Rs. 1 Crore from business or more than Rs. 50 Lakh as a professional, needs to get a tax audit done. He/she will have to hire a Chartered Accountant for auditing the book of accounts.

Also, a tax audit will be needed if there is a loss in your business and you are willing to take forward the loss. The tax audit is required also when profits declared are less than 8% (Digital transactions=6%) of the total turnover for businesses and 50% of receipts for professionals.

Presumptive Taxation

Firms, Individuals and HUFs running businesses or offering services on a presumptive basis may offer presumptive taxes. Turnover up to Rs. 2 Crore for businesses and for professionals up to Rs. 50 lakh will have presumptive taxation permitted.

8% minimum of the turnover will be offered as an income for businesses under presumptive basis.  50% of professional receipts for professionals need to be declared for filing returns in this case.

What is the last date for filing returns?

For those not liable for tax audit, the due date for filing of returns is August 31st after the end of financial year (the belated returns may be filed till 31st March that is subjected to penalty).

For those who are liable to get a tax audit done and the other assesses such as a company, partnership firm or LLP, the last date is September 30th after the financial year ends.

The loss incurred for the year will not be taken forward if the filing of returns is done after the last date of income tax return filing. Also, a Rs. 5000 fine will be charged under the section 271F. If you require any kind of guidance regarding tax filing, registration of businesses etc, then GCC Filings is a one stop solution. Solve all your bookkeeping hassles with GCC Filings.

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