Income Tax Return Filing Partnership Firm
Partnership firm is where two or more people agrees to start a business with aim of earning profit. In India there are two types of partnership firm that is registered & unregistered partnership firm. Key difference is under registered partnership documents are submitted to ROF. In partnership firm partners work as per roles & responsibilities and earn profit. As per firm agreement partners share profit ratio along with remuneration & interest on capital invested. Income tax on partnership firm is calculated separately. Tax is calculated separately for partners & for firm. Also return need to be filed separately.
The partnership firm need to maintain books of accounts of firm. All expenditure relating to the partnership firm need to be booked as per Income Tax provision. Booking of Personal nature expenses in firm is not allowed. Firm need to file income tax return annually irrespective of turnover of firm. For non filing of tax return penalty is applicable. For make correct disclosure of firms expenses , partners remuneration , interest on capital etc. tax filing is important. A N Bhutada & CO CA Firm helps in Partnership firm Income tax return filing , calculation & audit , assessment.
- ITR Filing Due date 31 July 2020
- ITR Form 5 Applicable
- Non Filing Penalty upto Rs.10000
- Online Filing Applicable
- Income Tax Rate 30%
- Audit Applicable if turnover > Rs. 100 / Rs. 50 Lac
Income Tax Rate on Partnership Firm
Income Tax rate on partnership firm is 30%. As like individual cases there no income tax slab rate for firm. Income tax in calculated on net profit of firm. After preparing computation of income of firm tax can be calculated. Apart from income tax , surcharge at rate of 12% of tax is applicable if total income exceeds one crore. In addition to this income tax & surcharge firm need to pay 2%. Secondary and higher education cess is applicable on the amount of income tax and the applicable surcharge at the rate of 1%.
| S.No | Income Tax | Tax Rate | Financial Year |
|---|---|---|---|
| 1. | Income Tax | 30% | FY 2019-20 |
| 2. | Surcharge if total income exceeds Rs. 1 crore | 12% | FY 2019-20 |
| 3. | Health and Education cess | 4% | FY 2019-20 |
Procedure for Partnership Firm Tax Return Filing
Procedure for filing Partnership firm tax return is online. ITR 5 is applicable this form can be downloaded form official income tax website. For online income tax return filing Class 2 digital signature of firm is required. In case where audit is applicable for firm then online tax return filing is mandatory.
- Create User ID at income tax Site
- Download latest income tax return
- Fill firm detail of PAN , Name , Address , Year etc.
- Fill details of Income & expenditure of firm
- Fill details of Interest & remuneration paid to partners
- Pay Income Tax as applicable & fill challan
- Upload income tax return on site & Validate ITR
Income Tax Calculation for Partnership Firm
Income Tax calculation for partnership firm depends on Net profit of firm , remuneration paid to partners, Interest paid to partners , conditions of partnership firm. Firm need to book expenses as per terms of income Tax Act. Under income tax following nature of transactions not allowed.
- Salary , Bonus , remuneration paid to non-working partners
- Remuneration or interest paid to partners not as per firm deed
- Prior period remuneration paid to partners
- Partners personal expenses booked in firm
Partnership Firm Tax Return Due Date
As like in case individuals income tax return filing due date for partnership firm for FY 2019-20 ( AY 2020-21) is 31 July 2020. Usually income return form for tax filing are available from April month. In case where partnership firm required to get books of accounts audited then due date is 30 September. Income tax filing due date for FY 2019-20 is applicable is firm is registered on or before 31 March.
Penalty For Non Filing of Income Tax Return
Section 234 F of Income Tax is applicable for penalty for non filing of Income tax return of partnership firm. For income tax filing after due date penalty upto Rs. 10000 is applicable. To avoid late filing fees one should file income tax return on or before 31 July 2020.
Content of ITR - 5
Part A
General information of firm Pan,address,contract , partners details , Adhar no.etc.Details of firms Profit & loss,Balance sheet statement and other information.
Part B
Part B content information of detail of your total income in 36 schedule such as income from house property, income from business, details of capital gain, depreciation etc.
How to fill ITR-5
ITR -5 can be downloaded online and file online at income tax website. Fill details of firm , nature of business , details of profit & loss statement , balance sheet etc. & submit.
Documents required for Income Tax Filing of Partnership firm
1. PAN of Firm2. Address Proof , Contact details of firm
3. Books of accounts of firm ( Like Sales , Purchases statement)
4. Balance sheet & Profit loss statement
5. Income Tax computation sheet
6. Tax Paid challans & 26 AS Details
7. Interest , Remuneration , profit paid to partners
8. Digital Signature
