Every business needs to file income tax returns in order to report its income and expenditure to the income tax department. All businesses, operating in India, have to file income tax returns every year. It’s interesting to know that the tax return for companies is much more complicated than the procedure for individual taxpayers.
What is a Business Tax Returns?
A business tax returns is a statement of income earned and expenditure of the business. Suppose, if a company earns some profits, then it is liable to pay certain tax to the government over those profits. The tax return filed by company should also have details on assets and liabilities a business has.
Requirements for filing Business Tax Returns
The various types of businesses are:
- Proprietorship: A sole proprietorship also referred to as a sole trader or a proprietorship, is an unincorporated business that has just one owner who pays personal income tax on profits earned from the business. A sole proprietorship is the easiest type of business to establish or take apart.
- Partnership firm: It is an organisation formed with two or more persons with an aim to earn profit. Collectively the organisation is known as a partnership firm. These firms are governed by the Indian Partnership Act, 1932.
- Limited liability partnership: It is a kind of partnership firm where all partners have limited liabilities. In such type of model, no partnership is responsible or liable for other’s negligence or misconduct.
- Corporate: A corporation is considered by law to be a unique entity, separate from those who own it. A corporation can be taxed, sued and enter into contractual agreements. The corporation has a life of its own and does not dissolve when ownership changes.
Book of Accounts
The financial records, ledgers and journals make up the accounts of a company and are known as books of accounts. They effectively represent the financial memory of the company and is crucial for decision making and ensuring regulatory compliance. The books of accounts represent:
- All sums of money received by the company
- All sales and purchases of goods and services of the company
- The assets and liabilities of the company
- The items of costs as well
Income Tax Rates for Firms
While looking at how to file business tax returns, we need to take a look at income tax rates for the firms. The tax rate for partnership firms and limited liability partnerships is 30%. However, the amount of income-tax (as computed above) shall be further increased by a surcharge at the rate of 10% of such tax, in case of LLP and a surcharge of 12% of income tax where total income exceeds Rs. 1 crore. The tax rate for any domestic company is also 30%. A surcharge is though applicable based in certain conditions.
Read More: Online Income Tax Payment How To Do It?
Income Tax Audit
Income tax audit has been made mandatory, and all taxpayers have to get their accounts of their business or organization audited as per as the provisions of section 44AB of the income tax act. The sole purpose of the income tax audit is that an individual as well as an organization’s taxes are examined by an auditor to check that all the information regarding income, expenditure and deduction has been filed correctly.
The various objectives of an income tax audit are:
- It ensures that all businesses maintain proper books of accounts
- It ensures that total income and claims for deductions are correctly entered when filing the returns, without any discrepancy
Why Hire Alankit Limited for Your Tax Needs?
The easiest way of following all these stated steps above is to hire the services of Alankit Limited. They are the best solution provider in e-governance services, financial services, insurance services and healthcare services in India. They, along with their expert tax consultants, help you to avoid minute hassles and penalties and guide you to file your income tax returns. Their team is experienced and skilled to help taxpayers save time and be efficient with tax filing procedures.
As a company, Alankit helps businesses optimize taxes by rendering professional services for income tax returns through an easy, convenient and secure manner. The company is a registered e-return intermediary offering reliable and professional ITR filing services. It offers professional services for income tax returns e-filing across India. Visit their website for more information.
Read Also: How to file income tax return online for salaried employee?
Comments
Post a Comment