Firm with NIL income - necessary to file ITR?

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This query is : Resolved

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Even if your partnership firm had no business activity and zero income for the financial year 2021-22, it is still mandatory to file an Income Tax Return (ITR). You can file ITR-3 to show a loss, even without an audit, to cover fixed expenses incurred during the year and keep your PAN active for future business.

Naveen Kumar Jain

Naveen Kumar Jain (Querist)

19 January 2022 A partnership Firm has been filing ITR 4 under presumption income scheme till FY 2020-21. Now in FY 2021-22 it has not done any business and is not likely to do so in the financial year 2021-22, So its income will be NIL. Will it still be required to file its tax Return for AY 2022-23?
As it may get some business in future, it does not want to surrender its PAN card.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

19 January 2022 ITR filing of partnership firm is mandatory, even if no transactions.

Naveen Kumar Jain

Naveen Kumar Jain (Querist)

20 January 2022 ok, but can we file ITR 3 instead of ITR 4 showing loss in A.Y 2022-23 with out audit, since there is no income but fixed expenses to the extent of 50000/- are still incurred.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

20 January 2022 Yes, allowed.

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