What is the tax rate for a partnership firm?

Partnership firms and LLPs are taxed at a flat rate of 30% on their total income, plus a 12% surcharge if income exceeds ₹1 crore, and 4% Health and Education Cess on tax plus surcharge. There is no basic exemption limit for firms — tax applies from the first rupee of income.

What is the Section 40(b) limit for partner remuneration?

Section 40(b) sets limits on the partner remuneration a firm can deduct as an expense. For the first ₹3 lakh of book profit or in case of a loss: ₹1.5 lakh or 90% of book profit (whichever is higher). On the balance of book profit: 60%. Remuneration above these limits is disallowed and taxed in the firm's hands.

Is interest paid to partners deductible in the firm?

Yes, interest paid to partners on their capital contribution is deductible, but only up to 12% per annum. Interest above 12% is disallowed under Section 40(b). The interest rate must be specified in the partnership deed.

What is the ITR-5 due date for firms and LLPs?

For firms and LLPs not subject to tax audit, the due date for FY 2025-26 is October 31, 2026. For those requiring tax audit under Section 44AB, the same October 31 deadline applies. The tax audit report must be filed at least one month before the ITR due date.

What is the tax rate for a partnership firm?

Partnership firms and LLPs are taxed at a flat rate of 30% on their total income, plus a 12% surcharge if income exceeds ₹1 crore, and 4% Health and Education Cess on tax plus surcharge. There is no basic exemption limit for firms — tax applies from the first rupee of income.

What is the Section 40(b) limit for partner remuneration?

Section 40(b) sets limits on the partner remuneration a firm can deduct as an expense. For the first ₹3 lakh of book profit or in case of a loss: ₹1.5 lakh or 90% of book profit (whichever is higher). On the balance of book profit: 60%. Remuneration above these limits is disallowed and taxed in the firm's hands.

Is interest paid to partners deductible in the firm?

Yes, interest paid to partners on their capital contribution is deductible, but only up to 12% per annum. Interest above 12% is disallowed under Section 40(b). The interest rate must be specified in the partnership deed.

What is the ITR-5 due date for firms and LLPs?

For firms and LLPs not subject to tax audit, the due date for FY 2025-26 is October 31, 2026. For those requiring tax audit under Section 44AB, the same October 31 deadline applies. The tax audit report must be filed at least one month before the ITR due date.

ITR-5 Filing — Firms, LLPs & AOPs

ITR-5 is for partnership firms, LLPs, AOPs (Association of Persons), BOIs (Body of Individuals), and artificial juridical persons — not individuals, HUFs, or companies. It requires detailed income computation, partner remuneration and interest workings as per the partnership deed, and full financial statements. We prepare the complete return with all schedules and file it before the October 31 deadline.

File ITR-5 for My Firm WhatsApp Us

What's Included

Everything you get when you engage BSP Associate for ITR-5 Filing — Firms, LLPs & AOPs.

Business income computation for the firm or LLP
Partner remuneration and interest on capital — Section 40(b) compliance
Full P&L and balance sheet preparation
Tax audit applicability check (Section 44AB)
Advance tax computation for firms
Schedule for share of partners in firm profits
E-filing with DSC of authorised partner

Documents Required

Have these ready before you reach out — it speeds things up considerably.

Documents You'll Need

Please arrange these before your consultation

PAN card of the firm or LLP
Partnership deed or LLP agreement (for partner remuneration and interest workings)
Audited financial statements — P&L and balance sheet
Bank statements for all firm accounts
TDS certificates (Form 16A) for TDS deducted on firm's income
Form 26AS of the firm — download from IT portal
Fixed asset register with depreciation details
Loan agreements and interest payment records

Don't have these? We'll prepare them for you.

BSP Associate can draft and file all of the following

Partner remuneration and interest on capital workings — Section 40(b)
Firm's income tax computation
Tax audit report Form 3CB and 3CD (if applicable)
Advance tax computation and payment schedule

Frequently Asked Questions

Common questions about ITR-5 Filing — Firms, LLPs & AOPs.

ITR-5 is filed by partnership firms, LLPs (Limited Liability Partnerships), AOPs (Association of Persons), BOIs (Body of Individuals), local authorities, and artificial juridical persons. Individuals and HUFs must file their own ITR forms even if they are partners in a firm.

BS Balaji

Founder & Principal Consultant

Have questions about ITR-5 Filing — Firms, LLPs & AOPs? Get a free consultation — no commitment, no jargon.

Book Free Consultation WhatsApp Us

📞 +91 91500 67799 ✉️ info@bspassociate.com

Explore More Services

73 services across 13 categories

View all

GST Filing & Advisory

End-to-end GST registration, monthly/quarterly returns, and expert advisory to keep your business fully compliant.

Get GST Help

Income Tax Return (ITR)

Accurate ITR filing for individuals, firms, and companies with maximum deductions and zero penalties.

File My ITR

Audit & Assurance

Statutory, tax, and internal audits conducted with thoroughness and delivered on time.

Schedule an Audit

Company & LLP Registration

Fast and hassle-free incorporation of Private Limited Companies, LLPs, OPCs, and more.

Accounting & Bookkeeping

Organised, accurate books maintained monthly so you always know where your business stands.

Organise My Books

TDS Filing & Compliance

Timely TDS deduction, deposit, and return filing to avoid interest and penalties.

Manage My TDS

Payroll Management

Accurate monthly payroll processing with full PF, ESI, and PT compliance built in.

Set Up Payroll

ROC / MCA Compliance

Annual filings, board resolutions, and ROC compliance handled before every deadline.

Stay ROC Compliant

View all services

View all 74 services

Get Started Today

Let's Sort Your Taxes & Compliance Together

Book a free consultation with BSP Associate and get a clear picture of your tax obligations, deadlines, and savings opportunities — no jargon, no surprises.

Book Free Consultation WhatsApp Us

✓ Free first consultation✓ No commitment required✓ Reply within 24 hours

📞 +91 91500 67799·✉️ info@bspassociate.com