Proprietorship Compliance
Ongoing statutory and tax compliance support for sole proprietorship businesses.
What's covered
- A sole proprietorship has no separate legal or tax identity from its owner — all business income is assessed in the individual owner's income-tax return at the applicable slab rates. There is no distinct proprietorship ITR; the owner files an ITR form appropriate for business income (ITR-3 or ITR-4, depending on the chosen tax scheme).
- Proprietors with business turnover below the prescribed limit may opt for presumptive taxation under section 44AD (business) or section 44ADA (professionals), which simplifies record-keeping and eliminates the need for a full tax audit. Proprietors above the threshold must maintain accounts and undergo a tax audit under section 44AB.
- Where the proprietorship is registered under GST, the owner files periodic returns — GSTR-1, GSTR-3B, and the annual GSTR-9 — just as any other GST-registered entity. TDS obligations under the Income-tax Act apply wherever the proprietorship makes payments that attract TDS.
- Key operational registrations — such as Udyam (MSME), GST registration, and local Shops and Establishment — require periodic renewal or compliance and must be tracked alongside the annual tax cycle.
How we work
- 01
April–September: advance tax and GST filings
Pay advance tax instalments by 15 June and 15 September if the owner's estimated tax liability exceeds the threshold. File monthly or quarterly GSTR-1 and GSTR-3B where GST-registered; deposit TDS by the 7th of each following month.
- 02
October–December: accounts closure and tax audit (if applicable)
If the proprietor does not opt for the presumptive scheme and turnover exceeds the section 44AB threshold, complete the tax audit and file Form 3CB with Form 3CD within the due date. Pay the Q3 advance tax instalment by 15 December.
- 03
January–March: year-close and final advance tax
Finalise books of account, reconcile business receipts and expenses, and confirm all TDS deductions and deposits are complete. Pay the fourth advance tax instalment by 15 March.
- 04
July–October: file income-tax return and annual GST return
File the owner's individual income-tax return (ITR-3 under normal accounting or ITR-4 under the presumptive scheme) by the statutory due date. File GSTR-9 for the completed financial year.
Documents required
- Business bank account statements and cash-book
- Sales and purchase records (invoices, bills) for the financial year
- GST returns (GSTR-1, GSTR-3B, GSTR-9) and GST portal credentials
- TDS challans and Form 26Q quarterly returns where applicable
- Tax audit report — Form 3CB and Form 3CD — where turnover exceeds section 44AB threshold
Applicable laws & forms
- Income-tax Act 1961, sections 44AA, 44AB, 44AD, 44ADA, 139 — book-keeping obligations, tax audit applicability, presumptive taxation, and ITR filing
- Central Goods and Services Tax Act 2017 — GST registration and return obligations for GST-registered proprietorships
Frequently asked questions
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