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Partnership Firm Complainces

✅ Partnership Firm Compliances

A partnership firm is easy to start and manage, but still has a few legal responsibilities.
These keep the firm compliant with Income Tax, GST, TDS, and Local Laws.

1️⃣ Partnership Deed Registration (Optional but Recommended)

  • A partnership firm can be registered or unregistered.
  • But registering gives legal protection.
  • ✔ Draft a Partnership Deed
  • ✔ Notarize it
  • ✔ Register at the Registrar of Firms (optional)
  • Even if unregistered, the deed must exist.

2️⃣ PAN & Bank Account

  • ✔ Apply PAN for the firm
  • ✔ Open a bank account in the firm's name
  • ✔ All transactions should go through the firm’s account

3️⃣ Income Tax Return (ITR-5)

  • Every partnership firm must file ITR-5.
  • Due Dates:
  • • 31 July → If no audit
  • • 31 October → If audit applies
  • 💡 Partners file their own individual ITR separately.

4️⃣ Tax Audit (Only if applicable)

  • Audit is required if:
  • ✔ Business turnover > ₹1 crore
  • ✔ Profession income > ₹50 lakh
  • ✔ If opting out of presumptive taxation (44AD/44ADA)

5️⃣ TDS Compliances (If applicable)

  • If firm makes payments like:
  • • Salary
  • • Rent
  • • Professional fees
  • • Contractor payments
  • …it must:
  • ✔ Deduct TDS
  • ✔ Deposit monthly
  • ✔ File quarterly TDS returns (Form 24Q/26Q)

6️⃣ GST Compliances

  • If GST is applicable:
  • ✔ Take GST Registration
  • ✔ File GSTR-1 & GSTR-3B monthly/quarterly
  • ✔ Maintain GST invoices
  • ✔ Keep purchase & sales records
  • ✔ Annual reconciliation

7️⃣ Books of Accounts

  • A partnership firm must maintain:
  • ✔ Cash book
  • ✔ Ledger
  • ✔ Purchase/sales records
  • ✔ Stock records (if applicable)
  • ✔ Vouchers & bills
  • ✔ Partners’ capital accounts
  • Even unregistered firms must maintain accounts.

8️⃣ Partners’ Remuneration Rules

  • Salary, interest, and profit share paid to partners must follow Income Tax Act limits:
  • ✔ Interest to partners ≤ 12% p.a.
  • ✔ Partner salary as per deed & tax rules

9️⃣ Local Business Registrations (as applicable)

  • Depending on state/business:
  • ✔ Shops & Establishment Act
  • ✔ MSME (Udyam)
  • ✔ Professional Tax
  • ✔ Trade license
  • ✔ Labour registrations (PF/ESI if employee strength is high)

🔟 Event-Based Compliances

  • Only when changes happen:
  • ✔ Admission/removal of partner
  • ✔ Change in partnership deed
  • ✔ Change of business address
  • ✔ Change in profit-sharing ratio
  • ✔ Conversion into LLP/company
  • These must be updated in the deed and notified where necessary (bank, GST, etc.).

⭐ Summary

Area
Compliance
ITR Filing
ITR-5 yearly
Audit
Only if turnover crosses limit
GST
If registered, file monthly returns
TDS
Deduct & file quarterly returns
Books of Accounts
Must be maintained
Deed Updates
When changes happen

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