Business Tax Filing

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Business Tax Filing​ Easily and Fast with VenueTax | Kolhapur

Business Tax Filing​

Every business, whether small or large, has to pay income tax and file income tax returns. Tax compliance for businesses is very complex for individuals unlike salaried taxpayers and pensioners. Generally, large businesses have the necessary resources to manage their tax-related matters, but small businesses do not have resources nor have time to deal with their taxes. Therefore, we have a presumptive income plan or projected taxation plan, a simple taxation system that imposes a low compliance burden on small business taxpayers. In VenueTax, we will tell you how you can enter your taxes as a small business unit. 

Business Tax Filing and You

Business tax is Basically Income Tax Return is the form in when assessee files information about his Income and tax thereon to Income Tax Department. Various forms are ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 and ITR 7. When you file a belated return, you are not allowed to carry forward certain losses.[1]

The Income Tax Act, 1961, and the Income Tax Rules, 1962, obligates citizens to file returns with the Income Tax Department at the end of every financial year.[2] These returns should be filed before the specified due date. Every Income Tax Return Form is applicable to a certain section of the Assessees. Only those Forms which are filed by the eligible Assessees are processed by the Income Tax Department of India. It is therefore imperative to know which particular form is appropriate in each case. Income Tax Return Forms vary depending on the criteria of the source of income of the Assessee and the category of the Assessee.

Individuals who fulfil any one of the following conditions should by law file their Income Tax Returns during a financial year:[3]

  • Possesses a valid Credit
  • Pays for foreign travel, either for himself or another individual
  • Is the member of a Club where entrance fees charged is twenty five thousand or more
  • Occupies a particular floor area of an immovable piece of property
  • Is the owner of a vehicle

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Due dates of filing income tax return for FY 2017–18(AY 2018–19) are as under :

1. 31 August 2018 for Individuals not requiring audit under any law.

2. 30 September 2018 for Companies or a working partner of a firm or Individuals requiring audit under any law.

3. 30 November 2018 for any person (corporate/non-corporate) who is required to furnish a report in Form No. 3CEB u/s 92E.

The tax department recently has extended the last date to file ITR(Income tax return).

The due date for filing ITR for financial year 2017–2018 or assessment year 2018–2019 has been extended to 31 August from 31 July

Note – From F.Y 17–18 , Late fee u/s 234F shall be levied if return is filed after the due date by any assessee.

As per the new law from this year, Individuals will have to pay late fee after last date to file income tax return

  1. Rs 5000 if tax is filed after due date of 31 July but on before 31 December of that assessment year (in this case 31 December 2018)
  2. Rs 10,000 if tax is filed after 31 December but on or before 31 March of the relevant assessment year (in this case from 1 January to 31 March 2019)

But, there is relief to small taxpayer, IT Department has stated if your total income does not exceeds 500,000 , then maximum penalty of Rs 1000 will be levied on delay of ITR filing.

Interim Finance Minister Piyush Goyal announced a number of changes in the income tax rules for the next fiscal year 2019-20. Listed here are some of the significant changes announced as part of the Union Budget 2019. 

  • The rebate under the Section 87A of the Income Tax Act, 1961 has been modified. A rebate can be defined as the amount the taxpayer is not required to pay. The rebate has now been raised to Rs.12,500. This will be applicable only for the people having net taxable income of under Rs.5 lakh. Starting from the next fiscal year, if someone has a net taxable income of less than Rs.5 lakh, the entire tax to be paid can be paid as tax rebate. The net tax will drop down to zero if you claim the tax rebate. 
  • A proposal was made by the finance minister to provide exemption from notional rent when it comes to two self-occupied properties. As per the rules in place currently, anyone having two self-occupied houses will have to pay tax for the rent of one of the two houses. 
  • The standard deduction has now increased from Rs.40,000 to Rs.50,000. The purpose of this deduction is to reduce the amount of taxable income. The reduced value of taxable income will mean that the tax liability you have also comes down greatly. 
  • The limit on TDS on the interest you receive from post office and bank deposits has now increased to Rs.40,000. The existing limit was Rs.10,000. Any income you may get as interest from banks and post office deposits will not be applicable for TDS if the amount is less than Rs.40,000. 
  • According to the existing rules, there is an option to use any capital gains you earned for purchase or construction of another house. By doing this, there is an option to save on the capital gains tax you will have to pay as per Section 54. As per the Budget 2019, this benefit of capital gains tax can be used to purchase two houses. This is only if the capital gains fall under Rs.2 crore.  

