In India, "business tax" isn't a single tax but rather a collective term for various taxes that businesses are liable to pay. The specific taxes and the filing/registration processes depend heavily on the type of business entity (Sole Proprietorship, Partnership, LLP, Private Limited Company, etc.), its turnover, and the nature of its activities.

Here's a breakdown of the main business taxes, their registration, and filing processes:

 

I. Income Tax for Businesses

This is a direct tax levied on the profits and gains of a business.

1. Registration Process (PAN is the primary registration):

• PAN (Permanent Account Number): Every business entity, regardless of its structure, must have a PAN.

  • Sole Proprietorship: The proprietor's individual PAN serves as the business PAN.

  • Partnership Firm/LLP/Company: A separate PAN is required for the entity itself. The application is made using Form 49A to NSDL or UTIITSL.

    • Online Application: Visit the NSDL/UTIITSL website, fill Form 49A, make online payment, and send the acknowledgment along with supporting documents by post.

    • Offline Application: Fill Form 49A and submit it to a TIN-FC (TIN Facilitation Centre).

• e-Filing Portal Registration: Once the PAN is obtained, the business (or its authorized representative) must register on the Income Tax e-filing portal (incometax.gov.in).

  • For Individuals/HUFs (Sole Proprietorship): Register as "Taxpayer" using the proprietor's PAN.

  • For Companies/LLPs/Firms: Register as "Company" or "Tax Deductor & Collector" (if applicable) using the entity's PAN. This often requires the DSC (Digital Signature Certificate) of the Principal Contact/Authorized Signatory and their PAN to be already registered on the portal.

 

2. Filing Process (Income Tax Return - ITR)

The specific ITR form depends on the business structure:

• Sole Proprietorship:

  • ITR-3: If the proprietor has income from a business or profession (requires maintaining books of accounts or audit).

  • ITR-4 (Sugam): If opting for the presumptive taxation scheme (turnover up to ₹2 crore for businesses, up to ₹50 lakh for professionals) and fulfilling other conditions.

  • Due Date: Generally July 31st for individuals/HUFs (if not subject to audit). If subject to audit, October 31st.

• Partnership Firm/Limited Liability Partnership (LLP):

  • ITR-5: All partnership firms and LLPs must file ITR-5, regardless of profit or loss.

  • Due Date: October 31st (if not subject to transfer pricing audit).

• Company (Private Limited, One Person Company, Public Limited, Section 8 Company):

  • ITR-6: All companies, except those claiming exemption under Section 11 (income from property held for charitable/religious purposes), must file ITR-6.

  • Due Date: October 31st (if not subject to transfer pricing audit).

• Process:

  1. Gather Financial Records: Maintain proper books of accounts (income, expenses, balance sheet, profit & loss statement).

  2. Calculate Income & Tax: Determine gross income, allowable deductions, depreciation, and calculate net taxable income. Then, compute the tax liability based on applicable rates (slab rates for individuals/HUFs; flat rates for firms/companies).

  3. Advance Tax: If the estimated tax liability for the year exceeds ₹10,000, businesses must pay advance tax in quarterly installments.

  4. TDS/TCS Reconciliation: Reconcile TDS/TCS as per Form 26AS/AIS/TIS with your books.

  5. Online Filing:

     • Log in to the e-filing portal.

     • Select the relevant ITR form and assessment year.

     • Fill in details online (or upload XML generated from offline utility).

     • Verify the return using Aadhaar OTP, Net Banking EVC, DSC (mandatory for companies, LLPs, and audited entities), etc.

  6. Maintain Records: Keep all financial records and supporting documents for future reference or scrutiny.

 

II. Goods and Services Tax (GST)

GST is an indirect tax levied on the supply of goods and services.

1. Registration Process:

• Threshold Limit:

  • Goods: Businesses supplying goods with an aggregate annual turnover exceeding ₹40 lakh (₹20 lakh for special category states) must register for GST.

  • Services: Businesses providing services with an aggregate annual turnover exceeding ₹20 lakh (₹10 lakh for special category states) must register for GST.

  • Mandatory Registration (Irrespective of Turnover):

    • Inter-state supply of goods.

    • E-commerce operators.

    • Casual taxable persons.

    • Non-resident taxable persons.

    • Input Service Distributors (ISD).

    • Persons required to deduct TDS under GST.

    • Agent of a supplier.

    • Reverse Charge Mechanism (RCM) applicability.

• Process (Online on GST Portal - gst.gov.in):

  1. Part A of Form GST REG-01:

     • Visit the GST portal and select "New Registration."

     • Fill in basic details: PAN of the business/proprietor, legal name, state/district, mobile number, email ID.

     • Verify with OTPs sent to mobile and email.

     • A Temporary Reference Number (TRN) is generated.

