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How is sole proprietorship taxed ?

Rahul (.) (303 Points)

11 July 2016

Hi Friends,

One of my friends runs a sole propreitorship firm? How is the income tax to be files ? In his name or in firms name? What is the last date of filing return?

If it is in his name do we need to submit any details of books of accounts while filing return of income?
Do the sole propreitorship needs a PAN?

Please help

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4 Replies

Dinesh Mertiya (PROFESSIONAL) (761 Points)
Replied 11 July 2016

Dear Rahul

As mentioned, Your friend is sole proprietor ...means individual not partnership firm.....ok

Income tax return will be filed with PAN of proprietor .

1 Like

Dinesh Mertiya (PROFESSIONAL) (761 Points)
Replied 11 July 2016

If your turnover(Sales) is not more than 1 crore and profit from business is more than 8% of gross receipt or turnover for the year

Your can file your return in ITR-4S or ITR -4, subject to other information

1 Like

Priya R (17 Points)
Replied 15 July 2016

1. Income Tax Return will be filed in the name of " Sole Proprietor".
2. Due date is 31st July ( in case, no audit is applicable )
30th September ( if audit applies) .
3. PAN of Proprietor is Mandatory while filing ITR.

Priya R (17 Points)
Replied 15 July 2016

In case audit applies, you have to maintain books of accounts.
In case Gross receipt exceeds 10,00,000 or total income exceeds 1,20,000 in any of 3 years immediately preceding previous year. You have to maintain books of accounts.
and also Every person carrying on the Legal, Medical, Engineering, Accountancy or Interior Decoration or any other profession as notified by CENTRAL BOARD OF DIRECT TAXES (CBDT) are required to maintain such books of accounts & other documents as may enable the Assessing Officer to compute Assessee’s total income.