ITR Filing for Partnership Firms
Partnership firms (registered or unregistered) file ITR-5. Firm income is taxed at 30% flat plus surcharge and cess. Partner remuneration is deductible under Section 40(b) subject to book-profit limits; interest on partner capital is deductible up to 12% simple.
- Correct form: ITR-5
- Regime: Firm taxed at 30% flat + surcharge; partner remuneration deductible under Section 40(b).
- Reconcile AIS + 26AS before filing to avoid 143(1)(a) intimations.
- Aadhaar OTP e-verification the same day.
- Free notice defence within 12 months of filing.
Definition
44ADA
Definition
44AD
Definition
Section 44AB
Typical income mix for partnership firms
- Business turnover
- Partner remuneration expense (Section 40(b))
- Interest on partner capital (12% cap)
- Firm profit share to partners (exempt in partners' hands under 10(2A))
- Capital gains on firm assets
Deductions available
- Section 40(b) — partner remuneration limits
- Section 40(b)(iv) — 12% interest on capital
- Actual business expenses
- Depreciation on firm assets
- Section 80JJAA — new employee salary
Documents required
- Partnership deed
- Audited firm P&L, balance sheet
- Partner remuneration & interest working (40(b))
- Bank statements
- GST returns
- Tax audit report (if applicable)
Common mistakes to avoid
- Exceeding 40(b) remuneration limits — disallowance
- Not deducting TDS on partner remuneration (Section 192, 194T from 2025)
- Missing tax audit above ₹1 Cr
- Reporting profit share as taxable in partners' ITR (it is exempt)
- Not filing Form 3CB-3CD for tax audit
Worked example
A Surat trading firm with ₹6 Cr turnover files ITR-5, deducts ₹48L partner remuneration within 40(b) limits and pays ₹1.28 Cr tax after audit.
Partnership Firms — filing snapshot
| Item | Detail |
|---|---|
| Recommended form | ITR-5 |
| Regime guidance | Firm taxed at 30% flat + surcharge; partner remuneration deductible under Section 40(b). |
| Presumptive available | Depends on income mix |
| Audit trigger | Above threshold or below deemed profit |
| Taxpex turnaround | 24–72 hours |
Ready to file with CA-led accuracy?
Zero-error ITR, refund tracked, notice defence included.
Frequently asked questions
Frequently asked questions
Search or filter by category. Still unsure? A senior CA replies on WhatsApp within minutes.
Related tools, guides & services
Related reading
- Which ITR Form Should You File in 2025? Complete Guide (ITR-1 to ITR-4)
- ITR-1, ITR-2, ITR-3, ITR-4 — Which Form Do You Actually Need to File?
- Which ITR Form Should You File in 2026? (ITR-1 to ITR-7 Explained)
- Documents Required for ITR Filing 2026 — The Complete Checklist
- ITR Filing Last Date FY 2024-25 (AY 2025-26) — Complete Guide
Related services
Compliance guides
People also ask
Which ITR form is right for me?+
We pick the correct form based on your income heads — salary, business, capital gains, foreign income — and confirm in writing before filing.
via Income Tax Return FilingWhen is CGST + SGST charged vs IGST?+
CGST + SGST applies for intra-state supplies (supplier and place of supply in same state). IGST applies for inter-state and imports.
via GST CalculatorWhich regime is default in FY 2025-26?+
The new regime is the default. You must actively opt for the old regime while filing.
via Income Tax Calculator FY 2025-26What if I miss a GST deadline?+
₹50/day late fee (₹20 for nil returns) plus 18% p.a. interest. After 6 months of non-filing, GSTIN can be cancelled.
via GST Return Filing