  2. Part B of Form GST REG-01:

     • Log in with the TRN.

     • Fill in detailed business information: Constitution of business, principal place of business, additional places (if any), HSN/SAC codes of goods/services, bank account details (optional initially, but needed for refunds/payments later), details of promoters/partners/directors, authorized signatory.

     • Upload required documents:

       • PAN of Business/Applicant.

       • Identity and Address Proof of Promoters/Directors/Partners (PAN, Aadhaar, Passport, etc.).

       • Business Registration Documents (e.g., Certificate of Incorporation, LLP Agreement).

       • Address Proof of Business Premises (rental agreement/sale deed, electricity bill, etc.).

       • Bank Account Proof (scanned copy of passbook/cancelled cheque).

       • Authorization Letter for authorized signatory.

     • Submit the application using DSC (Digital Signature Certificate) or EVC (Electronic Verification Code).

  3. Verification by GST Officer: The GST officer may issue Form GST REG-03 seeking additional information within 3 working days. You must respond in Form GST REG-04 within 7 working days.

  4. GSTIN Allotment: Upon approval, a GST Identification Number (GSTIN) and a Certificate of Registration (Form GST REG-06) are issued.

2. Filing Process (GST Returns):

• Registered businesses need to file various monthly/quarterly and annual GST returns, depending on their turnover and type of registration.

• Common Returns:

  • GSTR-1: Statement of outward supplies (sales).

  • GSTR-3B: Summary return for outward supplies, input tax credit (ITC), and tax payment.

  • GSTR-9: Annual Return (for regular taxpayers).

  • GSTR-9C: Reconciliation Statement (audited, for taxpayers with turnover > ₹5 crore).

• Frequency:

  • Normal Taxpayers: Monthly GSTR-1 and GSTR-3B (for turnover > ₹5 crore) or quarterly GSTR-1 and monthly GSTR-3B (for turnover up to ₹5 crore via QRMP scheme).

  • Composition Scheme: Quarterly GSTR-4 and annual GSTR-9A.

• Due Dates: Vary by return type and tax period (e.g., GSTR-3B is usually by the 20th of the next month).

 

III. Tax Deducted at Source (TDS) & Tax Collected at Source (TCS)

Businesses acting as deductors/collectors of tax must register for TAN and comply with TDS/TCS provisions.

1. Registration Process (TAN):

• TAN (Tax Deduction and Collection Account Number): As explained previously, this 10-digit alphanumeric number is mandatory for all persons liable to deduct/collect tax at source.

• Application: Use Form 49B online via the NSDL TIN website or offline at a TIN-FC.

• Registration on e-filing portal: Once TAN is allotted, register on the Income Tax e-filing portal as "Tax Deductor & Collector."

2. Filing Process (TDS/TCS Returns):

• Deduction/Collection: Deduct/collect tax at prescribed rates from payments made/received.

• Deposit Tax: Deposit the deducted/collected tax to the government's credit by the 7th of the next month (except for March, which is April 30th).

• Quarterly Statements/Returns: File quarterly TDS/TCS statements.

  • TDS Returns: Form 24Q (salaries), Form 26Q (non-salaries for residents), Form 27Q (non-residents), Form 26QB (property sale), Form 26QC (rent).

  • TCS Returns: Form 27EQ.

• Due Dates: Vary by quarter (e.g., Q1: July 31st; Q2: Oct 31st; Q3: Jan 31st; Q4: May 31st).

• Certificates: Issue TDS/TCS certificates (Form 16/16A/16B/16C/27D) to deductees/collectees.

 

Other Potential Business Taxes/Compliances

• Professional Tax: A state-level tax levied on individuals earning income from salary or practice of a profession. Registration and payment vary by state.

• Property Tax: For commercial properties owned by the business.

• Customs Duty: For businesses involved in importing goods into India.

• Excise Duty (limited scope): On certain manufactured goods (e.g., petroleum products, alcohol).

• Labour Laws Compliances:

  • EPF (Employees' Provident Fund): Registration if employees meet certain criteria.

  • ESIC (Employees' State Insurance Corporation): Registration if employees meet certain criteria.

  • Gratuity, Bonus, etc.

• Company Law Compliances (for Companies/LLPs): Annual filings with the Ministry of Corporate Affairs (MCA).

Key Tips for Business Tax Compliance:

• Maintain Meticulous Records: Keep all invoices, receipts, bank statements, and other financial documents organized.

• Separate Finances: Keep business and personal finances strictly separate.

• Understand Your Business Structure: This determines the applicable taxes and forms.

• Stay Updated: Tax laws and regulations can change frequently.

• Use Accounting Software: This can significantly simplify record-keeping and tax preparation.

• Seek Professional Advice: For complex tax matters or to ensure compliance, consult a Chartered Accountant (CA) or tax consultant.