Business Income Tax Return (ITR) Filing Online 📝

Starting and running a business is no cakewalk, and tackling tax returns is a part of that ride. Filing a Business Income Tax Return (ITR) isn’t just a compliance obligation—it’s a reflection of your business’s financial health. Whether you’re small, big, or still in the “just an idea” phase, filing taxes is non-negotiable.

What’s a Business Tax Return?

A business tax return is like your business’s annual report card 📊—it shows income, expenses, TDS, and financial details like loans, creditors, and more. Filing this return is an annual ritual, and if done right, it can open doors to tax refunds, benefits, and even fewer visits from tax officers!

Why Should You File Your Business ITR?

Let’s decode the advantages:

1. Refund: File timely, and you might just get some money back—hello, better cash flow!
2. Carry Forward Losses : Offset losses from one year with future profits to reduce taxes.
3. Loan Friendly : Filed ITRs = proof of financial stability = better loan chances.
4. Proof of Transactions : Solid financial records make legal or business dealings smoother.
5. Audit-Ready : A well-filed return is a lifesaver during audits.
6. Compliance Peace : Filing on time avoids penalties, ensuring you’re on the right side of the law.
7. Credibility & Trust : Transparent records inspire confidence among investors, clients, and stakeholders.

Who Needs to File a Business ITR?

If you’re running any of the following, you must file your business tax return:

• Sole Proprietorship
• Partnership Firm
• Limited Liability Partnership (LLP)
• Private Limited Company, One-Person Company, or any other registered company

Income Tax Slabs and Rates: Proprietorships 💸

Just like individual taxes, proprietorships follow slab rates. Here’s the breakdown:

👉 Proprietor’s Age < 60 (AY 2024-25):

👉 Proprietor’s Age 60–80:

👉 Proprietor’s Age 80+ (Super Senior):

Revised Income Tax Slabs for AY 2026-27 (New Tax Regime)

The Union Budget 2025 has introduced updates to the income tax slabs under the New Tax Regime for Assessment Year (AY) 2026-27.

Additionally, individuals with income up to ₹12,00,000 will not pay any tax due to an enhanced rebate under the new regime.

Surcharge Details 🤯

For those whose income surpasses certain levels, here’s the extra pinch:

Tax Rates for Partnerships and LLPs

Income Tax Rate:

• Flat 30% on total income.
• Surcharge:
  • 12% if total income exceeds ₹1 crore.
• Health & Education Cess: 4% on the total tax and surcharge.

Alternate Minimum Tax (AMT):

Partnership firms and LLPs are subject to AMT at 18.5% of adjusted total income, plus applicable surcharge and cess.

Tax Rates for Companies

Income Tax Rate for Domestic Companies (AY 2024-25):

1. Turnover below ₹400 crore (FY 2020-21): 25%
2. Turnover above ₹400 crore (FY 2020-21): 30%

Surcharge:

• 7% for total income between ₹1 crore and ₹10 crores.
• 12% for total income exceeding ₹10 crores.

Minimum Alternate Tax (MAT):

Domestic companies must pay MAT at 15% of book profits, plus applicable surcharge and cess, if their tax liability under normal provisions is lower.

Tax Audits 🕵️‍♂️

Here’s when your business needs an audit:

• Proprietorship: Annual turnover > ₹1 crore or professional receipts > ₹50 lakh.
• Partnership Firm & LLP:
• Business turnover exceeds ₹1 crore.
• Professional gross receipts exceed ₹50 lakh.
• Contribution exceeds ₹25 lakh (for LLPs)
• Companies: Audit mandatory, irrespective of turnover or profit/loss.

Filing Deadlines 🚨

ITR Forms for Business Entities 📄

Why Choose Compliance Monk? 🤝

Tax filing doesn’t have to be stressful. Here’s why Compliance Monk is your best bet:

• Expert Guidance: Our pros know the tax landscape inside-out.
• Deadline Reminders: No more last-minute panic!
• Tailored Support: From small businesses to big corporates, we cater to all.

Ready to File Stress-Free? 🎉

👉 Contact Us Today for a seamless tax-filing experience.

Frequently Asked Questions (FAQs)

1. What is a Business Income Tax Return?

A Business Income Tax Return is an annual report filed with the Income Tax Department, detailing a business’s income, expenses, deductions, Tax Deducted at Source (TDS), and other financial data. It ensures compliance with tax regulations and acts as a financial record for the business.

