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ITR Filing for Proprietors - Overview

Running a business as a sole proprietor in India? Filing your Income Tax Return (ITR) isn't just mandatory—it's essential to stay compliant, claim deductions, and build a strong financial record for your business.

At FirstStartup, we simplify ITR filing for proprietors with expert assistance, accurate compliance, and timely submission.

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Who is a Proprietor?

A proprietor is an individual who owns and operates a business under their name without forming a separate legal entity. Since a proprietorship isn't distinct from the owner, the business income is treated as the individual's personal income.

Who Should File ITR as a Proprietor?
Total income exceeds ₹2.5 lakhs (₹3 lakhs for senior citizens)
Business is registered under GST or any other license
You're applying for a loan or tender
You're claiming a refund
You want to carry forward losses

Applicable ITR Forms

ITR-3: If you maintain books of accounts and are not under the Presumptive Scheme.
ITR-4 (Sugam): If you opt for the Presumptive Taxation Scheme under Section 44AD/44ADA and your turnover is below ₹2 crore.
What is Presumptive Taxation?

Presumptive taxation allows you to declare income at a fixed rate of your turnover without maintaining detailed books.

For business (Section 44AD): 6% or 8% of turnover
For professionals (Section 44ADA): 50% of gross receipts

Required Documents

PAN & Aadhaar Card
Bank statements
Purchase & sales bills
Expense invoices
GST returns (if registered)
Previous year's ITR
Investment proofs (if any)
Books of accounts (if not under presumptive taxation)

Tax Audit Requirement

If your turnover exceeds ₹1 crore (or ₹10 crore with 95% digital transactions), a tax audit is mandatory under Section 44AB.

How FirstStartup Helps
Determine the right ITR form and regime
Apply deductions and reduce tax liability
File accurately and on time
Assist with tax audit and books preparation
Track refund status and handle any notice

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