Partnership firms are needed to continue compliance like LLPs and Companies incorporated in India. Partnership firm compliance incorporates filing of income tax return while corporate bodies like Company and LLP need both income tax return filing with the Income Tax Department and annual return filing with the Ministry of Corporate Affairs. Partnership firms that are having annual turnover of more than Rs.100 lakhs are also necessary to get a tax audit.
Besides basic compliance, partnership firms may also be needed to follow GST regulations, TDS regulations, VAT or CST regulations, ESI regulations, service tax regulations and others. The compliance of a business depends on the kind of industry, entity, state of incorporation, sales turnover and number of employees.
MAJOR COMPLIANCES OF PARTNERSHIP FIRMS
Accounts – Partnership firms needs to maintain accounts and make financial statements at the end of each financial year.
GST Filing – Under the GST rule, partnership firms having GST registration need to file monthly, quarterly and annual GST returns.
Income Tax Filing – Income tax filing should be filed by all partnership firms. Partnership firms having more than Rs.100 lakhs of annual turnover are needed to perform tax audit.
TDS Filing – Quarterly TDS returns should be filed by partnership firms having TAN and are needed to deduct tax at source according to TDS rules.
Tax Audit – An audit would be needed for a partnership firm if the total sales turnover is more than Rs.1 crore during the financial year. In case of a professional firm, audit would be necessary if total gross receipts exceed Rs.50 lakhs throughout the financial year under assessment.
Income tax return of a partnership firm that doesn’t need audit is due on 31st July. If the income tax return of a partnership firm is to be audited according to Income Tax Act, then the return would be unpaid on 30th September.
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