New Partnership Formed

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A newly formed partnership firm, with no sales by March 31st, 2020, is unsure whether to file ITR 4 or ITR 5. Income tax return filing is mandatory for all partnership firms, regardless of turnover. The correct form to file is ITR 5, as ITR 4 is designated for individuals, HUFs, and firms opting for presumptive taxation schemes like 44AD/ADA/AE. Preliminary expenses incurred before sales should be handled appropriately within the tax filing.

Mahabir Prasad Agarwal

Mahabir Prasad Agarwal (Querist)

24 March 2021 A new partnership firm was created during Nov.2019. Till 31.03.20, no any sales were made. Only purchases and various preliminary expenses were incurred. May I file ITR 4 of the firm ? If not, preliminary expenses to be shown in which head ?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

24 March 2021 Income tax return filing is mandatory for partnership ship firm irrespective of business done or not.

Mahabir Prasad Agarwal

Mahabir Prasad Agarwal (Querist)

24 March 2021 May I File ITR 4 ?

CA Puja Sharma

CA Puja Sharma (Expert)

24 March 2021 Income tax Return filing is mandatory for Partnership firms.
ITR 5 should be filed.
ITR 4 is for individuals, HUF and Firms if they are reporting their income u/s 44AD/AADA/44AE

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