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Hisho & Kanri
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We provide accounting, compliance,
and advisory services.

Partnership Firm Tax Return Filing

File your partnership firm's tax return right, every single year.

A partnership firm — registered or unregistered, with two or more partners running a business under a partnership deed — is required to file its income tax return in Form ITR-5 every financial year, regardless of whether it made a profit, a loss, or earned nothing at all. Unlike individuals, firms don't get a basic exemption slab: the entire taxable income is charged at a flat rate, along with surcharge and cess where applicable, after adjusting for partner remuneration and interest allowed under the deed.

Get the computation wrong and the cost isn't just a bigger tax bill — it can mean disallowed remuneration, interest under Sections 234A/B/C, a lost right to carry forward losses, or a scrutiny notice you didn't need. That's exactly why most firms hand this over to a tax professional who reconciles the books, applies the deed correctly, and files well before the deadline.

Talk to a Tax Filing Expert See How Firms Are Taxed
0Firm Returns Filed
0Flat Tax Rate Simplified
0Avg. Turnaround
0On-Time Filing Rate
30%
Flat Rate
Form ITR-5 · Assessment Year 2026-27
Your Filing, Step by Step

Books Finalized

P&L and balance sheet reconciled

Tax Computed

Remuneration & interest adjusted

ITR-5 Filed

Filed electronically with schedules

Return Acknowledged

E-verified and ITR-V received

Entity TypePartnership Firm
Applicable FormITR-5
Filed ByHisho & Kanri
Tax Structure

How partnership firm income is actually taxed

Firms don't follow the individual slab system. Here's the full set of rates, deductions, and provisions that decide your final tax liability.

Flat 30% Tax Rate

Unlike individuals, firms are taxed at a flat rate on their entire total income, with no basic exemption threshold to reduce it.

Applies to All Firms

12% Surcharge

Kicks in once total income crosses ₹1 crore, added on top of the base tax before cess is applied.

4% Health & Education Cess

Levied on the tax plus surcharge amount, funding public health and education programs nationally.

Partner Remuneration Deduction

Salary or remuneration paid to working partners is deductible, but only within the limits prescribed under Section 40(b).

Interest on Partner's Capital

Interest paid to partners is deductible up to 12% per annum, provided it's authorised by the partnership deed.

Alternate Minimum Tax (AMT)

Firms claiming certain deductions may need to pay AMT at 18.5% if it works out higher than the tax computed normally.

Presumptive Taxation (44AD/44ADA)

Eligible small firms can declare income at a prescribed percentage of turnover without maintaining detailed books.

Carry Forward of Losses

Business losses can be carried forward for up to 8 assessment years — but only if the return is filed by the due date.

The Process

From your books to a filed, acknowledged return

Here's exactly what happens between handing over your financials and receiving your ITR-V acknowledgment.

Step 01

Collect Financial Statements

Profit & loss account, balance sheet, and partner capital accounts are gathered and reconciled for the financial year.

Step 02

Verify Partnership Deed Terms

Remuneration, interest on capital, and profit-sharing ratios are checked against the deed to confirm what's actually deductible.

Step 03

Book Profit Computation

Net profit is adjusted for disallowances, additions, and depreciation to arrive at the taxable book profit.

Step 04

Remuneration & Interest Adjustment

Deductible partner remuneration and interest are computed within Section 40(b) limits and reduced from book profit.

Step 05

Tax Audit Check (Section 44AB)

Turnover and presumptive taxation eligibility are reviewed to see whether a tax audit report needs to be filed alongside the return.

Step 06

Tax Liability Computation

Final tax is computed at the flat rate plus surcharge and cess, after adjusting advance tax and TDS already paid.

Step 07

ITR-5 Preparation & Filing

The return is prepared with all relevant schedules and filed electronically on the income tax e-filing portal.

Step 08

E-Verification & Acknowledgment

The return is e-verified using DSC or Aadhaar OTP, and the ITR-V acknowledgment is saved for your records.

Eligibility

Who must file a partnership firm tax return?

Filing obligations for firms are broader than most people expect — here's exactly who needs to file, and when it's non-negotiable.

Every Registered or Unregistered Firm

All partnership firms formed under a partnership deed must file a return, irrespective of profit or loss.

Regardless of Income Level

There's no minimum income threshold for firms — even a nil-income or loss-making firm must file.

