Partnership Compliance
Ongoing statutory and tax compliance support for partnership firms.
What's covered
- A partnership firm is a distinct taxable entity under the Income-tax Act 1961 and files its own income-tax return — typically ITR-5 — separate from the individual returns of its partners. The firm is taxed at the flat firm rate on its net income, while partners are then taxed separately on their salary and interest received from the firm.
- Tax audit under section 44AB applies to a partnership firm that crosses the prescribed turnover threshold (business or profession). Where audit is mandated, a Chartered Accountant certifies the accounts and the tax audit report (Form 3CA/3CB with 3CD) is filed along with the return.
- Partners may draw remuneration and interest from the firm only within the limits prescribed in section 40(b). Amounts exceeding those limits are disallowed and added back to the firm's taxable income, making accurate deed drafting and book maintenance essential.
- Beyond income-tax, a GST-registered partnership firm files periodic GST returns (GSTR-1, GSTR-3B, and the annual GSTR-9), meets TDS obligations on payments, and maintains books of account as required by section 44AA.
How we work
- 01
April–September: advance tax and GST returns
Pay advance tax instalments by 15 June and 15 September on the firm's estimated income. File monthly or quarterly GSTR-1 and GSTR-3B, and deposit TDS deducted on payments by the 7th of each month.
- 02
October–December: tax audit and Q3 advance tax
If turnover exceeds the section 44AB threshold, have books audited by a Chartered Accountant and file Forms 3CA/3CB with 3CD before the due date. Pay the Q3 advance tax instalment by 15 December.
- 03
January–March: year-close and final advance tax
Pay the fourth advance tax instalment by 15 March. Reconcile all partner capital accounts, remuneration workings, and interest calculations. Close books and prepare financial statements.
- 04
July–October: file ITR-5 and GSTR-9
File the firm's income-tax return (ITR-5) by the statutory due date, extended when a tax audit applies. File the annual GSTR-9 reconciliation return for the completed financial year.
Documents required
- Partnership deed (registered, with remuneration and interest clauses for section 40(b))
- Books of account — cash book, ledger, and bank statements
- GST returns (GSTR-1, GSTR-3B, GSTR-9) and GST portal credentials
- TDS challans and Form 26Q quarterly returns
- Tax audit report — Form 3CA/3CB and Form 3CD — where applicable
Applicable laws & forms
- Indian Partnership Act 1932 — governs formation, rights, duties, and dissolution of partnership firms
- Income-tax Act 1961, sections 40(b), 44AA, 44AB, 139 — partner remuneration limits, book-keeping obligations, tax audit applicability, and ITR filing due dates
- Central Goods and Services Tax Act 2017 — GST return obligations for GST-registered partnership firms
Frequently asked questions
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