Excel Taxation for Different Types of Business Structures in India

With all the buzz around the new taxation system after announcing the Union Budget of 2025, let's figure out how to handle taxation for different types of businesses in India. Companies are registered under various categories based on their business goals, liability concerns, and compliance readiness. A firm registered under a private limited company enjoys greater freedom than a public limited company. A sole proprietorship business is owned and run by one person; on the other hand, a business formed by partners is a partnership firm.

In India, businesses can be registered under different company structures based on ownership, liability, and compliance requirements. Below are the main types of company registrations:

1. Sole Proprietorship: Owned amp; managed by one person

• There is no separate business tax for sole proprietorship.
• Income for this business structure is taxed as the individual's income under Income Tax Slabs.
• GST is applicable if turnover exceeds ₹40 lakh (₹20 lakh for service-based businesses).
• In a sole proprietorship, the Filing Requirements are ITR-3 or ITR-4 (the Presumptive Taxation Scheme is available for turnover up to two crore).
• GST returns if the firm is registered.

2. Partnership Firm: Formed by two or more partners under a Partnership Deed

• For this business structure, a flat 30% income tax and + 4% Health & Education Cess must be paid.
• A surcharge of 12% if income from the partnership firm exceeds one crore.
• The salary and interest of the business partner (as per the deed) are authorised as expenses.
• GST is applicable if turnover crosses ₹40 lakh (₹20 lakh for service-based businesses).
• Filing Requirements are ITR-5 form for income tax. GST returns if registered.

3. Limited Liability Partnership (LLP): Separate legal entity with limited liability for partners

• The owners have to pay a flat 30% tax on income and a 4% Cess for a limited liability partnership.
• A surcharge of 12% for income above ₹1 crore.
• There is no Dividend Distribution Tax (DDT) for limited liability partnerships, unlike private companies.
• GST is applicable based on the turnover of the firm.
• The Filing Requirements are the ITR-5 form for tax returns and Annual ROC (Registrar of Companies) compliance.
• GST returns if applicable.

4. Private Limited Company (Pvt Ltd): Separate legal entity, shareholders have limited liability

• Under Section 115BAA of the new tax regime, a private limited company has to pay 22% corporate tax and 4% Cess (for companies not availing of exemptions).
• Under the old regime, 25% tax (on turnover up to ₹400 crore) or 30% tax (on turnover above ₹400 crore) was required.
• A surcharge of 7% if income is between 1 crore - ten crore, 12% if exceeding ten crore.
• Shareholders pay tax on dividends at their slab rate.
• GST is applicable as per turnover.
• The Filing Requirements are the ITR-6 form for tax returns and annual filings with MCA (Ministry of Corporate Affairs).
• GST returns if registered.

5. One-Person Company (OPC): Started by a single entrepreneur

• The taxation procedure for a one-person company is similar to that of Private Limited Companies (22% or 25% corporate tax).
• GST is applicable based on turnover.
• Filing Requirements are ITR-6 forms for tax returns along with annual filings with MCA.
• GST returns if applicable.

6. Hindu Undivided Family (HUF): Taxation is separate from individual members

• Hindu Undivided Families are taxed as a separate entity under Income Tax Slabs.
• These firms can claim deductions under Section 80C.
• GST is applicable based on turnover.
• Filing Requirements are ITR-2 or ITR-3, depending on income sources.

Common GST Compliance for All Business Structures

GST Registration is Mandatory if turnover exceeds ₹40 lakh (₹20 lakh for services). For interstate transactions, registration is compulsory regardless of turnover.

GST Returns:

GSTR-1 (Sales details) – Monthly/Quarterly.

GSTR-3B (Tax payment summary) – Monthly.

GSTR-9 (Annual return) – Yearly if turnover exceeds ₹ two crore.

Given the complexity of handling taxes, one should be very careful while carrying out the process and seek professional help wherever necessary. Contact Lawgical India Business Developers Pvt. Ltd. to file taxes for all types of businesses without tension. Our team of 80+ professionals is well aware of the taxation process and has ample experience in this field. They will ensure that you face no difficulties and thoroughly assist you in the tax filing process.