A business tax return is a statement filed by the businesses to declare their income & losses in front of tax department. It also contains details about the assets & liabilities held by the business. Items such as fixed assets, current assets, debtors, creditors, accounts receivable, accounts payable, long term debt etc. are declared.
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Who Has To File a Business Tax Return
It is mandatory for all businesses to file tax returns. Failing to file business tax return will incur fines, penalties etc.
Business return should be filed within time by the following persons –
In case, you are a self-proprietor and you declare your business income & other personal income such as income from house property, interest income in the same return.
If your total income before deduction is above the basic taxable limit i.e. Rs.2.5 lakhs. You need to mandatorily file your business tax return irrespective of profit & loss in the business.
Companies, firms & LLP have to mandatorily file business tax returns even if there are no operations undertaken.
Companies, firms & LLP’s are taxed at a rate of 30%.
Income Tax Audit
Every business tax payer has to appoint chartered accountant to audit their accounts. It is mandatory for every tax payer to get their tax audit done if his or her turnover is above Rs.1 crore in case of business & Rs.50 Lakh in case of professionals.
A tax audit is needed in other cases too –
Presumptive taxation means estimating the tax on the basis of assumptions. Individuals, firms & HUF’s running businesses or providing services can offer their income to tax on presumptive basis.
Presumptive taxation is allowed up to Rs.2 crores in case of businesses whereas in case of professionals, it is up to Rs.50 Lakhs.
Under presumptive basis for businesses, minimum 8% of the turnover has to be offered as income whereas 50% of receipts have to be declared in business tax return in case of professionals.
Due Date For Filing Tax Return
For the individuals not liable for tax audit, the last date for filing tax return is 31st July after the end of the financial year. For ex- For FY 2018-19, the last date for filing tax return is 31st July 2019. However, you can file return with penalties up to 31st March 2020.
For the individuals liable to tax audit, the last date for filing the tax return is 30th September. For ex – For FY 2017-18, the last date for filing tax return was 30th September 2018 but later it was extended to 31st October 2018.
However, there is no extension in the date for payment of taxes. If you will not pay the tax amount before 30th September, you need to pay interest under section 234A.
Penalty is imposed by the tax department if you will miss or not file the tax returns before the deadline. If you file the tax returns after the due date, you cannot carry forward any loss incurred during the year. In addition to it, you will also face a fine of Rs.5000 under section 271F.