Firms Under Presumptive Taxation

Firms declaring income under Section 44AD or 44ADA still need to file within the prescribed form and deadline.

Firms Liable for Tax Audit

Firms crossing the prescribed turnover threshold must file along with a tax audit report under Section 44AB.

Firms Carrying Forward Losses

To carry forward and set off losses against future profits, the return must be filed by the original due date.

Dissolved or Discontinued Firms

Firms that closed operations during the year must still file a return for the period they were active.

Paperwork

Documents you'll need to keep handy

Gathering these upfront is the single biggest thing you can do to speed up your filing and avoid back-and-forth delays.

Partnership Deed

Original deed and any supplementary deeds

Profit & Loss Account

Finalized trading and P&L for the year

Balance Sheet

Year-end sheet with partner capital accounts

PAN of the Firm

Used as the primary identifier for filing

Bank Statements

All operating accounts for the full year

GST Returns

GSTR filings, if registered, for reconciliation

Form 16A / 26AS

TDS deducted on the firm's income

Partner Details

PAN and remuneration/interest particulars

Why It's Worth It

What filing on time actually buys your firm

Beyond staying on the right side of the law, a clean, on-time filing record works in your firm's favor in ways that compound over the years.

Carry Forward Losses

Preserves your right to carry forward business losses for up to 8 years

Avoids Penalty & Interest

Filing before the due date prevents late fees under Sections 234A/B/F

Easier Loan Approvals

Filed returns serve as income proof for business loans and credit lines

Stronger Compliance Record

Builds credibility with banks, vendors, and tax authorities alike

Faster Refunds

Excess TDS or advance tax is refunded only once the return is processed

Reduced Scrutiny Risk

Accurate, on-time filing lowers the chance of notices or scrutiny

Supports Business Growth

Clean tax records ease due diligence for funding or LLP conversion

After Filing

Staying compliant through the rest of the year

Filing your return is one milestone — here's what keeps your firm in good standing between assessment years.

Advance Tax Payments

Quarterly instalments if estimated tax liability exceeds ₹10,000 for the year.

TDS Return Filing

Quarterly TDS returns if the firm deducts tax on payments it makes.

GST Return Filing

Monthly or quarterly GST returns for firms registered under the GST regime.

Books of Accounts Maintenance

Ongoing bookkeeping as required under Section 44AA of the Income Tax Act.

Tax Audit Compliance

Annual audit report filing where turnover crosses the prescribed threshold.

Response to Notices

Timely replies to income tax notices, intimations, or scrutiny queries.

Why Hisho & Kanri

Filing handled by people who do this every season

We've computed and filed enough partnership returns to know exactly where deed interpretation and deduction limits go wrong — and how to get them right the first time.

Experienced Tax Professionals

Chartered accountants who file partnership returns across industries every season.

On-Time, Every Time

Filed well before due dates so you never pay interest for a missed deadline.

Transparent, Flat Pricing

One clear fee for computation, audit coordination, and filing — no surprises.

Full Visibility

You see the computation sheet and draft return before anything is filed.

Dedicated Point of Contact

One professional who knows your firm's deed and history, year after year.

Confidential Handling

Your financials and partner details are handled under strict confidentiality.

FAQ

Common questions about partnership firm tax filing

Can't find your question here? Use the form alongside this page and we'll answer it directly.

It's the annual return filed in Form ITR-5, reporting the firm's income, partner remuneration and interest deductions, and the tax computed at the applicable flat rate.

Form ITR-5 applies to partnership firms and LLPs that aren't required to file ITR-7, covering business income, remuneration, and audit details in one form.

No. Firms don't get slab rates or a basic exemption — profits are taxed at a flat rate, plus applicable surcharge and cess.

Only if turnover or gross receipts cross the threshold prescribed under Section 44AB, or if presumptive taxation is opted out of after being used earlier.

Typically 31 July if a tax audit isn't required, and 31 October if it is — though the department can extend these dates in a given year.

Yes — registration under the Partnership Act isn't a condition for filing. Any firm constituted by a deed is required to file.

You can still file a belated return with interest and a late fee, but you generally lose the right to carry forward business losses.

Yes, within the limits set under Section 40(b), calculated on book profit and subject to the terms specified in the partnership deed.

Yes, if the estimated tax liability for the year exceeds ₹10,000, payable in quarterly instalments through the year.

Because we reconcile your books, apply deed-based deductions correctly, and file well ahead of deadlines — season after season.