Income Tax Return Filing for Sole Proprietorship

One of the most important parts of managing your finances as a Sole Proprietorship is filing your income tax return (ITR). To guarantee compliance with tax rules and optimize your tax benefits, it is imperative that you comprehend which ITR form is suited for your particular employment position. Connect with Bizfoc for Income Tax Return Filing for Sole Proprietorship.

What Is Sole Proprietorship?

A Sole Proprietorship is a common Business Type in India as it only includes a single owner responsible for all the decisions. In other words Sole Proprietorship business is managed by a single person. This type of business can be started from any small place and does not require a huge place to start.

Sole Proprietorship Business is best for those who want to start their business with less investment. Also, it does not require any registration fee as such. The owner of the business bears all the losses and enjoys all profits solemnly. Local grocery shops, retail stores, boutiques, parlor, etc, are the example of Sole Proprietorship.

What Is ITR for Sole Proprietorship?

Filing of ITR for Sole Proprietorship is necessary as it involves reporting of income, expenses and profit of a business to the tax authorities. In Sole Proprietorship Business, you and your business are considered as a single entity which means your personal and business income are not separate.

It is crucial to verify and submit Your ITR within the designated period. Also it is an essential step to maintain your records for easy ITR filing. Seeking guidance from a tax expert ensures compliance with tax laws and it also maximizes tax benefits. Consult with Bizfoc as it provides smooth services for ITR filing for sole proprietorship.

Documents Required for ITR Sole Proprietorship

Documents for Income Tax Return Filing for Sole Proprietorship are as follow:

• Aadhaar Card
• PAN Card
• Bank account details
• Form 16 (salary and TDS details)
• Form 26AS (tax credit statement)
• Receipts for tax exemptions or deductions (if applicable)
• Bank interest statements
• Capital gains statements (for asset sales)
• Documents related to foreign assets and income (if applicable)

Steps to file ITR for Sole Proprietorship

Here's a step-by-step guide to filing an Income Tax Return (ITR) for Sole Proprietorship:

Step 01. Get Your PAN Card:

Before filing ITR for Sole Proprietorship, you should understand your PAN Card is the ticket to fulfill your tax obligations. Ensure you have your PAN Card issued by the Government Department. Remember Sole Proprietorship is a separate legal entity, you’ll pay your income tax by PAN only

Step 02. Register on Portal:

Once you arrange your PAN Card, you need to register yourself on the government portal, if you haven’t registered before. While registering on the portal, you have to fill your PAN details carefully.

Step 03. Provide all documents:

Once you register yourself on the portal, you need to submit all your documents for verification. Verification is a crucial step, any failure can lead to rejection of application. For a better and easier application consult with Bizfoc.

Step 04. Get Clear Tax Insights:

Bizfoc experts and CA will resolve your queries and calculate your tax liability. Bizfoc maintains transparency with its clients and does not include any hidden charges.

Step 05. ITR Filing:

At last we will file your ITR for Sole Proprietorship on time and we at Bizfoc help to avoid penalties.

Audit of Proprietorship

Depending on the annual turnover of the business sometimes an audit of proprietorship is necessary. There are three major situations in which an audit is necessary, they are as follow:

• If throughout the assessment year over ₹1 crore was made by the proprietorship firm.
• If total annual receipt reaches ₹50 lakh by a professional proprietorship, an audit must be considered.
• If a proprietorship is subject to any presumptive tax scheme, an audit is essential regardless of the annual turnover.

Benefits of ITR Filing for Sole Proprietorship

Following are the benefits one could get after filing ITR for sole proprietorship:

• ITR for Sole Proprietorship acts as a legal document and it holds immense legal value.
• To reduce burden on the taxpayers and to encourage more people to pay their taxes, the government allows certain deductions to you. You can also claim back your TDS & Rebates.
• Your ITR can be used as an important document while applying for loans. Banks generally ask for ITR for the last three years.
• If you don’t file your ITR, then it can deter your plan to go abroad. ITR is one of the documents that are required by a country that you want to visit.
• ITR filing also helps in avoiding penalties and punishments, as the taxes that apply to you are governed by Income Tax Act 1961.

Why Choose Bizfoc For ITR Filing?

Through complete documentation management, clear procedure advice, and proactive question resolution with our knowledgeable business consultants, Bizfoc simplifies your interactions with the government. For income tax return filing, get in touch with Bizfoc by filling the contact form or directly call our tax consultant.

FAQs for ITR for Sole Proprietorship