Business Income Taxation & Filing
Business income is filed in ITR-3 (individuals), ITR-5 (firms/LLPs) or ITR-6 (companies). Books of accounts under Section 44AA are mandatory unless 44AD/44ADA/44AE presumptive is opted. Tax audit under Section 44AB triggers at ₹1 Cr turnover (₹10 Cr with ≥95% digital).
- Section 28–44DB: computation of business income
- Section 44AA: books of accounts thresholds
- Section 44AB: tax audit thresholds ₹1 Cr / ₹10 Cr
- Section 44AD: presumptive 6%/8% up to ₹3 Cr
- Section 40(b): partner remuneration limits (firms/LLPs)
Definition
Business Income
What is Business Income?
Business income is filed in ITR-3 (individuals), ITR-5 (firms/LLPs) or ITR-6 (companies). Books of accounts under Section 44AA are mandatory unless 44AD/44ADA/44AE presumptive is opted. Tax audit under Section 44AB triggers at ₹1 Cr turnover (₹10 Cr with ≥95% digital).
Key rules to remember
- Section 28–44DB: computation of business income
- Section 44AA: books of accounts thresholds
- Section 44AB: tax audit thresholds ₹1 Cr / ₹10 Cr
- Section 44AD: presumptive 6%/8% up to ₹3 Cr
- Section 40(b): partner remuneration limits (firms/LLPs)
Worked example
A Kolkata trading firm with ₹4.8 Cr digital turnover: opts out of 44AD, files ITR-5 with actual profit 4.5% (₹21.6L), completes 44AB audit and pays 30% flat tax = ₹6.48L.
Which ITR form applies
- ITR-3 — No upper limit
- ITR-4 (Sugam) — 44AD ₹3 Cr (digital) / 44ADA ₹75L / 44AE per vehicle
- ITR-5 — No upper limit
- ITR-6 — No upper limit
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