Partnership Compliance

Operating a Partnership Firm in India involves a range of crucial financial and legal responsibilities. It is imperative to adhere to various tax and regulatory requirements to ensure the smooth functioning and growth of your business. These obligations encompass filing Income Tax Returns, TDS Returns, GST Returns, EPF Returns, and occasionally undergoing a Tax Audit.

The submission of tax returns is a fundamental responsibility for Partnership Firms in India. At IndiaFilings, we recognize the importance of complying with Indian tax laws and the potential advantages associated with it. Our comprehensive services are meticulously crafted to aid business proprietors in navigating the intricate landscape of compliance. To simplify these compliance duties, IndiaFilings offers expert guidance, streamlining the process and eliminating hassles for business owners.

By partnering with us, you can meet your tax obligations and explore opportunities to optimize your tax benefits, enabling your business to thrive while adhering to tax regulations.

Partnership Firm

A partnership firm is a business entity formed by two or more individuals working together under a single enterprise. There are two main categories of partnership firms:

  • Registered Partnership Firm: A registered partnership firm is one that has undergone formal registration with the RoC and has received a registration certificate as evidence of its legal existence.
  • Unregistered Partnership Firm: Any partnership that lacks a registration certificate from the Registrar of Firms is referred to as an unregistered partnership.

Partnership, in essence, is an agreement entered into by two or more persons who have mutually consented to share the profits or losses arising from a jointly conducted business. The individuals involved in a partnership arrangement are individually known as partners and collectively referred to as a firm. Partners bear the responsibility of operating the firm to its maximum advantage, upholding fairness in their dealings, and maintaining accurate records and full transparency regarding all matters affecting the firm to the benefit of all other partners involved.

Income Tax Return filing for Partnership Firm

Every partnership firm in India is obligated to file income tax returns annually, regardless of whether the firm has generated income or incurred losses during the financial year. Even if there was no business activity and the partnership firm's income is zero (NIL), it is still mandatory to file an NIL income tax return within the stipulated due date.

Tax Slabs for Partnership Firm / LLP for AY 2023-24

Under the provisions of the Income Tax Act 1961, a partnership firm in India is subject to the following tax percentages:

  • Income Tax: Partnership firms are liable to pay income tax at a rate of 30% on their taxable income.
  • Surcharges: If the taxable income of the partnership firm exceeds one crore rupees, a surcharge of 12% is applicable in addition to the income tax.
  • Interest on Capital: Partnership firms can claim a deduction of up to 12% on the interest paid on capital.
  • Health and Education Cess: A 4% Health and Education Cess is levied on the total tax amount, including surcharges.
  • Marginal Relief : In case Net Income exceeds 1 crore, the amount payable as income tax and Surcharge shall not exceed the total amount payable as income tax on Total Income of Rs.1 crore by more than the amount of income that exceeds Rs.1 crore.

Minimum Alternate Tax for Partnership Firms

Similar to income tax applicable for a company, partnership firms are subject to minimum alternate Tax. A minimum alternate tax of 18.5% of adjusted total income is applicable. Hence, income tax payable by a partnership firm's profits cannot be less than 18.5 percent (increased by income tax surcharge, education cess, and secondary and higher education cess).

Deductions Allowed

When computing the income tax liability of a partnership firm, deductions are permitted for the following:

  • Remunerations or interest paid to partners that do not conform to the terms of the partnership agreement.
  • Salaries, bonuses, remunerations, and commissions are paid to non-working partners of the firm.
  • If remuneration paid to partners complies with the partnership deed but relates to transactions that pre-date the partnership deed.

ITR Forms for a Partnership Firm

The Partnership Firms can either file their Income Tax Return either through Form ITR-4 or ITR-5.


ITR-4 is to be filed by those partnership firms which are a Total Income of up to ? 50 lakh and have income from Business and Profession, which is computed under presumptive basis.


ITR-5 is to be filed by those partnership firms who are required to get their account audited.

Deadline for Partnership Firm Tax Filing

The deadline for filing ITR for a partnership firm depends on whether an audit is required:

  • If the firm is not subject to an audit, returns must be filed by 31st July.
  • If an audit is necessary, the firm must file its returns by 31st October.

Filing of GST Returns

Every GST-registered person is required to file GST Returns, and every partnership firm is required to be under GST if its aggregate annual turnover exceeds Rs. 20 lacs. Usually, the GST-registered partnership firms have to file GSTR-1, GSTR-3B, and GSTR-9 returns. If the firm has opted for a composition scheme, then GSTR-4 is to be filed.

TDS Return

The TDS Return is to be filed where the partnership firm has a valid TAN, and the type of return to be filed depends upon the purpose of deduction. The types of TDS Return are:

  • Form 24Q – TDS on Salary
  • Form 27Q – TDS where the deductee is a non-resident, foreign company
  • Form 26QB – TDS on payment for transfer of immovable property
  • Form 26Q – TDS in any other case

EPF Return filing

The partnership firm is required to get EPF registration if it employs more than ten persons, and accordingly, filing of EPF return becomes mandatory.

Accounting and bookkeeping

Books of account are required to be maintained if the partnership firm's sale/turnover/gross receipts from the business is more than Rs. 25,00,000 or the income from the business is more than Rs. 2,50,000 in any of the three preceding years.

Tax Audit

A partnership firm is required to have a tax audit carried out if the sales, turnover, or gross receipts of business exceed Rs. 1 crore in the financial year. However, it may be required to get its account audited in certain other circumstances.

Streamline Partnership Firm Compliance with IndiaFilings

Streamline your partnership firm's compliance effortlessly with IndiaFilings. We are your trusted partner in meeting all your compliance requirements, simplifying the process, and ensuring you meet deadlines while adhering to tax regulations.

