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A Comprehensive Guide to File ITR Online for a Sole Proprietorship

File ITR Online

Are you a sole proprietor and want to know about the online ITR filing of your proprietorship? Don’t worry! Legal Pillers is here to solve your confusion. It is very crucial for each and every taxpayer including a sole proprietor to file ITR Online. For this, you should know about the Income Tax. Income Tax is the direct tax that public has paid to the government of India every year. The CBDT i.e. Central Board of Direct Taxes imposes the Income tax on the individuals that include sole proprietors also. On the other hand, Income Tax Return is a self declaration form that has been used by the public for the declaration of their income.

Income Tax Return filing is crucial for the sole proprietorships in order to carry forward losses, claim tax deduction and refund, and many more. ITR Filing is essential for maintaining the finances properly. To get a clear picture about ITR Filing online for sole proprietorship, you can seek the guidance of ITR Filing Consultants.

Before moving ahead with ITR filing, let’s have a quick glimpse what a sole proprietorship is.

A sole proprietorship is a business that has been owned and managed by a single individual. It is the cheapest, easiest and simplest form of the business. You can run your sole proprietorship by your legal name and may be by a different trade name after registering it with their local authority. For an aspiring entrepreneur who wants to establish the business, it is the most preferable choice as there are less government regulations available for sole proprietorship. It has the unlimited liability i.e. the proprietor is individually authorized for all the profits and also liable for the losses and debts of the proprietorship. 

Who is Eligible to File ITR Online for Sole Proprietorship?

The tax obligations of the sole proprietorships are similar to that of individuals. It means the ITR filing of a sole proprietorship aligns with that of Income Tax Return of a proprietor or individual. Here, in this section we will tell you about the eligibility criteria-

  • If the total income of a proprietor is more than the basic exemption limits of either 2.5 Lakhs, or 3 Lakhs, or 5 Lakhs as per the taxable limit applicable to you.
  • If you pay the electricity bills of more than Rs. 1 Lakh then you must have to file the ITR.
  • If you have deposited an amount of over 1 Crore in your current bank accounts in a financial year, then tax filing is must for you.
  • If an amount of more than Rs. 2 Lakhs has been spent by you for travelling internationally to foreign country in a financial year, then you are required to file the ITR.
  • If you have assets in foreign countries or have a source of income from outside the country, or have signing authority for any account outside the country, then you must have to file an ITR.

Appropriate ITR Forms for Sole Proprietorship to File ITR Online

  • If individuals or HUFs that run sole proprietorship and have the income from profits and gains of the business or profession that you have to file ITR 3 to fulfill your tax obligations.
  • On the other hand, if individuals or HUFs (Hindu Undivided Families) having total income up to Rs. 50 Lakhs and falls under the Presumptive Taxation Scheme as per sections 44AD, 44ADA, or 44AE must have to file the ITR 4 (Sugam).

Details Included in ITR Form to File ITR Online for Sole Proprietorship

  • Part A: General Information 

In this part of the form you have to fill the basic information including name, address, PAN, Aadhaar, assessment year and contact information.

  • Part B: Gross Total Income

Under this section you have to mention the detailed breakdown of your total income including income from salary, income from house property, profits and gains from your proprietorship, capital gains, and income from other sources. However, in ITR 4 you also have to enter the income from business and profession u/s 44AD, 44ADA, or 44AE.

  • Part C: Deductions and Taxable Income

In this section you have to enter the details of all the deductions u/s 80 of Income Tax Act and also about the total taxable income.

  • Part D: Computation of Tax Payable

In this section, you have to calculate the total tax payable as per the applicable slab rates. It also includes the interest payable u/s 234A/B/C.

  • Part E: Other Information

This section includes the other information like bank account details, declaration by the taxpayer, and various schedules.

Tax Slabs and Rates for Sole Proprietorship to File ITR Online

Income tax slabs and rates for the sole proprietorship are similar to that of individuals. Here, in this section of blog, we will discuss about its tax slabs and rates-

New Tax Regime

Income Tax Slab Income Tax Rate
Up to Rs. 3 Lakhs Nil
Rs. 3 Lakhs – Rs. 7 Lakhs 5% (tax rebate u/s 87A)
Rs. 7 Lakhs – Rs. 10 Lakhs 10% 
Rs. 10 Lakhs – Rs. 12 Lakhs 15%
Rs. 12 Lakhs – Rs. 15 Lakhs 20%
Above Rs. 15 Lakhs 30%

 

Old Tax Regime

Income Tax Slab Income Tax Rates
Below 60 Years 60 Years and Above

But below 80 years

 Super Senior Citizens (Above 80 Years)
Up to Rs. 2.5 Lakhs Nil – Nil
Rs. 2.5 Lakhs – Rs. 3 Lakhs 5% Nil –
Rs. 3 Lakhs – Rs. 5 Lakhs 5%  5%  Nil
Rs. 5 Lakhs – Rs. 10 Lakhs 20%  20(%)  20% 
Above Rs. 10 Lakhs 30% 30(%) 30%

