Proprietorship Business
ITR Filing for Proprietorship – Classic Partners LLP
Simplified Proprietorship Tax Filing in Mumbai
A proprietorship, or sole proprietorship, is the simplest form of business ownership where the owner and the business are considered the same entity. The business income is treated as the individual’s personal income, making ITR filing a crucial compliance requirement. At Classic Partners LLP, we provide expert guidance and hassle-free ITR filing for proprietorship businesses in Mumbai, ensuring accuracy, compliance, and maximum tax savings.
Why ITR Filing is Important for Proprietorships
- Legal Compliance – Filing ITR is mandatory under the Income Tax Act. Non-filing attracts penalties, interest, and even prosecution.
- Proof for Loans & Credit – Banks/NBFCs require ITR for loans, overdraft facilities, and credit evaluation.
- Tax Planning & Savings – Helps claim deductions and optimize tax outgo with expert CA strategies.
- Government Tenders – Many tenders require past ITRs as proof of financial credibility.
- Carry Forward Losses – On-time filing allows business losses to be set off in future years.
- Build Financial History – Regular ITR filing strengthens credibility for partnerships, investors, and expansion.
Which ITR Form to Use?
ITR-3 – For proprietors with detailed accounts
Profit & Loss account and Balance Sheet required
Suitable for medium/large businesses not under presumptive taxation
ITR-4 (Sugam) – For presumptive taxpayers
For turnover up to ₹2 Cr (business) or ₹50 Lakh (profession)
Opting under Sections 44AD, 44ADA, or 44AE
No need to maintain detailed books of accounts
Classic Partners LLP helps select the correct form based on turnover, income type, and compliance needs.
Documents Required
PAN & Aadhaar of proprietor
Profit & Loss statement & Balance Sheet
Bank statements for the year
TDS certificates (Form 16A, 16C)
Details of loans, advances, and capital gains (if any)
Investment proofs (80C, 80D, 80G, etc.)
Previous year’s ITR & acknowledgment
Step-by-Step Proprietorship ITR Filing Process
Document Collection – Gather financials, bank statements, and tax proofs.
Tax Computation – Reconcile turnover, expenses, deductions, and TDS with Form 26AS.
Form Selection – Identify correct ITR (3 or 4) based on eligibility.
Return Preparation – Draft computation sheet and populate ITR schedules.
Review & Approval – Share draft with proprietor for verification.
E-Filing & Verification – File ITR online and complete e-verification (OTP/DSC/EVC).
Acknowledgment Delivery – Provide ITR-V, computation, and tax summary
Common Tax Deductions & Benefits for Proprietors
Business Expenses – Rent, utilities, salaries, telephone, internet, professional fees.
Depreciation – On assets like laptops, machinery, and office equipment.
Home Office Expenses – Proportionate rent and utilities if used for business.
Interest on Business Loans – Fully deductible if used for business.
Bad Debts & Travel Costs – Business-related losses and travel can be claimed.
Tips for Maximizing Tax Savings
Keep digital records of all receipts and invoices.
Time asset purchases for optimum depreciation benefits.
Employ family members (where eligible) to distribute income.
Invest strategically under Sections 80C, 80D, 80G.
Work with Classic Partners LLP CAs to file accurately and optimize benefits.
Our Commitment
At Classic Partners LLP, we ensure your proprietorship ITR filing is compliant, accurate, and optimized for savings. From computation to filing and advisory, we make the process seamless while helping you plan taxes effectively.
