Income Tax Filing

Every partnership firm must file income tax returns annually, regardless of profit or loss.

• File ITR Form 5 before the due date.
  
• Audit required if turnover exceeds ₹1 crore (or ₹50 lakhs for professionals).
  
• Tax at 30% on net profit, plus surcharge and cess.
  
• Must include details of partners’ remuneration and interest.
  
• Applicable even for unregistered firms.
  

Tax Audit (if applicable)

A tax audit is mandatory when the firm crosses specified turnover thresholds under the Income Tax Act.

• Turnover above ₹1 crore (or ₹10 crores with digital transactions) requires the audit.
  
• Must be done by a Chartered Accountant.
  
• Form 3CA/3CB with 3CD needs to be filed.
  
• Ensures compliance with tax rules and expense legitimacy.
  
• Audit report to be filed before September 30 of the assessment year.
  

TDS (Tax Deducted at Source) Compliance

If a partnership firm deducts TDS, it must deposit and report it regularly.

• Apply for TAN (Tax Dedication and Collection Account Number).
  
• Deduct TDS on salary, contractor payments, rent, etc.
  
• Deposit TDS by the 7th of the next month.
  
• File quarterly TDS returns (Form 24Q/26Q).
  
• Issue TDS certificates (Form 16/16A) to payees.
  

GST Compliance (if registered)

Partnership firms registered under GST must fulfill monthly/quarterly, and annual filing obligations.

• File GSTR-1 (sales) and GSTR-3B (summary return).
  
• Annual GST return (GSTR-9) is mandatory if turnover exceeds ₹2 crore.
  
• Maintain detailed invoice-wise data.
  
• Reconcile ITC (Input Tax Credit) monthly.
  
• Late filing attracts penalties and interest.
  

Maintenance of Books & Financial Statements

Proper records and books are essential for transparency, audit, and tax compliance.

• Maintain cash book, ledger, sales, purchase registers, etc.
  
• Prepare balance sheet and profit & loss account annually.
  
• Must be signed by all partners.
  
• Supports tax computation and financial analysis.
  

Required during tax audit or assessment.