Annual Compliance - Proprietorship
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Saved Crores of Rupees & Millions of Startup Hours
Best Mobile App Experience
18,000+ Startups Served Across India
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Annual Compliance - Proprietorship
Annual Compliance – Proprietorship in India
What is Annual Compliance for Proprietorship?
A Sole Proprietorship is the simplest form of business in India.
While it does not have a separate legal identity like a company or LLP, it is still required to follow annual compliance based on applicable tax laws, business registrations, and industry-specific regulations.
Annual compliance ensures the business remains legally active, avoids penalties, and maintains credibility with banks, vendors, and customers.
Mandatory Annual Compliance for Proprietorship
| Compliance | Description | Due Date |
|---|---|---|
| Income Tax Return (ITR) | File ITR-3 or ITR-4 depending on income type & turnover | 31st July (Non-Audited) / 31st Oct (Audited) |
| GST Returns (if registered) | Monthly/Quarterly GSTR-1, GSTR-3B, and Annual GSTR-9 | Monthly/Quarterly & 31st Dec (Annual) |
| Tax Audit (if applicable) | Mandatory if turnover exceeds limits under Sec 44AB | 30th September |
| TDS Returns (if applicable) | Quarterly filing for deducted taxes | As per TDS due dates |
| Professional Tax (if applicable) | State-wise professional tax filing | As per state rules |
| Business License Renewals | Trade license, FSSAI, Shops & Establishment Act renewal | As per respective authority dates |
Documents Required
PAN of Proprietor
Aadhaar of Proprietor
Financial Statements (Profit & Loss, Balance Sheet)
Bank Statements
GST login credentials (if applicable)
Details of tax deducted/collected (TDS/TCS)
License/registration copies
Importance of Annual Compliance for Proprietorship
Avoid penalties under Income Tax & GST laws
Maintain active GST & license status
Enhance financial credibility for loans and tenders
Keep business legally protected
Ensure smooth business operations
Penalties for Non-Compliance
| Non-Compliance | Penalty |
|---|---|
| Late ITR Filing | 1,000 to 5,000 (u/s 234F of Income Tax Act) |
| Late GST Filing | 50/day (25 CGST + 25 SGST) per return |
| Non-Filing of GST | Cancellation of GST registration |
| TDS Late Filing | 200/day u/s 234E plus interest |
Annual Compliance Services for Proprietorship Include
Filing ITR-3 or ITR-4
Filing GST Returns (monthly/quarterly & annual)
TDS Return Filing (if applicable)
Professional Tax Filing (if applicable)
License Renewals (Trade License, FSSAI, Shops & Establishment)
Audit Support (if applicable)
Process
Collect necessary documents
Review business transactions and records
Prepare and file applicable returns
Renew licenses and registrations
Provide compliance completion reports