Partnership Firm Tax Return Filing
Partnership firms in India can be divided into two categories namely, registered partnership or unregistered partnership. Registered partnership firms are those firms having a registration certificate from the Registrar of Firms. All other partnerships that do not have a registration certificate would be classified as an unregistered partnership firm. Under Income Tax Act, a partnership firm is defined as "Persons who have entered into a partnership with one another are called individually "partners" and collectively "a firm", and the name under which their business is carried on is called the "firm name".
Partnership Tax Rate
Partnership firms are liable to pay income tax at the rate of 30% of total income. In addition to the income tax, a partnership firm is liable to pay income tax surcharge on the amount of income tax at the rate of 12%, when total income exceeds Rs.1 crores. In addition to the income tax and surcharge, a partnership firm must pay education cess and secondary higher education cess.
Education Cess is applicable on the amount of income tax and the applicable surcharge at the rate of 2%. Secondary and higher education cess is applicable on the amount of income tax and the applicable surcharge at the rate of 1%.
Alternate Minimum Tax
Similar to a private limited company or LLP, partnership firms are also required to pay alternate minimum tax at the rate of 18.5% of "adjusted total income". Alternate minimum tax would be increased by the applicable surcharge, education cess and secondary and higher education cess.
Partnership Firm Tax Return Filing
Partnership firms are required to file income tax return in form ITR 5. Like all other income tax forms, ITR 5 is an attachment less form and there is no requirement for submitting any documents or statements along with a partnership firm tax return. However, the taxpayer must save all records pertaining to the business and produce the same before tax authorities when requested.
Procedure For Filing Partnership Firm Tax Return
Income tax return of a partnership firm can be filed online through the income tax website or manually. If the income tax return is filed online, then a class 2 digital signature will be required for the Partner of the firm. Also, online income tax return filing is mandatory for partnership firms required to obtain an audit.
Partnership Firm Tax Return Due Date
The income tax return due date for most partnership firms is July 31 of the assessment year. Partnership firms required to get its accounts audited under the income tax Act must file the income tax return before the September 30th deadline.
