Partnership Tax Return Filing
All partnership firm are required file the income tax return, irrespective of amount of
income or loss. Partnership firms are taxed as a separate legal entity under the Income Tax Act. Hence,
the income tax rate applicable for partnership firms is similar to LLPs and Companies registered in
India.
Requirement for Filing Partnership Firm Tax Return
All partnership firms are required to file income tax return each year, irrespective of income or loss.
If there was no business activity, then a NIL income tax return must be filed before the due date for a
partnership firm.
Income Tax Rate for Partnership Firms
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 Health & Education cess. Health & Education Cess is applicable on the amount
of income tax and the applicable surcharge at the rate of 4%.
Minimum Alternate Tax for Partnership Firms
Similar to income tax applicable for a company, partnership firms are subject to minimum alternate tax.
A minimum alternate tax of 18.5% of adjusted total income is applicable. Hence, income tax payable by a
partnership firm having profits cannot be less than 18.5 per cent (increased by income tax surcharge,
education cess and secondary and higher education cess).
Tax Audit for Partnership Firm
Partnership firms carrying on business with a total sales of over Rs.1 crore are required to obtain tax
audit. Similarly, partnership firms, carrying on a profession wherein gross receipts in profession
exceed Rs.50 lakhs in the previous year are required to obtain tax audit. In addition, there are other
conditions applicable which could make an audit mandatory for a partnership firm.
Due Date for Filing Partnership Firm Tax Return
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.
Tax Return for Partnership Firms
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.