Firm with NIL income - necessary to file ITR?

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

Naveen Kumar Jain

Naveen Kumar Jain (Querist)
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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)
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20 January 2022 Yes, allowed.

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