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Call ExpertA partnership firm is a popular business structure commonly chosen by newly established businesses in India. It requires a minimum of two partners to be formed.
The formalization of a partnership firm is done through a partnership deed an important document that outlines the terms and conditions agreed upon by the partners. This deed serves as a guide for managing the firm’s operational and financial arrangements, ensuring clarity and mutual understanding among the partners.
The checklist for registering a sole proprietorship in India are:
The following documents required for Sole Proprietorship Registration:
After the registration of a sole proprietorship, the proprietor should make sure to follow the compliance requirements from time-to-time.
Here is a set of post-registration compliances for sole proprietorships in India:
As per the GST Act the proprietor has to file GST returns if the aggregate business turnover is more than ₹20 lakhs.
As per the GST Act the proprietor has to file GST returns if the aggregate business turnover is more than ₹20 lakhs.
The TDS returns have to be filed on time by the proprietor to avoid fines. Based on the purpose of deduction the following TDS return forms should be filed:Form 24Q for TDS on salaries
Form 27Q for TDS deducted for a non resident or foreign company
Form 26QB for TDS on payment for transfer of immovable properties
Form 26Q for TDS in any other case
If the sole proprietor has a turnover or conducts business exceeding ₹1 crore in a financial year it is mandatory to have a tax audit before tax filing. Vakilsearch has a team of experienced chartered accountants who can guide you when it comes to regulatory compliances , tax advantages, and return filing. Book a slot to consult today.
The tax rate for sole proprietorships is the same as that of the owner prior to the establishment of the business. Instead of filing a separate business tax return, as a corporation would, they disclose their income and costs on their personal income tax taxes. Here is a complete outline:
A sole proprietorship is often taxed on its net income. This is the total revenue earned after deducting all the allowable deductions. This income is directly reported by the owner on their personal income tax return. If the owner is a single person working, then self-employment tax should be filed.
The cost of registering a sole proprietorship starts from ₹699, covering the basic registration process. Additional fees may apply based on location, legal requirements, and any extra services selected. For a detailed cost estimate tailored to your needs, please consult with our registration experts.