Income Tax
Income Tax Filing for Businesses: Everything You Need to Know
Tax Precision
Jun 08, 2026
6 min read
Income tax filing for businesses in India is a complex but mandatory process. Whether you run a sole proprietorship, partnership, LLP, or private limited company, each structure has specific filing requirements, applicable tax rates, and deduction opportunities. This guide covers everything you need to know.
Key Takeaways
Companies and LLPs must file ITR-6 and ITR-5 respectively
Tax audit is mandatory if turnover exceeds ₹1 crore (₹10 crores for digital transactions)
Advance tax must be paid in four instalments during the year
Section 44AD allows presumptive taxation for small businesses
Deductions under Chapter VI-A can significantly reduce tax liability
Which ITR Form Applies to Your Business
Sole proprietors file ITR-3 or ITR-4 (Sugam for presumptive income). Partnership firms and LLPs use ITR-5. Private and public limited companies file ITR-6. Trusts and NGOs use ITR-7. Filing the wrong form is a common error that can lead to defective return notices.
Tax Rates for Businesses
Domestic companies pay 22% base tax (plus surcharge and cess, effective ~25.17%) under the new tax regime. Startups and new manufacturing companies may opt for 15% or 22% rates respectively. Firms and LLPs are taxed at 30%. Surcharge applies when total income exceeds ₹1 crore.
Key Deductions Available
Businesses can claim deductions for rent, salaries, depreciation on assets, interest on business loans, professional fees, repairs and maintenance, and marketing expenses. Section 80JJAA provides deductions for new employee recruitment. Export businesses can benefit from Section 10AA (SEZ units) or Section 80HHC.
Tax Audit Requirements
A tax audit under Section 44AB is mandatory if your business turnover exceeds ₹1 crore (or ₹10 crores if 95% of transactions are digital). A Chartered Accountant must conduct the audit and submit Form 3CA/3CB along with Form 3CD. The due date for tax-audited assessees is 31st October.
Advance Tax Payment
Businesses with tax liability exceeding ₹10,000 must pay advance tax in four instalments: 15% by 15th June, 45% by 15th September, 75% by 15th December, and 100% by 15th March. Non-payment or short payment attracts interest under Sections 234B and 234C.
Conclusion
Business income tax compliance requires year-round attention, not just at filing time. Proper bookkeeping, timely advance tax payments, and professional guidance can save significant tax and avoid penalties. Taxer's tax professionals are equipped to handle your complete annual tax compliance seamlessly.
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