Filing ITR before July 31st: Here’s what SME Businessmen need to know.

July 31st, ITR, return filing

Do you run a business which has an income of more than Rs 1 crore? or are you self-employed earning higher than Rs 25 lakh? If you’re either of this, July 31st turns out to be an important date for you and here’s what you must know filing ITR:

Get a tax audit done by a qualified chartered accountant:

If income is from your profession:

Tax Audit is compulsory if you’re a professional earning more than 50 lakh rupees during the financial year.

But if your income is below 50 lakh rupees, income tax has to be paid on 50% of your total income, otherwise, an audit is required.

If Income is from your business:

In case, you’re a Businessman earning above 2 crore rupees, audit are compulsory.

But if your income as a businessman is below 2 crore rupees, income tax has to be paid on 8% of total income of businessman, otherwise, an audit is required.

The objective of the audit is to determine the taxable income. If you’ve maintained account books digitally using business accounting software like Vyapar, this shouldn’t be a problem at all.

The taxes, as applicable under the Income Tax Act, can be paid only after an audit. Thereafter, income tax returns (ITR) have to be filed on the total income for the financial year after a tax audit.

It is mandatory for all businesses and professions that are subject to a tax audit to e-file the audit reports along with the income tax returns.

Filing your ITR:

There are different forms to file ITR for businessmen depending upon specific conditions. The government has prescribed ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7 for Income Tax filing of business and profession.

Not knowing which ITR to file? Take a look at this:

ITR-3

The persons having income from following sources are eligible to file ITR 3 :

  • Proprietary business or profession
  • Additionally, the return may include income from House property, Salary/Pension and Income from other sources

ITR-4

File this ITR if you’ve opted for the presumptive income scheme as per Section 44AD, Sec 44ADA and Section 44AE of the Income Tax Act. However, if the turnover of your business exceeds Rs 2 crores, then you will have to file ITR-3.


ITR-5

ITR 5 is for firms, LLPs (Limited Liability Partnership), AOPs (Association of Persons) and BOIs (Body of Individuals)

ITR-6 (This return has to be filed electronically only)

Companies other than companies claiming exemption under section 11 (Income from property held for charitable or religious purposes).

ITR-7

You need to file this ITR if you belong to any of the below:

  • Scientific research association.
  • News agency.
  • Association or institution referred to in section 10(23A).
  • Institution referred to in section 10(23B).
  • Fund or institution or other educational institution or any hospital or other medical institution.
  • If your income is derived from property held under trust or other legal obligation for charitable or religious purposes or in part only for such purposes.

Depending on the type of your business, a particular type of ITR form should be used from the forms mentioned earlier.

Documents required to file ITR:

  1. Profit and loss account and Balance sheet
  2. Books of accounts (if applicable)
  3. Bank statements
  4. Sales register or details of all sales during the year
  5. Purchase register or details of all purchases (including capital asset) during the year
  6. TDS certificate/Form 16A (if available)
  7. VAT Return/Service Tax Return
  8. Registration certificate
  9. Expense details relating to business
  10. Details of income other than business income (capital gain, salary, rent, interest, etc.)
  11. Tax saving investments proofs

    For accuracy and instant access, it is always recommended to maintain business data using business accounting software. If you don’t have one, start using Vyapar, the best GST-compatible accounting software for Indian Businesses – DOWNLOAD the Free Trial NOW.

Due dates for filing business income tax return:

If you’re a working partner in firm or LLP,

  • 31st July is the deadline for the non-audit case
  • 30th September is the deadline for audit case

For a partnership firm and LLP,

  • 31st July is the deadline for non-audit case and 
  • 30th September in case of the audit

Lastly, for trust it is,

  • 31st July is the deadline to file ITR for non-audit case and
  • 30th September in case of the audit

To sum up, audit cases can file returns up to 30th September, others shall file before 31st July. Lastly, if you have your deadline coming up, better act fast before you’re too late.

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