Hi, I am partner in LLP and also doing as software engineer job in same firm. i am getting monthly salary from my LLP. which is my primary income. My question is which ITR form i need to fill. Confusing in ITR3, ITR4, AND ITR4s ?? Please suggest ITR form for both cases Case 1) INcome from LLP as salary + No other income source. Case 2) Income from LLP as salary + Getting income as freelanser from others
Salary by paid LLP to its partners is allowed as an expenditure to the extent of limits specified u/s 40(b) in the Income Tax Act. This remuneration will be treated as Income from Business in the hands of the partner. Hence, you need to file ITR 3.
If you are getting income as freelancer from others, it will be treated as business income. Hence, you need to include such income in ITR 3 itself. However, if such income is covered under presumptive taxation, then you need to file ITR 4.
Profit from LLP is not taxable in your hand.
Salary form LLP in which you are partner is taxable in your hand.
Suggest ITR
Case 1 -ITR 1
Case 2 ITR 4 (if you prepare Books of account) & ITR 4S (if you did not prepare books of account).
Dear Sir,
In first case you need to file ITR 3.
In second case, If you are getting income as freelancer from others, it will be treated as business income. Hence, you need to include such income in ITR 3. However, if such income is covered under presumptive taxation, then you need to file ITR 4.
Please feel free to call/ revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
But according to ITR website there is mentioned that "ITR 3 - For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship". What does it mean "not carrying out business" ?
Its means that You did not operate any other business as alone.
and You can also file ITR - 3
In which you have give the details of your LLP and it is file only after filing the ITR of LLP
As in ITR-3 you have to file the details of LLP and Profit portion in you hand (not taxable).
You are looking ITRs of last year (I.e. FY 2015-16).
In current year, ITR nubering has changed and ITR 3 states as follows:
"For individuals and HUFs having income from a proprietary business or profession) (Please see rule 12 of the Income-tax Rules, 1962"
Please feel free to call/ revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
Case 1 : ITR 2, as there is only salary income from LLP.
Case 2 : ITR 3, as in addition to salary income, business income (freelance) is also available .
To answer your next question, ITR 3 is indeed for business income . Please see below the extract from IT website .
Form No. : ITR-3
For individuals and HUFs having income from a proprietary business or profession) (Please see rule 12 of the Income-tax Rules, 1962
Hii
For LLP you have to file ITR 5 Form
and for you , you have to file ITR3 Form, salary of partner taxable under the head of Income from business or profession thus you have other income or not (from any head of income i.e. salary , house property, other business) you have to file ITR 3
Hello,
You can file ITR - 2 in your case.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Hello,
You can file ITR - 2, from this AY they have changed the form numbers.
Regards
Keerthiga Padmanabhan
M.Com., CA, LLB
But according to ITR website there is mentioned that "ITR 3 - For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship".
What does it mean "not carrying out business" ?
The matter you have stated above is for A.Y. 16-17. Please clarify as to which years returns are you planning to file ?