How to File Income Tax Returns: Guide for EntrepreneursApril 3, 2023
Taxes are complex and intimidating for most businesses in India. When it comes to a foreign business just stepping into the Indian market, they are likely to seen even more daunting. Even though it’s better to let a professional consulting agency handle such important yet complex tasks, it’s a good idea to learn how the Income Tax Returns filing process works, at least at a basic level.
The process for filing ITR is the same for businesses and proprietorships. Both organisations must file the ITR-4 form with all the relevant documents, like PAN card, Aadhaar, and advance tax payment challan. The only difference is that sole proprietorships are not considered separate entities and are taxed in the proprietor’s name. The easiest way to file ITR is through their online portal. Here’s how you can go about it
How to File Income Tax Returns Online
- Visit the official portal of the Income Tax Department
- Fill in your PAN card details and password, and enter the Captcha code
- Select ‘e-file’ option and choose the ‘Income Tax Return’ link.
- On the page that opens, PAN card details must already be added in, so just fill in the Assessment year, ITR form Number, and Filing type (Original/Revised Return).
- Select ‘Prepare and Submit online’ as the submission mode.
- Fill in the ITR fields with suitable information and choose the ‘Preview and Submit button’ as the verification method
- Submit the application for ITR. You can now view the uploaded file as well.
For sole proprietorships operating as a Hindu Undivided Family or operated as a single person, the ITR-3 form must also be submitted additionally. The proprietors use ITR-4 as a part of the presumptive tax arrangement to reduce the burden of compliance on small-scale businesses.
There are two dates you need to mark in your calendars. If your business doesn’t require a third-party audit, then 31st July is the last date for submission. If your accounting needs external auditing, then you have to complete the ITR filing process by 31st October.
It’s imperative that the company files ITR every year (unless you qualify for an exemption like ‘annual income less than 2.5 lakhs’). If you fail to do so, you may receive a penalty or prosecution leading up to 3 years imprisonment.
It might be a good plan to hand over the compliance to a consultancy specialising in business operations and accounting to avoid any trouble. Corporate Leaps handles all administrative and accounting needs from incorporation to day-to-day bookkeeping, along with filing taxes on your behalf. Write to us at firstname.lastname@example.org for more information.