What is Proprietorship Compliance?
Proprietorship (Sole Proprietorship) Compliance encompasses all mandatory financial and statutory obligations that a sole proprietor must fulfill annually. A proprietorship is not a separate legal entity — the owner and business are the same for tax purposes. Compliance includes Income Tax Return filing (ITR-3 or ITR-4), GST returns, TDS compliance, maintaining books of accounts, and tax audit where applicable.
ITR Forms for Proprietors
| Form | When to Use |
|---|
| ITR-3 | Proprietors with income from business/profession (not under presumptive scheme) |
| ITR-4 | Proprietors under presumptive taxation (Section 44AD/44ADA/44AE) with income ≤ ₹50 lakh |
Annual Compliance Checklist for Proprietorships
| Compliance | Form/Activity | Due Date | Condition |
|---|
| Income Tax Return | ITR-3 or ITR-4 | July 31 (non-audit) / Sept 30 (audit) | If income exceeds basic exemption |
| Tax Audit | Form 3CA/3CB | September 30 | Turnover > ₹5 crore (business) or > ₹50 lakh (professional) |
| GST Returns | GSTR-1, GSTR-3B, GSTR-9 | Monthly/Quarterly + Annual | If GST registered (turnover > ₹20L/40L) |
| TDS Returns | 24Q, 26Q, 27Q | Quarterly | If TAN obtained and TDS deducted |
| EPF Returns | ECR Challan | 15th monthly | If 20+ employees |
| Professional Tax | PTRC Return | State-specific | Applicable states only |
Income Tax Exemption Slabs for Proprietors
| Age Category | Basic Exemption Limit |
|---|
| Below 60 years | ₹3,00,000 (New Tax Regime) |
| 60–80 years (Senior Citizen) | ₹3,00,000 |
| Above 80 years (Super Senior Citizen) | ₹5,00,000 |
Books of Accounts Requirement
Proprietors must maintain proper books of accounts if:
- Annual turnover/receipts exceed ₹25 lakh in any of the preceding 3 years, OR
- Business income exceeds ₹2.5 lakh in any of the preceding 3 years
