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29,Oct 21
Sole Proprietorship Compliance Manual
Dear Reader,
We are existing in a rapidly changing business environment. The pace of change has significantly expanded the business risk canvass forcing regulators and legislators to enforce stringent compliance norms. While the intention of regulators is to manage and mitigate business risks and drive business integrity, the stakeholders are often challenged with a task of monitoring, adhering and managing these compliances to sustain business.
India has undergone significant changes in tax and regulatory legislations and business owners are often under pressure to ensure compliances on time. Not meeting compliance could result in stringent liabilities on the business and lead to severe penalties and reputational risks.
In this insight document, we have taken a reasonable attempt to consolidate significant tax and regulatory compliances and their consequences under the following Laws:
- The Income-tax Act, 1961
- The Goods and Services Tax Acts
We hope this docket works as a quick reference manual to guide you in managing your statutory compliance initiatives. We do not claim that this is a total compliance management handbook and recommend to use this hand-out as a guidance document only.
Therefore, readers of this publication are advised to seek their own professional advice before taking any course of action or decision, for which they are entirely responsible, based on the contents of this publication.
Regards,
PravasiVentures
Income Tax
| Compliance | Due Date | Consequence of non-compliance |
| Payment of Advance Tax:
Income Tax payable before the end of the financial year, in a progressive manner. | The following are the slabs for payment of advance tax:
| Default in payment:
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| Income Tax Return |
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| Payment of self-assessment tax(Sole Proprietor) Every Sole Proprietor has to deposit the income tax liability as stated in the return of income |
| Treated as assessee-in-default – Penalty of such amount as Assessing Officer may impose but not exceeding the tax payable. |
| Submission of Tax Audit Report: Books of accounts to be audited and report in Form 3CD to be submitted accompanied by tax auditor’s certificate in Form No 3CB (Applicable to gross receipts from Business exceeds Rs.1 Crore) | One month prior to due date of filing tax return (On or before September 30 in the year following the financial year end; For Sole Proprietors subject to Transfer Pricing, due date is October 31) |
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Payment of TDS:
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Submission of Quarterly TDS Returns:
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| Certificates evidencing taxes deducted from payments other than salary, to be issued to the payees
Form 16A |
| Penalty – Rs 100 for every day during which failure continues |
| Certificates evidencing taxes deducted from salary payments, to be issued to employees Form 16 | By 15 June of the next Financial Year | Penalty – Rs 100 for every day during which failure continues |
| Payment of TCS |
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| Submission of Quarterly TCS Returns Form 27EQ |
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| Certificate evidencing collection of TCS |
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| AMT Certificate: Every Sole Proprietor paying tax under AMT is required to furnish Form 29C, certified by a CA | To be obtained before furnishing of Return of Income | |
| Non-resident payments | Any person responsible to make payment to a non-resident, shall furnish information in Form 15CA and Form 15CB | Penalty of Rs 100,000 |
| Certificate for tax deducted under section 194-IA / 194-IB / 194M
Form 16B/16C/16D | By June 15 following financial year end | Penalty – Rs 100 for every day during which failure continues |
| Statement of Financial Transactions (SFT): Applicable to sole proprietors liable to tax audit | By May 31 following financial year end | Penalty - Rs 500 per day from the expiry of original due date till due date in notice and Rs 1,000 per day beyond the due date specified in the notice |
Income Tax – Transfer Pricing
| Compliance | Due Date | Consequence of non-compliance |
| Transfer Pricing Certificate: Sole Proprietor, who has entered into international transactions or specified domestic transactions (‘SDT’) with its Associated Enterprise is required to furnish a certificate in Form 3CEB Transfer Pricing Documentation: Sole Proprietor is required to maintain prescribed documentation in respect of international transactions or SDT entered into by it with its associated enterprise during the year. |
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GST
| Compliance | Due Date | Consequence of non-compliance |
| Furnishing details of outward Supplies: Form GSTR-1 | Normal taxpayer having turnover up to Rs 1.5 crore and opted for quarterly filing – 30th of the month following the end of the quarter. Others - 11th of the subsequent month |
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| Monthly GST return and the payment of GST: In General -Form 3B | 20th of the following month (Monthly) |
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| Quarterly GST Return and payment of GST under Composition Scheme: Form CMP-08 | 18th of the month following the Quarter (Quarterly) |
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| Return to be filed annually under Composition Scheme: GSTR-4 | April 30 following financial year end |
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| GST Return and payment of GST by a non-resident taxable person: Form GSTR-5 | 20th of the following month or 7 days after last date of validity period of registration, whichever is earlier |
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| GST Return and payment of GST by an Input Service Distributor: Form GSTR-6 | 20th of the following month (Monthly) | Input tax credit cannot be claimed |
| Monthly GST Return and payment of TCS under GST: Form GSTR-8 | 10th of the following month (Monthly) | |
| Annual Return:
Regular Taxpayer: Form GSTR-9 Composition Taxpayer: Form GSTR-9A E-Commerce Operator: Form GSTR-9B | December 31 of the next Financial Year |
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| GST Audit: Applicable to regular taxpayer having aggregate turnover > Rs 2 Crores Form GSTR-9C | December 31 of the next Financial Year | Sole Proprietor on account of outstanding tax to be paid. |
| Deposit of GST | Regular Taxpayer – 20th of the following month.
Composition Taxpayers – 18th of the month following the quarter |
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| Maintenance of separate accounts and other documents: In case of multiple places of business (as per the registration certificate), the accounts shall be maintained at the respective place of business. | Penalty of Rs 10,000 or an amount equal to tax evaded, whichever is higher |
