Partnership Firm and LLP Tax Return

Overview

A partnership firm and a limited liability partnership (LLP) are taxed as separate entities. Each must file an income tax return every year, even if the year produced a loss or no income. A nil return is still a return.

ITR-5 is the form for firms, LLPs, associations of persons and bodies of individuals. A firm that is not an LLP and has presumptive income can in some cases use ITR-4. This service prepares the return from your accounts, works out partner remuneration and interest within the limits of the deed, computes tax and files it for the assessment year you choose, usually AY 2026-27 (FY 2025-26).

Who needs it

• Registered and unregistered partnership firms.
• LLPs, whether turnover is large or nominal.
• Firms that are new, dormant or loss-making, where a nil or loss return still has to be filed.
• Firms preparing for bank loans, tenders or investor due diligence where filed returns are requested.

What Zenith does

We listen first: the partners, the deed, how accounts are kept and what has been filed so far. We then confirm scope, share a tailored quotation and a checklist specific to your firm, and assign a relationship manager.

• Review the partnership deed or LLP agreement for remuneration and interest clauses.
• Check the books of account and finalised financial statements.
• Test whether a tax audit applies and coordinate with an authorised professional who signs the audit report; the audit engagement is separate and handled only by an eligible professional.
• Compute taxable income, partner payments allowed as deduction, surcharge, cess and any alternate minimum tax.
• Reconcile TDS credits with Form 26AS and AIS.
• File ITR-5, arrange verification through an authorised signatory and hand over the acknowledgement with an explanation of the computation.

You receive milestone updates at each stage.

Eligibility and key rules

• Tax rate: a partnership firm pays tax at 30% on taxable income, plus a 12% surcharge when income exceeds ₹1 crore (with marginal relief) and 4% health and education cess, according to a public source read.
• Alternate minimum tax: the same source mentions a minimum tax of 18.5% of adjusted total income for firms in the cases where it applies.
• Partner payments: interest on capital (the source mentions up to 12% a year) and remuneration to working partners are deductible only within the deed and statutory limits. Payments beyond those limits are disallowed in the firm.
• Books: books are expected where turnover has crossed ₹25 lakh or income ₹2.5 lakh in any of the three preceding years.
• Tax audit: generally where business turnover exceeds ₹1 crore (higher limits apply when cash dealings are small); the audit report is filed electronically by the auditor before the return.
• Verification: the return is verified by a partner or designated partner, typically by digital signature or electronic verification code.
• Other filings that interlock with the return: GST returns if registered, TDS returns if the firm has a TAN, and EPF compliance where employee strength requires it.

Documents required

• PAN of the firm or LLP and PAN, Aadhaar of partners.
• Partnership deed or LLP agreement, with amendments.
• Profit and loss account, balance sheet and capital accounts of partners as on 31 March.
• Bank statements for all accounts.
• Form 26AS and AIS.
• GST returns for reconciliation of turnover.
• Details of partner remuneration, interest on capital and drawings.
• Advance tax and self-assessment tax challans.
• Tax audit report (Form 3CB-3CD), if applicable.
• Fixed asset register and loan statements.

Process and timeline

1. Scoping and quotation; you upload the checklist documents.
2. We review the deed, accounts and GST reconciliation and test audit applicability.
3. The tax computation is prepared and shared with the partners.
4. Any tax payable is deposited; the audit report, if applicable, is filed by the auditor.
5. We file ITR-5 and obtain the acknowledgement.
6. An authorised partner verifies the return within 30 days.
7. Department processing follows, with an intimation or refund.

Timelines depend on completeness of accounts, complexity and processing by the authority.

Government fees, penalties and due dates

No government fee is charged for filing.

Item	Rule
Return, firm or LLP without audit	31 July of the assessment year (31 July 2026 for AY 2026-27)
Return, firm or LLP with audit	31 October of the assessment year; some categories extended by Circular 07/2026 dated 28 September 2026
Belated or revised return	Up to 31 December of the assessment year
Late fee, Section 234F	₹5,000, or ₹1,000 if income is up to ₹5 lakh
Interest, Section 234A	1% per month on unpaid tax

Losses cannot be carried forward if the return is late, other than house property loss. LLPs also have separate annual filings with the Registrar, which are not part of this service.

Amounts and dates above reflect public sources read in October 2026 and change with notifications, so Zenith confirms the current figures in your quotation.

Common mistakes

• Treating a firm with no business as exempt from filing.
• Using the wrong form for an LLP (ITR-4 is not available to LLPs).
• Claiming partner remuneration or interest that the deed does not authorise.
• Not tying turnover in the return to GST returns and books.
• Missing the tax audit because turnover crossed the limit late in the year.
• Verification attempted by someone who is not an authorised partner.
• Forgetting advance tax and TDS reconciliation.

FAQs