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LLP Director without any income

ITR Filing 385 views 1 replies

Which ITR should be filed by an LLP director without any income? LLP is running in loss, there is absolutely no income - in this case which ITR is to be filed by the director for his personal filing. 

The accounts for the llp are maintained and ITR5 is being filed for the LLP itself, but for individual director and designated partner which ITR is to be filed.

If ITR3 is to be filed, then do we also specify Balance Sheet, PL etc which is already mentioned in ITR5 for llp?

Thanks for all the help :)

 

Replies (1)

Hi Ridha,

Great question — this is a common situation for LLP partners/directors when there’s no personal income or only losses in the LLP. Let’s clarify this step-by-step so you’re compliant with the Income Tax rules.


🔍 Your Situation:

  • You are a Designated Partner (equivalent to "director") in an LLP.

  • LLP is filing ITR-5 (as required).

  • LLP has no profit (i.e. running at a loss).

  • You (as an individual) have no other personal income.


✅ Which ITR should you file personally?

👉 You should file ITR-3, because:

Partners in LLPs are required to file ITR-3, regardless of income from LLP — even if their share is zero or there’s a loss.

Why?

  • Designated Partners in an LLP are considered as "carrying on business or profession" for tax purposes.

  • As per the ITR instructions, ITR-3 is mandatory for:

    • Individuals who are partners in a firm/LLP

    • Whether or not they receive remuneration, interest, or profit


❌ Can you file ITR-1 or ITR-2?

No — both ITR-1 and ITR-2 explicitly disallow use by partners in an LLP.


⚙️ Do You Need to Fill Balance Sheet & P&L in ITR-3?

No, you don’t need to fill full Balance Sheet or P&L of the LLP in your personal ITR-3.

Here’s why:

  • The Balance Sheet and P&L of the LLP are already reported in ITR-5.

  • In your ITR-3, you will:

    • Go to "No Books of Account" section under “Business & Profession”

    • Choose: "Partner of a Firm (not liable for audit under Section 44AB)"

    • You’ll just report:

      • Firm Name

      • PAN of LLP

      • Share of Profit (can be zero)

      • Remuneration/Interest received, if any (can be zero)


📝 Filing ITR-3 with Zero Income? Still Necessary?

Yes — even if:

  • Your income is below the basic exemption limit, or

  • You had no income at all,
    you still need to file ITR-3, to:

  • Comply with rules for LLP partners

  • Maintain clean compliance history


✅ Summary

Situation Action
LLP partner with no income/remuneration ✔️ File ITR-3
Include LLP Balance Sheet/P&L in ITR-3? ❌ No, only basic partner details
Tax audit required personally? ❌ No, audit is for LLP (via ITR-5)
Can I file ITR-1 or ITR-2? ❌ No, not permitted for LLP partners


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