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Limited Liability Partnerships (LLPs) are separate legal entities from their partners, and they must file an Income Tax Return (ITR) annually under Indian tax laws. LLPs are required to report their income, expenses, and tax liabilities through the ITR process, irrespective of whether they have conducted any business during the financial year.
The ITR filing for LLPs depends on their income, turnover, and the requirement of a statutory audit. LLPs must comply with both the Income Tax Act and, if applicable, GST regulations. Proper ITR filing ensures that LLPs remain compliant and avoid legal consequences such as penalties, fines, or disqualification.
Mandatory ITR Filing: LLPs must file ITR even if there is no income or business activity.
Applicable Form: LLPs are required to file their return using Form ITR-5.
Due Dates:
If no audit is required: July 31st of the assessment year.
If an audit is required: September 30th of the assessment year.
Audit Requirement: If the turnover exceeds ₹40 lakhs or the contribution exceeds ₹25 lakhs, an audit by a certified Chartered Accountant is mandatory.
Accurate and timely ITR filing for LLPs is crucial to staying compliant with Indian tax laws and maintaining a good financial standing.
Initial costs
TDS on LLP payments
Take into account the LLP provisions of the GST (if applicable)
Partners’ compensation (Special Treatment).
The income tax rate for Limited Liability Partnerships (LLPs) in India is structured as follows:-
Flat Tax Rate:-
LLPs are taxed at a flat rate of 30% on their total income.
Surcharge:-
A surcharge of 12% is applicable if the total income of the LLP exceeds ₹1 crore.
Health and Education Cess:-
A 4% cess on the total of income tax and surcharge is levied, applicable across all LLPs.
If an LLP has a taxable income of ₹1.5 crores, the tax calculation would be:
Basic Tax (30%) = ₹45,00,000
Surcharge (12%) = ₹5,40,000 (on ₹45,00,000)
Health & Education Cess (4%) = ₹2,01,600 (on ₹50,40,000)
Filing an income tax return (ITR) for an LLP involves a structured process. Here’s a step-by-step guide
Before filing, ensure you have the following:-
If your LLP’s turnover exceeds ₹40 lakhs or your income is over ₹25 lakhs, a tax audit is mandatory. The audit report needs to be filed along with Form 3CA/3CB and 3CD.
For LLPs, the applicable form is ITR-5. It can be downloaded from the income tax department’s e-filing portal.
Income from business or profession
Other income (such as interest)
Deductions or exemptions applicable
After filling out the form, validate it to ensure there are no errors. The portal will highlight discrepancies if any, which you should correct before proceeding.
If your LLP is subject to audit, ensure the audit report (Form 3CA/3CB and 3CD) is submitted online along with the ITR.
After submission, download the acknowledgment (ITR-V) for future reference.
If you’re eligible for a refund, track the status on the e-filing portal.
Following these steps ensures a smooth and accurate LLP income tax return filing.
Every Limited Liability Partnership (LLP) in India is required to file its annual returns with the Registrar of Companies (ROC) and the Ministry of Corporate Affairs (MCA) to ensure compliance with regulatory norms. LLPs must file Form 11 (Annual Return) and Form 8 (Statement of Account & Solvency) every financial year, irrespective of their turnover or business activities. These filings are crucial to keep the LLP’s status active and avoid penalties for non-compliance.
Form 11 needs to be filed within 60 days from the closure of the financial year (i.e., by May 30th), and Form 8 within 30 days after six months from the end of the financial year (i.e., by October 30th).
Filing annual returns helps LLPs maintain transparency and ensures they meet statutory requirements set by the MCA.
Income Tax Return (ITR Filing)
Due Date: July 31st of the assessment year.
Applicable: LLPs that do not require an audit of their accounts.
Income Tax Return (ITR Filing) with Audit
Due Date: October 31st of the assessment year.
Applicable: LLPs that require a mandatory audit of their accounts under the Income Tax Act.
Form 11 (Annual Return)
Due Date: May 30th of every year.
Applicable: All LLPs must file this form within 60 days from the end of the financial year.
Form 8 (Statement of Account and Solvency)
Due Date: October 30th of every year.
Applicable: LLPs must file this form within 30 days after six months from the end of the financial year.
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ITR Filing for Sole Proprietorship Firm FAQ
The due date for filing the Income Tax Return (ITR) for a sole proprietorship firm is generally July 31st of the assessment year if tax audit is not required. If a tax audit is required, the due date is usually extended to September 30th.
Yes, it is mandatory for sole proprietorship firms to file ITR if their total income exceeds the basic exemption limit, which is ₹2.5 lakh for individuals below 60 years of age.
Yes, proprietors can claim business expenses such as rent, salaries, office expenses, travel, and depreciation, which reduces the taxable income.
Under Section 44AD, small businesses can opt for the presumptive taxation scheme, where 8% (6% if receipts are digital) of total turnover or gross receipts are considered as income, without maintaining detailed books of accounts.
No, GST input tax credit cannot be claimed in the ITR. It is claimed while filing GST returns, and it adjusts against the GST payable.
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