Annual Compliances of Partnership

A Partnership firm is a type of business entity in which 2 or more people start a business together, sharing the profits and losses of the business. In a Partnership, the partners are personally liable for the debts and losses of the business. All businesses registered as a Partnership in India are required to file their Income Tax Return (ITR) each year.

The annual compliances of a Partnership firm also include maintaining the books of accounts. If the annual sales turnover of the Partnership is more than Rs. 1 crore, an audit is required. In addition to this, a Partnership firm is also required to adhere to the TDS regulation compliance and GST filing.

Partnership Firm Annual Compliances

Documents required for Annual Compliance Filing of Partnership

  1. Invoices of purchases and sales during the year
  2. Invoices of expenses incurred during the year
  3. Bank statements for all bank accounts in the name of partners
  4. Copy of TDS challans, if any

Process of Annual Compliance Filing of Partnership

The ITR of the Partnership is filed after collecting the required documents in the form of ITR-5 and if the Partnership firm meets the criteria, the audit is prepared for the firm as per the Income Tax Act. The due date for ITR filing in case of no audit is July 31, and due date in case of an audit is September 30.

FAQs

What is a Partnership firm?
Partnership is a type of business entity wherein 2 or more individuals come together to form a business, whereby they share the profits and losses in accordance with their share.
What is a Partnership Deed?
A Partnership Deed is the legal document that lays down the stipulations relating to how the partnership will be managed, details about the partners, their shares and roles and responsibilities.
What is Annual Compliance for Partnership firms?
Annual compliances for a Partnership firm primarily include filing the Income Tax Return and conducting an audit. The other compliances include TDS regulation, GST filing and others.
Is it necessary to register a Partnership?
No, it is not necessary to register a Partnership. However, it is advised to get the firm registered to give it a legal identity. Annual compliances are mandatory irrespective of the registration status of the Partnership.
What are the due dates for annual filing of a Partnership?
The ITR of the Partnership firm must be filed by July 31 in case no audit is required. If an audit is conducted, the ITR can be filed by September 30.
What is Tax Audit requirement for Partnership Firm?
Partnership firms having annual turnover of over Rs. 1 crore are required to obtain a tax audit.
Is a Partnership firm required to file GST returns?
Under the GST regime, partnership firms having GST registration would be required to file monthly, quarterly and annual GST returns.
How is the ITR of a Partnership filed?
The Income Tax Return of a Partnership firm is filed in form of ITR-5 with the Income Tax Department.
Can the Annual Compliances of a Partnership be filed online?
Yes, the entire process of the ITR filing and audit can be done online.
Is a Digital Signature required for ITR filing of Partnership?
Yes, in case of online filing of the ITR, the digital signature of the partners is needed.