2. Who is required to file a Business Income Tax Return?

The following entities are required to file a Business Income Tax Return:

• Sole Proprietorships
• Partnership Firms
• Limited Liability Partnerships (LLPs)
• Private Limited Companies
• One-Person Companies (OPCs)
• Any other registered business entity in India

3. What is the due date for filing a Business ITR?

The due dates vary depending on the type of entity and audit requirements:

• Sole Proprietorships and Partnership Firms (without audit): July 31
• Sole Proprietorships and Partnership Firms (with audit): September 30
• LLPs and Companies: September 30
  These dates may vary if extended by the government for specific assessment years.

4. What are the benefits of filing a Business ITR?

Filing a Business ITR offers several advantages:

• Ensures compliance with tax regulations
• Enables claim of tax refunds
• Allows carry-forward of losses for future offset
• Serves as proof of income and financial stability for loans and other transactions
• Builds credibility and trust with stakeholders

5. What tax rates are applicable for Proprietorships?

Proprietorships follow individual tax slab rates. For the Assessment Year 2025-26:

• Income up to ₹2,50,000 (for individuals below 60 years) is exempt.
• Income up to ₹3,00,000 (for individuals aged 60–80) is exempt.
• Income up to ₹5,00,000 (for individuals aged above 80) is exempt.
  For incomes above these thresholds, tax rates of 5%, 20%, and 30% are applied depending on the income bracket.

6. What tax rates are applicable for Partnership Firms and LLPs?

Partnership Firms and LLPs are taxed at a flat rate of 30% on total income. Additionally, a surcharge of 12% is applicable if the total income exceeds ₹1 crore. A Health and Education Cess of 4% is levied on the total tax and surcharge.

7. What tax rates are applicable for Companies?

For the Assessment Year 2025-26:

• Domestic companies with a turnover of up to ₹400 crore are taxed at 25%.
• Companies with a turnover exceeding ₹400 crore are taxed at 30%.
  A surcharge and Health & Education Cess are applicable on the total tax amount.

8. What is Minimum Alternate Tax (MAT)?

MAT ensures that businesses with substantial book profits pay a minimum amount of tax, even if their taxable income under regular provisions is lower.

• Partnership Firms and LLPs: AMT is 18.5% of adjusted total income.
• Companies: MAT is 15% of book profits.
  A surcharge and cess are applied to the MAT amount as per applicable rules.

9. What is the penalty for not filing a Business ITR on time?

Failing to file a Business ITR within the due date attracts penalties under Section 234F of the Income Tax Act. The penalty is:

• ₹5,000 if filed after the due date but before December 31 of the assessment year
• ₹10,000 if filed after December 31
  For businesses with a total income below ₹5 lakh, the penalty is restricted to ₹1,000.

10. What is a tax audit, and when is it required?

A tax audit involves a review of the financial records of a business to ensure accuracy and compliance with tax laws. It is mandatory when:

• A business’s turnover exceeds ₹1 crore
• Professional receipts exceed ₹50 lakh
• LLP contributions exceed ₹25 lakh or turnover exceeds ₹40 lakh
• Specific conditions under the Income Tax Act are met

11. Which ITR forms are applicable for business entities?

The applicable ITR forms are:

• Proprietorships: ITR-3 or ITR-4 (Sugam)
• Partnership Firms and LLPs: ITR-5
• Companies: ITR-6

12. What is the surcharge on Business Income Tax?

Surcharge rates depend on the level of income:

• ₹50 lakh to ₹1 crore: 10%
• ₹1 crore to ₹2 crores: 15%
• ₹2 crores to ₹5 crores: 25%
• Above ₹5 crores: 37% (Reduced to 25% under the alternate tax regime for individuals and HUFs as per Section 115BAC)

13. What happens if a business has no income or is dormant?

Even if a business has no income or is dormant, it must file a NIL return to stay compliant with tax laws. Non-filing can attract penalties.

14. Can losses be carried forward if ITR is not filed on time?

No, losses cannot be carried forward if the ITR is not filed within the due date, except for house property losses.

15. What are the consequences of incorrect filing?

Incorrect filing can lead to:

• Rejection of the return by the Income Tax Department
• Penalties and interest for underreporting income or tax evasion
• Increased scrutiny or audits by tax authorities