Normally ITR 4 is filled for small business (covered in Section 44AD, Section 44ADA and Section 44AE)

However in case of Audit, ITR 3 is filled

Small propreitorship.jpg

 

Section 44ADA .jpg

 

Section 44AE.jpg

 

If Gross Total Income is upto 250000

  • No need to file ITR
  • (Gross Total Income=Income from Business+ All other Incomes)
  • However Deductions(Section 80C) etc are not reduced while calculating GTI
  • (Although ITR Filing is not compulsory If GTI upto 250000,some individuals do file it as it is easier to apply for Foreign VISA and Bank loan if ITR is filed)

If Employee’s Gross Total Income > 250000

  1.  Income Tax Return is compulsory even if no tax payable if GTI >250000
  2. ITR Form Normally filled is ITR 4. However,if proprietor has other incomes like Capital Gaina Income,he has tofill ITR 3
  3. If TDS deducted by Bank etc, then TDS Certificate in Form 16A to be taken from company to file ITR
  4. It is compulsory for Company has to give this TDS Certificate by 15 May of next year
  5. In case tax is payable, first tax is paid through Challan 281 and then Return is filed

 

NOT SHOWING MINIMUM 8% PROFIT OR SHOWING LOSS

  • In this case,ITR 4 cannot be filed
  • It is compulsory to file ITR 3
  • Also accounts are required to be audited by CA

 

 

  1. Practical Income Tax
  2. Income Tax for Small Business

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .