File your sole proprietorship income tax return accurately with expert assistance, ensuring compliance, correct profit reporting, and maximum tax efficiency—without the complexity of business taxation.
A sole proprietorship is one of the simplest business structures, but it still requires careful compliance with the Income Tax Act, 1961. The submission of tax returns for an owner company is necessary to declare your commercial income, claim deduction and avoid penalties from the income tax department.
Who Needs to File ITR for Proprietorship?
According to the Income Tax Act, owners under the age of 60 will have to submit a tax return if their total income is more than 3 lakhs. For owners of the age of 60 and 80 (senior citizens), the total income submission is mandatory when more than ₹3 lakhs.
You must file if:
Annual turnover crosses the threshold limit under the Income Tax Act 1961.
You have income from business or house property, capital gains, or interest income.
You wish to claim deductions under Chapter VI-A.
You are covered under presumptive taxation scheme provisions.
If the total income is less than the basic discount and there is no need under other laws, you may not need to submit. However, the submission is still recommended to continue further damage, demand reimbursement and maintain a pure record with the income tax department.
Indian Partnership Act, 1932 – governs formation and functioning of partnership firms
Indian Contract Act, 1872 – defines eligibility and capacity of partners
Registration is handled by the Registrar of Firms at the state level
Which ITR Form Should You Choose?
Owners submit ITR -3 when they have income from business or occupation, which requires maintaining books and calculating revenues for accounts in accordance with the general provisions of the Income Tax Act. ITR-3 is also used when revenues include capital gains, home property or other sources beyond other sources.
Proprietors file ITR-4 under Section 44AD/44AE if they opt for the presumptive taxation scheme. This allows declaring income at a fixed percentage of gross receipts (8% or 6% for digital transactions) without detailed bookkeeping, subject to certain conditions.
The range between ITR-3 vs ITR-4 depends on the turnover, business type and compliance preference. Choosing the right form ensures the calculation by correcting, avoiding the income tax department smooth treatment and notice or penalties
File Your Proprietorship ITR the Right Way
Get your deed drafted, verified, and registered with expert support.
Essential Documents for Registration
Proper documentation ensures smooth registration and avoids rejection or delays by the Registrar of Firms.
Personal & Identity Documents
PAN card
Aadhaar card
Business & Income Documents
Profit & loss statement
Balance sheet (if applicable)
Presumptive income details (if opted)
Banking & Financial Records
Bank statements
Loan interest certificates
Tax & Compliance Documents
GST returns (if registered)
Advance tax / self-assessment tax details
Investment & Deduction Proofs
LIC, PPF, ELSS, NPS receipts
Health insurance premium receipts
