Income tax return for Partnership firm

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    ITR for Partnership firm

    As mandated by Law, every partnership firm, whether registered or non-registered under the Registrar of Company, has to pay Income Tax through ITR-V. The tax slab for a Partnership firm is 30% on the aggregate profit in a financial year. Apart from this tax, a separate surcharge on Income tax at the rate of 12% is levied if the total income exceeds 1 crore. Along with income tax and surcharge on income tax, Partnership firms are mandated to pay an additional 2% Secondary education Cess and 1% higher secondary education cess.

    Deductions allowed for Partnership firm while filing ITR

    There are various deductions that are allowed for the calculation of Income-tax for a partnership firm. Let’s take a look: Note: The permissible limit for the remuneration paid to the partnership is INR 1.5 lakh or 90% of the book profit, whichever is more.
    Remuneration paid to the working partner in accordance with the partnership deed
    Interest paid to the partners in accordance with the Partnership deed

    Process of filing ITR for a Partnership form

    Partnership firms are required to file their ITR through ITR 5 using DSC(Digital Signature Certificate). Partnership firms filing ITR using ITR 5 do not need to submit any supportive documents with their return.
    Partnership firms can file their ITR online using class 2 digital signature certificate (DSC). It should be noted that any partnership firm under audit has to file their ITR online.
    Partnership firms can file their return offline by submitting a duly signed copy of ITR-V to the registered address of the Income Tax Department.

    Audit for a Partnership firm

    Partnership firms are mandated to carry out the audit under the following circumstances:
    1. If the aggregate income is above 50 lakh For a professional firm
    2. If the aggregate income is above 1 crore For a business firm

    The due date for filing ITR of a Partnership firm

    All partnership firm is required to file their ITR before 31st July. For e.g. for the F.Y 2019-2020(A.Y. 2020-2021), the due date will be 31st July. The firms for which audit is required have to file their ITR before 31st September. For e.g. for the F.Y 2019-2020(A.Y 2020-2021), the due date for filing the ITR will be 31st September.


    Frequently asked questions

    It is the minimum TaxTax that a partnership firm has to pay at the rate of 18.5 % of “Adjusted Total Income.”
    ITR-5 is required to file an Income tax return for a partnership firm
    Yes, ITR for a partnership firm can be filed using Class-2 digital signature.
    If you are not using the OTP verification method, you will have to send a copy of the physical ITR to CPC Bengaluru for verification.

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