A partnership firm has no ROC filings, but must file its income tax return in ITR-5, get a tax audit if turnover crosses the threshold, deduct TDS where applicable, file GST returns if registered, and report changes in partners, name or address to the Registrar of Firms.
Income tax compliance
- File ITR-5 by the due date
- Tax audit if turnover exceeds the threshold
- Advance tax instalments
- Partner interest and remuneration within Section 40(b) limits
GST and TDS
Firms registered under GST file GSTR-1 and GSTR-3B. Firms liable to deduct TDS obtain a TAN, deposit TDS monthly and file quarterly returns.
Reporting changes
- Admission or retirement of partners
- Change of firm name or principal place of business
- Opening or closing of branches
- Dissolution of the firm
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Frequently asked questions
Does a partnership firm need an audit?
No statutory audit is required under the Partnership Act, but a tax audit applies if turnover exceeds the threshold under the Income Tax Act.
Is partner salary taxable?
Remuneration and interest received by partners from the firm are taxable in the partners' hands as business income, while the firm deducts them within Section 40(b) limits.
What happens when a partner retires?
Execute a retirement or reconstitution deed, settle the partner's account, update the Registrar of Firms, bank and GST records.
Is TDS required on partner salary?
TDS provisions on payments by firms to partners have been introduced for amounts above the prescribed threshold. Check current rules for the applicable financial year.
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