Business Tax Filing

Business tax filing involves reporting income from business or profession and paying applicable taxes. All businesses including proprietorships, partnerships, LLPs, and companies must file business tax returns. The form and due date depend on the entity type and whether tax audit is applicable.

For businesses not requiring audit, the due date is July 31. For businesses requiring tax audit (turnover exceeding ₹1 crore for business or ₹50 lakh for professionals), the due date is October 31. Companies must file by October 31 (November 30 for transfer pricing cases).

Tax audit under Section 44AB is required if business turnover exceeds ₹1 crore (₹10 crore if cash transactions are ≤5%) or professional receipts exceed ₹50 lakh. It involves a chartered accountant examining books of accounts and issuing an audit report in Form 3CA/3CB and 3CD.

Businesses must maintain books of account including cash book, journal, ledger, copies of invoices, bank statements, expense vouchers, asset registers, stock records, and payroll records. Digital records are acceptable if they meet authenticity and integrity requirements.

Business income is calculated as gross receipts minus allowable business expenses. Allowable expenses include rent, salaries, interest on business loans, depreciation, repairs, insurance, and other expenses wholly and exclusively for business purposes. Personal expenses are not deductible.

Advance tax is payment of tax in installments during the financial year. Businesses with estimated tax liability exceeding ₹10,000 must pay advance tax in four installments: 15% by June 15, 45% by September 15, 75% by December 15, and 100% by March 15. Failure attracts interest under Sections 234B and 234C.

Yes, business losses can be carried forward for 8 assessment years and set off against future business profits. However, returns must be filed within the due date to carry forward losses. Speculation losses can only be set off against speculation profits.

Under Section 44AD, eligible businesses with turnover up to ₹2 crore can declare income at 8% (6% for digital receipts) of turnover without maintaining detailed books. They cannot claim deductions for expenses but are exempt from tax audit if declaring income at presumptive rates.

Businesses can claim TDS credits by reporting TDS certificates (Form 16A, 26AS) in their tax returns. The TDS amount is deducted from total tax liability. Mismatches between claimed TDS and Form 26AS must be reconciled before filing to avoid disallowance.

Penalties include late filing fees up to ₹10,000, interest on tax due at 1% per month (Section 234A), interest for non/short payment of advance tax, penalty for underreporting income (Section 270A), and prosecution for willful evasion. Non-compliance also affects loan eligibility and government tenders.