Our comprehensive services cover various aspects:

  • Income Tax Return Filing: We make filing your income tax returns a breeze, ensuring accuracy and timeliness.
  • TDS Return Filing: Our support extends to TDS return filing, helping you accurately report deductions and meet your obligations.
  • GST Return Filing: For GST-registered businesses, we offer a hassle-free solution for filing both GSTR-1 and GSTR-3B returns, ensuring you stay compliant with GST regulations.
  • EPF Return Filing: We assist in EPF return filing, ensuring compliance with employee provident fund regulations.

With IndiaFilings by your side, you can concentrate on growing your partnership firm while we take care of your compliance needs. This ensures your business maintains a strong financial footing and legal standing.

Are you ready to file your partnership firm's income tax return with ease? Get started now to experience the convenience and peace of mind that comes with our expert assistance.

Partnership Compliance FAQ's

Are Partnership firms required to carry out auditing?

Partnership firms are not required to make an audited financial statement each year. The tax audit may be necessary based on the turnover and other criteria.

What are the compliances for Partnership firms?

The compliance for partnership firms mainly includes the income tax return filing unlike the corporate entities like the LLP and the company as they have to make income tax return filings as well as the annual return filing.

What documents are required for Partnership firm return filing?

For filing the returns of a Partnership firm Invoices of sales and the purchases during a year, expenses invoice, bank statements of the partners, TDS return filed copy, GST returns filing copy is required.

What is the importance of a Partnership deed?

The partnership deed contains all the Terms and conditions of the Partnership. It regulates the rights and the duties of each partner making the partnership deed a very crucial document.

Is a Partnership firm a separate legal entity?

The partnership firm and the partners of this firm are considered to be the same. In the case of the partnership firms, the liability of the partners is also unlimited and all the partners are jointly responsible for the liabilities of the firm.

Is it necessary for the Partnership firm to file the income tax returns?

Irrespective of the turnover and the profit or losses made by the partners, the partnership is required to file income tax returns.

Can a partnership deed be transferred?

There are certain limitations on the transfer of ownership of a partnership. A partner cannot transfer the partnership without the consent of all the partners.

Can a partnership firm be converted into an LLP or a company?

Yes, it is possible to convert a partnership firm into a company or an LLP. The process of conversion is very cumbersome. Hence, the entrepreneur should consider starting an LLP or a company instead of opting for a Partnership.

MCA Compliance

Every registered entity has to comply with all the compliance obligations after the completion of each financial year. Majorly, it includes the audit of books of accounts, income tax return filing, and annual forms with the MCA.

Form Company Compliance Due date Penalty
COB Filing Commence of Business Certificate To be filed before 180 days of company Incorporation Rs.50,000 for non-compliance
DIR 3 EKYC Any director with DIN Before 30th September every year Deactivation of the DIN
A late filing fee of Rs.5,000
Disqualification of the Directors
Form ADT 1 Appointment of auditor Within 15 days from the date of appointment of the Auditor Late fees will be applicable, with fees ranging from 2 to 12 times the nominal fee, depending on the number of days of delay.
Form AOC 4 Filing financial statements of the company 30 days from the conclusion of the AGM Late fees will be applicable, with fees ranging from 2 to 12 times the nominal fee, depending on the number of days of delay.
Form MGT 7 Annual Returns of the Company 60 days from the conclusion of the AGM

In addition to the above filings, depending on the type of entity and business activity more compliance filing maybe applicable. Please check with an IndiaFilings Advisor to help you with the compliance for your company.

All Limited Liability Partnerships (LLP) registered in India are required to file statutory returns with the Ministry of Corporate Affairs (MCA) each year. IndiaFilings can help you maintain your LLP Compliance at a very affordable price.

Form LLP Compliance Due date Penalty
DIR 3 KYC For every designated partners of a limited liability partnership (LLP) with DIN Before 30th September every year Deactivation of the DIN
A late filing fee of Rs.5,000
Disqualification of the Partners
Form 11 Annual Returns May 30th every year Late fees will be applicable, with fees ranging from 1 to 50 times the nominal fee, depending on the number of days of delay.
Form 8 Statements of Accounts and Solvency 30th October every year Late fees will be applicable, with fees ranging from 1 to 50 times the nominal fee, depending on the number of days of delay.

Apart from the aforementioned filings, there might be additional compliance filings that could be relevant for LLPs. Please consult with an IndiaFilings Advisor to assist you with the compliance needs of your LLP.

Entity Form Due date
Private Limited Company Annual Return (Form MGT-7) 60 days from the conclusion of the AGM or 28th November 2023 (Which Ever is Earlier)
Financial Statements (Form AOC-4) 29th October 2023
DIR-3 KYC 30th September 2023
Form DPT-3 30th June 2023
Form ADT-1 15th October 2023
ITR 6 (Non audit case) 31st July 2023
ITR 6 (Audit Cases) 31st October 2023
GSTR 9 31st Dec 2023
Limited Liability Partnership ITR 5 (Non audit case) 31st July 2023
ITR Form 5 (Audit case) 30th September 2023
Annual return - Form 11 30 May 2023
Financial Statements - Form 8 30 October 2023

Note : Get in touch with our experts to efficiently handle your compliance filings, whether you are an LLP, a company, partnership firm or a proprietorship. Contact us to ensure your compliance is filed before the due date.

Zero Late Fee Platform

Many small businesses pay lakhs in penalty every year to the Government for late filing various statutory returns. Such penalty or late fee paid is not tax deductible and is a drain on profitability. At IndiaFilings, our mission is to provide the most affordable services to our customers and help them avoid all late fee.To achieve our mission - we have built enterprise grade technology to help you proactively know the upcoming compliance and avoid penalty.Checkout our compliance services below, talk to an Advisor and stop paying unwanted late fees.

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