 

Due Dates to file ITR for a Sole Proprietorship

A sole proprietorship can file the form either ITR 3 or ITR 4 (Sugam). Here is the last date of filing these two forms are as following-

  • If book of accounts of a sole proprietorship is required to get audited, then the Income Tax Return last date for ITR 7 will be October, 31st 2024.
  • If there is no need of auditing for your sole proprietorship, then the ITR Filing last date will be July 31st, 2024

Steps to File ITR Online for Sole Proprietorship

Online ITR Filing for a sole proprietorship includes a number of steps. It seems to be difficult to file ITR for sole proprietorship. But you can navigate the complexities of filing ITR online with the help of professional ITR Filing Consultants like Legal Pillers. Here, in this section of blog, we will provide you a simple breakdown of the steps include in this process. Here is the procedure-

  • Step 1: Gather Necessary Documents

First of all you have to gather all the essential financial documents including audited financial statements, bank statements, receipts related to TDS, and all the other supporting documents related to the income and expenditure of the company.

  • Step 2: Select the Correct ITR

A Sole Proprietorship has to file the ITR by using either form ITR 3 or form ITR 4 (if you fall under section 44AD, 44ADA, or 44AE). Select the ITR form carefully as per your income sources and understand the sections related to the financial data properly. Make sure that all the information is accurate.

  • Step 3: Compute Your Tax Liability

After that, you have to calculate the total income of the company including all the applicable exemptions and deductions as per the section 80. And then compute your tax liability.

  • Step 4: Prepare and Validate Your ITR

Then you have to fill the form ITR 3 or ITR 4 online via e-filing portal of Income Tax Department. Also validate your form to make sure that all the mandatory fields have been filled accurately.

  • Step 5: Upload and Submit

After that you have to upload your respective ITR along with all the requisite documents. At last submit your ITR electronically.

  • Step 6: Verification

After the successful submission, E- Verification of the ITR is the most crucial step. Your Income Tax Return will be incomplete until you verify it. You have the option to e – verify the ITR via Aadhaar OTP, Net banking, EVC i.e. Electronic Verification Code or by sending a physical copy of ITR to CPC Bengaluru. You can also verify your ITR 7 by using DSC i.e. Digital Signature Certificate. 

  • Step 7: Acknowledgement

At last after completing the verification step, you will get an acknowledgement receipt from the Income Tax Department. It would be best to keep this receipt safely for your future reference.

The sole proprietors may find the above mentioned steps of ITR filing lengthy. But you can fulfill your tax obligations if you follow the above steps accurately and carefully. You can seek the expertise by simply searching “CA near me for ITR Filing” on Google.

Why Legal Pillers is best to File ITR Online for Sole Proprietorship?

  • Accuracy and Compliance 

With LegalPillers, you can trust that your tax returns will be accurate and compliant with current tax laws and regulations. The platform provides thorough guidance and checks to make sure that everything is in order.

  • Expert Support

If you ever have questions or need assistance, LegalPillers has a team of tax professionals ready to help. Our dedicated team will make sure that you will get the support you need to file your taxes correctly for your better financial future.

  • Secure Data Handling

Your data security is a top priority for LegalPillers. We work with advanced encryption techniques so that your sensitive financial information will remain safe from unauthorized access.

  • Time and Cost Efficient

By using LegalPillers, you’ll save both time and money. The platform simplifies the filing process, saving your precious time. Moreover, our competitive price makes sure that you will get the best service with an affordable ITR Filing fees by CA.

  • More Convenience

Income Tax Return Filing online with LegalPillers is exceptionally convenient. You can access the platform anytime, anywhere, from any device with an internet connection, eliminating the need of personal visits to tax offices.

  • Comprehensive Services

LegalPillers offers more than just tax filing. We provide a range of services as per all the tax-related needs of your proprietorship, from planning and advisory services to GST registration and compliance.  

These are the reasons why Legal Pillers why Legal Pillers is the premier choice of the sole proprietors in order to maintain tax obligations as well as to file Income Tax Return. With Legal Pillers you will get the peace of mind. Knowing that your finances are I good hand.

Conclusion

It is essential for every proprietor to file their income tax return in order to maintain the tax obligations and fulfill their social responsibility. Online ITR Filing also provides the numerous benefits to the sole proprietorships. You can also seek the expert guidance of ITR Filing consultants like Legal Pillers. Our dedicated team of professionals has the expertise in ITR Filing for sole proprietorships. You will get the best ITR Filing Consultants with Legal Pillers. You can also search us by typing “CA near me for ITR Filing.

For any query related to ITR Filing for sole proprietorship, you are free to contact Legal Pillers at-

Phone: +91-962527978; +91-9267941961

Email: [email protected] 

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