Filing annual tax returns is an important exercise for all businesses. While preparing and filing tax returns for a business have traditionally been tedious and time-consuming, e-filing has made the process much simpler.
Income tax is one of the few direct taxes levied on businesses and individuals by the government of India. Regular filing of income tax returns helps in building the credibility of your business which in turn can help you in securing various business loans and availing of government schemes to scale your business.
Is Filing Tax Return Compulsory?
Filing a tax return is compulsory in the following cases
- For Proprietorship Firm
If the total income of the proprietor exceeds the basic taxable limit under the prevailing tax slabs, then it is compulsory to file returns.
- For Firms, Companies, and Limited Liability Partnerships
Filing tax returns is compulsory irrespective of profit and loss. The returns need to be filed even if the company is non-operational.
Is Income Tax Audit Necessary?
A tax audit can only be done by a chartered accountant. However, a tax audit is mandatory only if
- The annual turnover of the business exceeds Rs 2 crore.
- The business has registered losses, and the company wants to carry forward the loss into the next financial year.
Steps to e-File Income Tax Returns
- Visit the new portal for filing tax returns.
- Log in to the portal using your PAN and password. New users need to undergo a one-time registration process to generate login credentials.
- View Form 26AS to check all the TDS deductions in the financial year for which you are filing the return. You can see the refundable amount, if any, under Form 26AS.
- Return to the dashboard and select “File Now” under “File Your Returns”.
- Select “Current Assessment Year”
- Select the online mode of filing and click “Start New Filing”
- Select “Individual” if you are the sole proprietor of your company. Select “Others” in case of a partnership or other form of ownership.
- Select ITR 4 from the drop-down list. If your business has an annual turnover exceeding ITR 3, then select ITR 3
- Follow the on-screen instructions to complete the e-filing.
- After submitting the ITR form online, you can also e-verify using your mobile number registered with your PAN and Aadhaar card.
The process of e-filing tax returns may appear a little overwhelming to those who are trying it out for the first time. However, once you are able to file the returns successfully, you will be more confident the next time.
You don’t have to be a financial wizard to figure out the details. Instead, you may be pleasantly surprised by the convenience and ease of e-filing.