Annual Compliance for Sole Proprietorship

Annual compliance for sole proprietorships in India is essential to ensure smooth operations and avoid legal penalties. A sole proprietorship, being one of the simplest forms of business, still requires adherence to various tax, regulatory, and licensing requirements. Income tax compliance involves filing annual returns by 31st July or 30th September (if audited) and paying advance tax if the liability exceeds ₹10,000. Tax audits are mandatory for turnovers exceeding ₹1 crore. GST compliance is required for businesses with turnovers above ₹40 lakh (₹20 lakh for special category states), involving filing returns like GSTR-1, GSTR-3B, and GSTR-9. E-invoicing is mandatory for businesses exceeding ₹10 crore turnover. Proper maintenance of books of accounts, including invoices, expense records, and bank statements, is crucial for at least six years.