Sole Proprietorship Annual Compliance Filing

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Sole Proprietorship Annual Compliance Filing
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Annual Compliances For Sole Proprietorship

Sole Proprietorship is a kind of business entity managed and owned by just 1 individual. The owner of a proprietorship is personally liable for the debts and losses of the business as the identity of the business is considered to be the identity of the owner.

The annual compliances of a Sole Proprietorship include the filing of Income Tax Return (ITR) and preparing the Tax Audit. A sole proprietorship needs to file an ITR if the annual turnover is more than Rs. 2.5 lakhs. A tax audit is required if the annual turnover of the proprietorship is more than Rs. 1 crore or if the business is under presumptive taxation scheme irrespective of turnover if the income claimed is lower than the deemed profits and gains under the scheme.

Sole Proprietorship is a kind of business entity managed and owned by just 1 individual. The owner of a proprietorship is personally liable for the debts and losses of the business as the identity of the business is considered to be the identity of the owner. The annual compliances of a Sole Proprietorship include the filing of Income Tax Return (ITR) and preparing the Tax Audit. A sole proprietorship needs to file an ITR if the annual turnover is more than Rs. 2.5 lakhs. A tax audit is required if the annual turnover of the proprietorship is more than Rs. 1 crore or if the business is under p
esumptive taxation scheme irrespective of turnover if the income claimed is lower than the deemed profits and gains under the scheme.

Sole Proprietorship is a kind of business entity managed and owned by just 1 individual. The owner of a proprietorship is personally liable for the debts and losses of the business as the identity of the business is considered to be the identity of the owner.

The annual compliances of a Sole Proprietorship include the filing of Income Tax Return (ITR) and preparing the Tax Audit. A sole proprietorship needs to file an ITR if the annual turnover is more than Rs. 2.5 lakhs. A tax audit is required if the annual turnover of the proprietorship is more than Rs. 1 crore or if the business is under presumptive taxation scheme irrespective of turnover if the income claimed is lower than the deemed profits and gains under the scheme.

Cost effective & Transparent Pricing

Basic

Rs. 5899/- inclusive of all fees

Income tax return filing and compliance management for a proprietorship firm with a turnover of less than Rs.10 lakhs per annum.

Standard

Rs. 12899/- inclusive of all fees

Income tax return filing and compliance management for a proprietorship firm with a turnover of less than Rs.50 lakhs per annum.

Advanced

Rs. 19899/- inclusive of all fees

Income tax return filing and compliance management for a proprietorship with a turnover of less than Rs.100 lakhs per annum.

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Choose The Compliances For Your Business

Compare the annual compliances of different kinds of business structures!

Compliances Private Limited Company Limited Liability Partnership One Person Company Partnership Firm Sole Proprietorship
+ Board Meeting Compulsory Not Compulsory Not Compulsory Not Compulsory Not Compulsory
  It is compulsory to conduct 4 board meetings in a year and 1 meeting within 30 days of incorporation. A board meetings for designated partners is not mandatory. A board meeting is required only if there are more than 1 directors. No board meeting is required. No board meeting is required.
+ Annual General Meeting Compulsory Not Compulsory Not Compulsory Not Compulsory Not Compulsory
  It is compulsory to hold an AGM. No AGM is required. An AGM can be conducted if there are more than 1 directors. No AGM is required. No AGM is required.
+ Annual Tax Filing Compulsory Compulsory Compulsory Compulsory Not Compulsory
  It is mandatory to file ITR irrespective of income. It is compulsory to file an ITR regardless of the annual turnover. It is compulsory to file an Income Tax Return. It is compulsory to file an ITR every year. An ITR must be filed if the annual income crosses Rs. 2.5 lakhs.
+ Tax Audit Conditional Conditional Conditional Conditional Conditional
  A tax audit is required if the annual turnover crosses Rs. 1 crore. A tax audit is required if the annual turnover crosses Rs. 1 crore. A tax audit is required if the annual turnover crosses Rs. 1 crore. A tax audit is required if the annual turnover crosses Rs. 1 crore. A tax audit is required if the annual turnover crosses Rs. 1 crore.
+ Annual Compliances Many Some Many Few Few
  Annual compliances include balance sheet, profit and loss account, acocunt flow statement, statement of changes in equity and an Annual Return. Annual compliances include Annual Return and statement of accounts & solvency. Annual compliances include balance sheet, profit and loss account, acocunt flow statement, statement of changes in equity and an Annual Return. Annual compliance include ITR filing and tax audit (if applicable). Annual compliance include ITR filing and tax audit (if applicable).
+ Compliance Cost High Medium High Low Low
  As there are numerous compliances, the cost is high. Compliances are limited and it costs less than PLC/OPC. As there are numerous compliances, the cost is high. There are a few compliances and the cost is extremely low. There are a few compliances and the cost is extremely low.
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Frequently Asked Questions

What is a Sole Proprietorship?
A sole proprietorship is a kind of business entity owned, managed and controlled by one person. The business does not have a separate legal identity and the owner has unlimited liability.
Is GST registration mandatory for a Sole Proprietorship?
A sole proprietorship will have to get its GST registration done if it falls under any of the following criteria: 1. If the business has an aggregate turnover of more than Rs. 20 lakhs. For dealers in North-Eastern states of India, GST is compulsory if the business has an aggregate turnover of more than Rs. 10 lakhs. 2. If the business is selling on any online platform. 3. If the business is engaged in inter-state supply of products or services.
Who can start a Sole Proprietorship?
Any Indian citizen with a current bank account number in the name of his business can start sole proprietorship.
Can a Foreigner or NRI register a Sole Proprietorship in India?
No, a sole proprietorship cannot be started by an NRI or foreign national.
Can there be partners in a Sole Proprietorship?
A Sole Proprietorship is managed and owned by one individual only. There cannot be any partners, shareholders or investors.
What is the capital required to start a Proprietorship?
There is no minimum capital requirement for starting a Sole Proprietorship.
Is a Tax Audit required for a Sole Proprietorship?
A tax audit is required for a Sole Proprietorship if the annual turnover of the business is more than Rs. 1 crore.
Can other people invest in a Sole Proprietorship?
A Proprietorship cannot issue shares or have investors as the business is completely managed and owned by a single individual.
Does a Sole Proprietorship have a separate legal identity?
No, the Proprietorship firm and the Proprietor are one and the same.
Do all Sole Proprietorships need to file an ITR?
Only the Sole Proprietorships which have the annual turnover of more than Rs. 2.5 lakhs need to file an ITR.

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