Partnership Annual Compliance
A Partnership Firm is a popular form of business constitution for businesses that are owned, managed and controlled by an Association of People for profit. Partnerships firms are relatively easy to start and is prevalent amongst small and medium sized businesses in the unorganized sectors. Partnership Firms are required to file their income tax return each year. Under the Income Tax Act, the Partnership firm is treated as an entity separate from the Partners of the firm. Both registered partnership firms and unregistered partnership firms are required to file their income tax return. As per Income Tax Act, a partnership can be assessed as a Partnership Firm or an Association of Persons (AOP). Only those partnerships that have a written partnership deed can be assessed as a Partnership Firm. It is more beneficial to be assessed as a Partnership Firm than as an Association of Persons as certain deductions allowed for Partnerships are not allowed for Association of Persons and the tax liability could be higher. This offer would protect your startup from unnecessary taxes, penalties by keeping your business in perfect compliance as you grow.
Documents Required:- (All copies of documents should be self-attested by the customer)
To file the income tax return of a partnership firm, book of accounts must be maintained and tax audit may have to be obtained based on various criterias, Invoices and Purchase Orders, all the Bank Statements.
The Partnership should ensure Process
All its invoices and official correspondence bear the name of the registered Partnership firm. Keep accounts and other records which will sufficiently explain the transactions and financial position for 5 consecutive years.
File an annual income tax return to show all income earned by the partnership and deductions claimed for expenses incurred in carrying on the partnership business
Monthly, Quarterly TDS, GST returns Excise Compliance to be completed within schedule time frame . The income tax return of a Partnership firm must be accompanies by the financial statements of the Partnership firm and the Partnership deed.
In certain cases, a tax audit may have to be conducted by a Chartered Accountant prior to filing the tax return of the Partnership firm.