vinujaglan.com · Founder's official site 
Step by step
- 1
Close the books
Finalise accounts and partners' capital accounts.
- 2
Check the deed
Make sure remuneration and interest clauses match what is being claimed.
- 3
Audit if required
Tax audit report before the return.
- 4
File ITR-5
Fill the partners' details and remuneration schedule carefully.
- 5
Verify
With the authorised partner's DSC (mandatory for audited firms) or EVC.
Partner salary and interest — section 40(b)
| Item | Limit allowed as deduction to the firm |
|---|---|
| Interest to partners | Up to 12% a year simple interest, if authorised by the deed |
| Remuneration — first ₹6 lakh of book profit (or loss) | ₹3,00,000 or 90% of book profit, whichever is higher |
| Remuneration — balance book profit | 60% |
TDS on payments to partners — section 194T
From 1 April 2025 a firm deducts 10% TDS on salary, remuneration, commission, bonus or interest paid to a partner when the total exceeds ₹20,000 in the year. The credit appears in the partner's Form 26AS.
Other points
- A firm can use presumptive 44AD and file ITR-4, but an LLP cannot — LLPs always file ITR-5
- Alternative minimum tax at 18.5% of adjusted total income applies to LLPs and firms claiming certain profit-linked deductions
- Partners' returns are due on the firm's date if the firm is audited
- Co-operative societies may opt for concessional rates under section 115BAD/115BAE
Filing now
Where things stand on 11 November 2026: the original due dates of 31 July (ITR-1, ITR-2) and 31 August 2026 (non-audit business and professional cases) have passed. You can still file a belated return till 31 December 2026 (late fee under section 234F up to ₹5,000, or ₹1,000 if income is up to ₹5 lakh), and revise a filed return till 31 March 2027 (a fee applies to revisions after 31 December).
Next year: income of FY 2026-27 (Tax Year 2026-27) is taxed under the Income-tax Act, 2025, and returns for it are filed in 2027. The department notifies the forms for that year separately — the names and schedules may change, so check the form notified for Tax Year 2026-27 before filing.
Common mistakes
- Paying remuneration not authorised by the deed
- Missing 194T TDS on partner payments
- Filing ITR-4 as an LLP
Frequently asked questions
Yes. Every firm and LLP must file a return whatever its income or loss.
Last reviewed on 11 November 2026 by Vinay Jaglan, VJ & Associates. Law and portal screens change — verify before acting, or ask the office.
