Business Tax Filing

What is a Business Tax Return?

A business tax return is basically an income tax return. The return is a statement of income and expenditure of the business. Also, any tax to be paid on the profits made by you is declared in this return. The return also contains details of the assets and liabilities held by the business. Items like fixed assets, debtors and creditors of the business, loans taken and loans given are declared here.

Types of Business Tax Return Filing

The different types of business tax return filing is named on the basis of business entities that are entitled to file these returns, i.e. different structure of businesses and their names accordingly.

Sole proprietorship tax return filing: Under this type, a single owner operating the proprietorship firm has to file an income tax return annually. The firm is considered the same as the proprietor, and therefore the tax return filing procedures, are similar to that of the proprietor’s individual income tax return filing.

Partnership firm tax return filing: Partnership firms are formed by two or more individuals to run a business. Hence, unlike Sole proprietorships, partnership firms under the Income Tax Act are taxed as individual legal entities. They are required to file income tax returns, irrespective of gain or loss.