ITR Form Must Sole Proprietorship Businesses File?​ 2023


A sole proprietorship, like other incorporated businesses such as partnerships and corporations, is required to pay taxes on its earnings. Because it has the same legal standing as the owner, a sole proprietorship must file its ITR in the same manner as an individual.

As a result, the proprietorship is subject to the same legal responsibilities that control the payment of the proprietor’s income tax. This article will assist you in comprehending the many components of ITR filing for a sole proprietorship firm.

Which ITR Form Should a Sole Proprietorship Firm File?

When there is an exemption, proprietorship tax returns must be filed annually. As previously stated, the proprietor and the proprietorship firms are regarded as a single entity. Depending on the type of the business, two forms must be filed.

  • Form ITR-3: This form should be utilised to file income tax whether the proprietorship firm is owned by a Hindu Undivided Family (HUF) or any other owner.
  • Form ITR-4: This form is used by a proprietorship firm to file proprietorship tax under a presumptive tax scheme. This is done to alleviate the compliance load on small firms.

The individual’s business income has been added to the proprietor’s salary. In this sense, the proprietor’s business taxes become his or her personal taxes. The proprietor is still eligible for all tax breaks available to individuals and Hindu Undivided Families.


ITR Filing Deadlines for Sole Proprietorship Businesses

The due date for ITR filing for sole proprietorship enterprises is determined by the risk of a tax audit:

  • 31st of July: For sole proprietorships where a tax audit is not necessary.
  • 30th September: For sole proprietorship enterprises that require a tax audit.
  • 30th November: For sole proprietorship enterprises with cross-border operations.


In conclusion, sole proprietorship enterprises in India must file their Income Tax Return (ITR) using the proper ITR form based on their annual revenue and nature of income. As of September 2021, sole proprietorships with a turnover of up to 2 crore are required to file ITR-3, which is intended for individuals and Hindu Undivided Families (HUFs) with income from business or profession.

If the company’s revenue reaches 2 crore, it must file ITR-4 (Sugam). To prevent errors and potential penalties, sole owners must carefully choose the appropriate ITR form. Consultation with a tax professional or use of the Income Tax Department’s online tools can assist in identifying the right ITR form and ensuring accurate and compliant filing. For any prospective changes in the ITR filing requirements, it is essential that you stay up to date with the current regulations and guidance from the tax authorities.