Sole Proprietorship Complainces

✅ Sole Proprietorship Compliances

A sole proprietorship is the simplest form of business — just one person running the show.
There is no separate legal entity, no ROC filing, no annual returns like companies.

But a proprietor still has important tax & business compliances to follow.

1️⃣ PAN, Aadhaar & Bank Account

Since the proprietor and the business are the same, PAN of the proprietor is used.

✔ PAN of owner
✔ Aadhaar of owner
✔ Open a current account in business name

2️⃣ GST Registration & Returns (Only if applicable)

GST is not mandatory unless conditions apply.
You need GST registration if:
✔ Your turnover crosses

• ₹20 lakh (services), or
• ₹40 lakh (goods)

✔ You sell online (Amazon/Flipkart)
✔ You serve outside your state
✔ You do export/ import

If registered, you must file:

• GSTR-1 monthly/quarterly
• GSTR-3B monthly
• Annual return (if applicable)
• Maintain GST invoices & records

3️⃣ Income Tax Return (ITR-3 or ITR-4)

A sole proprietor files a personal income tax return, not a business return.
Use:

✔ ITR-3 – for normal business income
✔ ITR-4 – for presumptive taxation (44AD/44ADA)

Due Date:

📅 31 July (non-audit)
📅 31 October (audit case)

4️⃣ Tax Audit (Only if turnover crosses limits)

Audit is required only if:

✔ Business turnover > ₹1 crore, or
✔ Turnover > ₹10 crore (if 95% transactions are digital)
✔ Professionals earning > ₹50 lakh
✔ You opt out of presumptive scheme after opting in

Audit report forms: 3CA/3CB & 3CD

5️⃣ TDS Compliances (If applicable)

If you make payments like:

• Rent
• Salary
• Contractor payments
• Professional fees

…you must:

✔ Deduct TDS
✔ Pay monthly
✔ File quarterly TDS returns

6️⃣ Books of Accounts

Even small proprietors must keep basic records:

✔ Sales & purchase register
✔ Cash book
✔ Expense records
✔ Bank statements
✔ Stock records (if applicable)

Under section 44AA, certain businesses must maintain books if turnover crosses limits.

7️⃣ Local Business Compliances

Based on your city/state, you may need:

✔ Shops & Establishment Act registration
✔ Trade license
✔ MSME/Udyam registration
✔ Professional Tax (in some states)
✔ FSSAI (if dealing in food)
✔ Gumasta license (Maharashtra)

8️⃣ Labour Law Compliances (If employees exist)

If you hire staff, you must follow:

✔ PF
✔ ESI
✔ Minimum wages
✔ Employee attendance & payroll records
✔ Gratuity (after certain conditions)

9️⃣ Import/Export Code (IEC)

If doing import/export → IEC mandatory.

⭐ SUMMARY

Compliance Area	Requirement
Income Tax	ITR-3/4 by 31 July/31 Oct
GST	Only if turnover crosses limits
Audit	Only if turnover exceeds limits
TDS	Deduct & file if applicable
Books	Maintain basic accounts
Local Registrations	Shops & Establishment, MSME, etc.
Licenses	Industry-based (FSSAI, Trade license, etc.)

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