Home / Proprietorship Compliance

Updated on 29 Sep 2020  9.00 AM IST | 4 min read

An Overview to Proprietorship Registration

Proprietorship firms needs to maintain compliances like LLP’s and companies (Public or Private limited company). Proprietorship firm compliance mainly includes income tax return filing whereas LLP & companies needs to submit both the reports – Income tax return filing to the income tax department and annual filing to the ministry of corporate affairs. Sole proprietorship firms also need to comply with TDS regulations, GST regulations, ESI regulations etc.

The requirement of compliance varies depending upon the type of entity, industry, state of incorporation, number of employees & sales turnover. It has very minimal statutory compliances as compared to public or a private limited company. In case of sole-proprietorship, a sole proprietor does not enjoy the benefit of separate legal entity and limited liability. The annual income of sole proprietor is considered as the annual income of the proprietorship firm. There is no need to file any annual report or financial statement to MCA. The major compliances of sole proprietorship firms are tax related periodic and annual compliances.

What Is Included In Our Package?

Eligibility Consultation

Document Preparation

Application Drafting

Government Fees

Documents Required for Annual Compliances for Proprietorships Registration

  • Invoices of purchase & sales during a financial year
  • Invoices of expenses incurred during a financial year
  • Bank statements for all bank accounts in the name of firm in a financial year.
  • Credit card statement for expenses incurred by proprietor on behalf of a company (If any)
  • Copy of TDS challans deposited (if any)
  • Copy of GST returns filed (If any)
  • Copy of TDS returns filed (if any)

Procedure For Annual Proprietorship firm Compliance Fulfillment

The procedure for annual compliance fulfillment is as follows –

  • Maintain proper books of accounts
  • Preparation and filing of balance sheet.
  • Comply with GST requirements
  • File the income tax return to income tax department.

Major Compliances For A Proprietorship Firm

  1. Income tax filing – Every sole proprietor running a proprietorship firm has to mandatorily file income tax return, if his taxable income lies above the exemption threshold. In some of the cases, audit is also required.
  2. GST filing – Sole proprietors registered under GST has to mandatorily file GST returns monthly, quarterly and annually.
  3. TDS filing – Proprietors having TAN must file quarterly TDS returns as per TDS rules
  4. ESI return – All proprietors registered under ESI act has to mandatorily file ESI returns. ESI registration is required in case a proprietor employs 10 or more employees in a firm.

Penalty for not filing Proprietorship Compliances

  • Late filing or non-filing of income tax return before the due date will attract a penalty of Rs.200 per day.
  • Late filing or non-filing of GST return before the due date will attract penalty of Rs.200 per day.

Proprietorship Compliances FAQ’S

Sole proprietorship firm complies with income tax regulations, TDS regulations, GST regulations, ESI regulations.
No, there is no need for proprietors to prepare audited financial statement every year. A tax audit may be required depending on turnover and other criteria.
No, sole proprietorship firm doesn’t enjoy the benefit of separate legal entity and limited liability.
Rs.200 per day will be charged as a penalty for late filing or non-filing of income tax return.
MEET US

What Clients Say

Customer delight is our main goal and we are very serious about it.
Prakash Verma

Prakash Verma

“Finacbooks.com is a perfect example of a great customer service dealing with the best of accountancy services.“
Prakash Verma Signature
Praveen Chauhan

Praveen Chauhan

“They offered us good quality services in a least possible time at a best Price.“
Praveen Chauhan Signature
Pradeep Kochhar

Pradeep Kochhar

“Finacbooks.com is a trusted network of highly qualified accounting professionals who not only provided us quality accountancy services but also supported us by answering our each & every query on time without any delay. “
Pradeep Kochhar Signature
Informational, useful and resourceful

Blogs

Catch up our trending topics, news etc. in a simple, detailed and most professional way.
Section 194IC of Income Tax Act: TDS on Payment under Joint Development

Section 194IC of Income Tax Act: TDS on Payment under Joint Development

08 Sep, 2020

What is Section 194IC of the Income Tax Act Any person who is paying rent to a land owner (owner of land or building or both) under the... Read More

Section 194IA of Income Tax Act: TDS on Property Purchase of Immovable Property

Section 194IA of Income Tax Act: TDS on Property Purchase of Immovable Property

31 Aug, 2020

Section 194IA of the income tax act As per section 194IA of the income tax act, it is mandatory for a buyer of immovable property (except... Read More

Section 194IB of Income Tax Act: TDS on Rent paid by Individuals or HUF

Section 194IB of Income Tax Act: TDS on Rent paid by Individuals or HUF

31 Aug, 2020

What is Section 194IB of the income tax act? As per section 194IB of the income tax act, it is mandatory for individuals/HUF’s who are... Read More

CONTACT US

We Are Everywhere

We are having a wide network operating all across India as well as Internationally.
World Map

Contact Us

30+ Offices in
India
10+ Years Experience
Save Your
Time
Quick Turn around Time
Qualified Professionals
Excellent Customer Service