Business & Professional Tax Filing (ITR-3 / ITR-4)
Tax return filing for Proprietors, Traders, Doctors, Lawyers, Engineers, Consultants, and Business Entities. Preparation of P&L Statement, Balance Sheet, Presumptive Tax computation (Sec 44AD/44ADA), and ITR-3/ITR-4 filing.
1. Presumptive Taxation Framework (Sec 44AD / 44ADA)
The Income Tax Act provides simplified presumptive tax schemes to relieve small business owners and professionals from maintaining detailed audit account books:
Section 44AD (Small Businesses & Traders)
Applicable to resident individuals/firms with turnover up to ₹2 Crores (₹3 Crores if digital receipts ≥ 95%). Presumed profit is calculated at 6% for digital turnover and 8% for cash turnover.
Section 44ADA (Specified Professionals)
Applicable to Doctors, Lawyers, Chartered Accountants, Engineers, Architects, and IT Consultants with gross receipts up to ₹50 Lakhs (₹75 Lakhs if digital receipts ≥ 95%). Presumed profit is calculated at 50% of gross receipts.
2. Applicable Tax Return Forms (ITR-3 vs ITR-4)
ITR-4 (Sugam)
For resident individuals, HUFs, and firms opting for Presumptive Tax scheme under Section 44AD, 44ADA, or 44AE.
ITR-3
For individuals and HUFs having income from business or profession who maintain books of accounts, claim actual depreciation, or undergo Tax Audit u/s 44AB.
3. Mandatory Document Checklist
Documents Required for Business Filing
- PAN Card & Aadhaar Card of Proprietor
- Bank Account Statements (Current & Savings)
- GST Annual Returns (GSTR-9 / GSTR-3B)
- Sales & Purchase Registers / Invoices
- AIS / TIS Statement from Income Tax Portal
- Details of Opening & Closing Stock
4. Step-by-Step Business Tax Filing Timeline
Step 1: Turnover & GST Reconciliation
Reconciling total annual business turnover reported in GST filings with bank statements and AIS data.
Step 2: P&L Statement & Balance Sheet Preparation
Drafting statutory Financial Statements (Profit & Loss Account and Balance Sheet) for loan and credit rating purposes.
Step 3: Portal E-Filing & Verification
Filing ITR-3/ITR-4 on the Income Tax Portal and executing Aadhaar OTP e-verification.
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