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Proprietorship Compliance & Tax Filing Services – By Nd Salva Advocates & Legal Consultants
Running a Sole Proprietorship in India entails not only managing the business’s day-to-day operations but also adhering to various legal, tax, and regulatory obligations. From Income Tax Returns (ITR) to TDS, GST, EPF compliance, accounting, and occasionally tax audits, proprietors must ensure their filings align with the Income Tax Act, 1961 and other governing laws.
At Nd Salva Advocates & Legal Consultants, we provide end-to-end legal and compliance support to sole proprietors. Our goal is to streamline your tax filings, minimize compliance risks, and guide you through the evolving legal landscape with confidence and clarity.
What is a Sole Proprietorship?
A Sole Proprietorship is the simplest form of business structure in India. It is owned and operated by a single individual, and legally, there is no distinction between the individual and the business.
As the business income is treated as the individual’s personal income, all tax compliance obligations fall on the proprietor.
Income Tax Compliance for Sole Proprietorships
sole proprietors are taxed under the individual tax slabs and are required to file their personal income tax return including business income. There is no separate PAN or legal identity for the business – the proprietor’s PAN is used for all tax purposes.
Is ITR Filing Mandatory for Sole Proprietors?
Yes. Under the Income Tax Act, a sole proprietor must file an ITR if their gross total income exceeds the basic exemption limit, as outlined below:
| Age of Proprietor | Exemption Limit |
|---|---|
| Below 60 years | ₹2.5 Lakhs |
| 60–80 years | ₹3 Lakhs |
| Above 80 years | ₹5 Lakhs |
Note: Timely filing is crucial to carry forward business losses and to claim deductions under Sections 10A, 10B, 80-IA, 80-IB, etc.
Income Tax Slabs for Sole Proprietors (FY 2023–24)
Under Old Regime:
| Age | Income Slabs | Tax Rate |
|---|---|---|
| Below 60 | Up to ₹2.5L | Nil |
| ₹2.5L–₹5L | 5% | |
| ₹5L–₹10L | 20% | |
| Above ₹10L | 30% | |
| 60–80 Years | Up to ₹3L | Nil |
| Above ₹10L | 30% | |
| 80+ Years | Up to ₹5L | Nil |
| Above ₹10L | 30% |
Under New Regime (Section 115BAC):
| Income Slab (₹) | FY 2022–23 | FY 2023–24 |
|---|---|---|
| Up to 3L | Nil | Nil |
| 3L–6L | 5% | 5% |
| 6L–9L | 10% | 10% |
| 9L–12L | 15% | 15% |
| 12L–15L | 20% | 20% |
| Above 15L | 30% | 30% |
Note: The new regime disallows many exemptions and deductions.
Surcharge & Cess (AY 2024–25)
| Income Range | Surcharge (%) |
|---|---|
| ₹50L–₹1 Cr | 10% |
| ₹1 Cr–₹2 Cr | 15% |
| ₹2 Cr–₹5 Cr | 25% |
| Above ₹5 Cr | 37% (Old Regime) / 25% (New Regime) |
| Cess | 4% on total tax |
Presumptive Taxation Scheme (Section 44AD)
The Presumptive Taxation Scheme is available to small proprietorships with turnover up to ₹2 crores. It allows income to be presumed at:
8% of turnover (cash receipts)
6% of turnover (digital receipts)
This reduces compliance burden and removes the requirement of maintaining books or undergoing an audit.
ITR Filing Deadlines for Proprietors
| Type | Due Date |
|---|---|
| Without Audit | 31st July |
| With Tax Audit | 30th September |
| With International Transactions | 30th November |
ITR Forms for Sole Proprietorship
| Form | Applicability |
|---|---|
| ITR-3 | For proprietors earning business/professional income |
| ITR-4 Sugam | For those under presumptive taxation (Section 44AD, 44ADA) |
Documents Required for ITR Filing
PAN & Aadhaar Card
Bank statements
Books of accounts
Advance tax challans
TDS certificates (Form 16, 16A, 26AS)
Additional Tax Compliance for Sole Proprietorships
Applicable if the proprietor has a valid TAN and deducts TDS. Relevant forms include:
| Form | Purpose |
|---|---|
| 24Q | Salary payments |
| 26Q | Payments to residents |
| 27Q | Payments to non-residents |
| 26QB | Property transaction TDS |
GST Compliance
GST registration is mandatory if turnover exceeds ₹20 lakh. Post-registration, the following returns may apply:
GSTR-1 (monthly/quarterly)
GSTR-3B (summary return)
GSTR-9 (annual return)
GSTR-4 (composition scheme)
EPF Compliance
If the proprietorship employs 20+ individuals, EPF registration and monthly return filing is mandatory.
Books of Accounts & Audit Requirements
Books of accounts must be maintained if:
Turnover > ₹25 Lakhs
Income > ₹2.5 Lakhs in any of the 3 preceding years
Audit is Mandatory If:
Business turnover exceeds ₹5 crores
Professional receipts exceed ₹50 lakhs
Presumptive scheme opted, but income < deemed income
Audits must be conducted by a Chartered Accountant and reported via Form 3CB/3CD.
Legal & Tax Compliance Support by Nd Salva
At Nd Salva Advocates & Legal Consultants, we understand that managing a sole proprietorship involves more than running operations — it demands precise, timely legal and tax compliance. Our services ensure that your business remains compliant with evolving legislation while you stay focused on growth.
Our Services Include:
Income Tax Return Filing
Presumptive Tax Scheme advisory
GST Registration & Returns
TDS Deduction & Return Filing
EPF Compliance
Tax Audit Management
Legal Notices & Tax Scrutiny Response
Tax Planning for Proprietors
Let Nd Salva Handle Your Proprietorship Compliance
With years of legal and tax advisory experience, Nd Salva is your trusted partner in navigating the intricacies of sole proprietorship taxation in India.
📧 Contact us today to ensure your compliance is handled efficiently and professionally.
