Introduction
LLP INCOME TAX RETURN (ITR)
DOCUMENTS REQUIRED FOR TAX RETURN FILING OF LLP
- LLP PAN, Address Details, Date of registration.
- Partner PAN, Aadhar & Address, Contact details.
- Purchase & Sales Book.
- General Ledger.
- Cash Book.
- Bank Book.
- Expenses Invoices, bills, Vouchers, etc.
DUE DATE OF LLP INCOME TAX RETURN FILING.
- ITR filing for the LLP – since April 1st.
- Last Date – 31st July.
- Last Date for Tax audit – 30th September.
- The applicable LLP it form – ITR-5.
- Filing of the belated ITR – Until the end of the assessment year.
PROCEDURE TO FILE INCOME TAX RETURN OF LLP.
- Register LLP on Income Tax Site.
- Prepare LLP Balance Sheet.
- Prepare Profit & Loss statement.
- Prepare income tax computation sheet of LLP.
- Pay LLP Income Tax online.
- Download Income Tax Form 5.
- Fill LLP & Financial information.
- Upload ITR With DSC of Partner.
- E Verify Income Tax Return.
HOW TO FILE LLP INCOME TAX RETURN
Step 1: Statement of Accounts
Before initiating the tax procedure, you should prepare the statement of accounts for the LLP. The preparation of the statement of accounts is the first step in drawing up the LLP's financial statements. You should be alert and abide by the provisions of the 1961 Income Tax Act.
Step 2: The Income Tax calculations
The most significant step in filing an itr for LLP is the computation of taxable income. While engaged in tax computing, for your LLP, the accuracy of financial statements is essential. The income tax regulations handle these expenses differently because if the expenses do not meet the statute, they are effectively concluded as an expense and therefore the taxable income rises.
Step 3: Expense disallowance under the ITR Act
The income tax department also acknowledges a particular payment as the LLP's cost if it follows the rules. Here's an overview of common tax disallowances and the reasons for LLP's ITR.
- The preliminary expenses are allowed only up to 1% of capital employed in the LLP.
- All payouts are disallowed as expenses require TDS not to be deducted.
- Penalty on delayed tax payments like TDS, GST, etc. is not allowed.
- Partners’ salary is limited to 90% of the profit, up to Rs. 3 Lakh or 60% after that.
- Please check the LLP agreement for the provision of partner remuneration.
Step 4: Income Tax Payment of LLP
The LLP Income Tax self-assessment can be charged electronically via the Income Tax Portal. Choose Challan Number - 280 on the tax payment page and follow the instructions on the computer. Income Tax can be charged by nearly all the banks through internet banking. The income tax for the LLP can also be charged through some of the banks' debit cards as described in the income tax portal.
Step 5: Creating the profile
Create a profile for filing Income tax returns of the LLP on the Income Tax Portal. Due to the electronic filing of the LLP Income Tax Return, the LLP is expected to file for the first time on the income tax export portal. Mobile and email OTP is necessary to register the LLP. One designated partner must be listed as an authorized signatory on the income tax portal.
Step 6: Filing Income Tax
The LLP's income tax return can be filed only after the self-assessment tax has been paid. The LLP ITR can be submitted with the use of any approved partner's digital signature. The LLP ITR, however, can also be checked via the partner's Aadhaar-based OTP which is registered on the income tax portal.
BENEFITS OF FILING INCOME TAX RETURN OF AN LLP: -
Get a loan easily:-
Filing an income tax return helps a partnership firm or business in getting loans easily from different financial institutions. When a business asks for high-value loans, such as a business long-term loan or a working capital loan, most banks and NBFCs ask for an ITR receipt from the business for the recent three years. ITR is considered by lenders as the most reliable document presenting the company’s revenue and turnover.
Net worth:-
The ITR submitted to the government defines the company’s financial position. Filing income tax return compliance for LLP helps you in tracking the net worth of the companies by displaying business turnover, assets, and revenue. The record of ITR filing shows the person financial capacity and broadens their capital base.
Carry forward the losses:-
The business can carry forward the losses from the income of the previous year by timely filing income tax returns and LLP annual compliance. Most firms lose money during their first few years of operation. If the ITR is submitted, the business loss or capital losses may be carried forward for a maximum of eight years. However, if an ITR is not submitted, the taxpayer is deprived of this benefit.
ITR FORM FOR LLP