VenueTax Kolhapur can help you to prepare and file business tax returns in Kolhapur.

Business Tax Filing Services

VenueTax will assist you to file Income Tax Return. as a Small business houses with a turnover up to prescribe limit can opt for the presumptive scheme and avail several benefits. However, to make use of any tax benefit, they need to pay their taxes and file their tax return timely and accurately. Small businesses under the presumptive income scheme need to file a simplified return called ITR-4 (Sugam). They also do not require to pay Advance Tax 4 times in a year, instead, they can pay the whole amount in one go by 31st March of the relevant financial year.No books of account and P&L Statement are compulsorily required to be maintained for by the businesses for tax purposes under this scheme. Also, they are relieved from the requirement of getting the books audited.

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Small business houses with a turnover up to Rs 2 crores can opt for the presumptive scheme and avail several benefits. However, to make use of any tax benefit, they need to pay their taxes and file their tax return timely and accurately. Small businesses under the presumptive income scheme need to file a simplified return called ITR-4 (Sugam). They also do not require to pay Advance Tax 4 times in a year, instead, they can pay the whole amount in one go by 31st March of the relevant financial year. No books of account and P&L Statement are compulsorily required to be maintained for by the businesses for tax purposes under this scheme. Also, they are relieved from the requirement of getting the books audited.

A business tax return is basically an income tax return. The return is a statement of income and expenditure of the business. Also,  any tax to be paid on the profits made by you is declared in this return. The return also contains details of the assets and liabilities held by the business. Items like fixed assets, debtors and creditors of business, loans taken and loans were given are declared here.

  • If you are a sole proprietor your business income and your other personal income like salary, income from house property and interest income have to be stated on the same return.
  • If your total income before deductions is above the basic taxable limit you need to compulsorily file your income tax return irrespective of profit or loss in your business.
  • The basic taxable limit is Rs. 2.5 lakh. So, if your income before deductions is above Rs 2.5 lakh you need to file your business tax return.
  • For companies, firms and Limited Liability Partnership (LLP) a business tax return has to be filed irrespective of profit or loss. Even if there are no operations undertaken, a return has to be filed.
  • Companies, firms, and LLPs are taxed at a rate of 30%.

Every taxpayer whose turnover is above Rs. 1 Crore in case of businesses and Rs. 50 Lakh in case of professionals is required to get a tax audit done. The taxpayer has to appoint a Chartered Accountant to audit their accounts.

Also, a tax audit is required if there has been a loss of your business and you want to carry forward the loss. A tax audit is necessary even when the profits declared by you is less than 8% (6% on Digital transactions) of the turnover in case of business and 50%  of receipts in case of professionals.

Individuals, HUF, and Firms running businesses or providing services can offer their income to tax on a presumptive basis. Turnover up to which presumptive taxation is allowed for businesses is Rs. 2 Crore and for professionals is Rs. 50 Lakh. Minimum of 8% of the turnover has to be offered as income under presumptive basis for businesses. For professionals, 50% of professional receipts have to be declared on the business tax return.

For the Individuals not liable to tax audit, the last date for the filing of the return is 31st July after the end of the financial year (Belated return can be filed up-to 31st March subject to penalty) For individuals liable to tax audit and all other assesses like company, LLP or partnership firm, the due date is 30th September after the end of the financial year. For the FY 2017-18, this due date has been extended from 30 September 2018 to 31 October 2018. The penalty for non-filing of returns- Any loss incurred during the year cannot be carried forward if the return is filed after the due date of filing income tax return. Also a fine of Rs. 5000 under the section 271F can be levied on the assessee.

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