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Proprietorship Compliance

  • Ensures uninterrupted business operations without regulatory interruptions
  • Strengthens credibility with banks, vendors, and government authorities
  • Enables smooth access to loans, credit facilities, and government schemes
  • Enhances long-term business sustainability and scalability Protects the proprietor from penalties, interest, and prosecution risks
  • Facilitates accurate income reporting and tax planning
  • Supports transparent financial management and audit readiness
  • Enhances long-term business sustainability and scalability

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Experience Icon

7 Years

Of Experience

Cases Solved Icon

3622 +

Cases Solved

Awards Gained Icon

10 +

Awards Gained

Trusted Clients Icon

144 k +

Trusted Clients

Queries Solved Icon

36 k+

Queries Solved

Experience Icon

7 Years

Of Experience

Cases Solved Icon

3622 +

Cases Solved

Awards Gained Icon

10 +

Awards Gained

Trusted Clients Icon

144 k +

Trusted Clients

Queries Solved Icon

36 k+

Queries Solved

Experience Icon

7 Years

Of Experience

Cases Solved Icon

3622 +

Cases Solved

Awards Gained Icon

10 +

Awards Gained

Trusted Clients Icon

144 k +

Trusted Clients

Queries Solved Icon

36 k+

Queries Solved

Overview

A Proprietorship is the simplest form of business ownership in India, where the business and the proprietor are legally inseparable. Despite its ease of formation, a proprietorship is subject to multiple statutory, tax, and regulatory compliances during Financial Year 2025–26 (Assessment Year 2026–27). These compliances are primarily governed by the Incometax Act, 1961, the Goods and Services Tax laws, and applicable labour and local laws, depending on the nature and scale of operations.
For FY 2025–26, proprietors must operate within a fully digitised compliance ecosystem.
The Income Tax Department’s faceless assessment regime, GSTN portal-based filings, and
data-sharing mechanisms across authorities require precise, timely, and accurate
disclosures. While the Ministry of Corporate Affairs (MCA) V3 portal is not directly
applicable to proprietorships, proprietors interacting with MCA-registered entities must ensure consistency between tax filings, GST returns, and financial records to avoid data mismatches and scrutiny.
A critical requirement applicable from 1 April 2025 onward is the mandatory use of accounting software with an audit trail (edit log) for businesses subject to tax audit under Section 44AB. This requirement continues through FY 2025-26 and applies equally to eligible proprietors. Such systems reinforce data integrity by maintaining immutable logs of all accounting changes, aligning with the government’s emphasis on traceability and transparency.
Regulatory philosophy has evolved from mere compliance to compliance-as-a-growthenabler. Accurate filings, reconciled GST returns, and disciplined tax reporting enhance a
proprietor’s financial reputation, reduce audit exposure, and enable smoother expansion into partnerships, LLPs, or companies in the future. Proprietorship compliance in FY 2025–26 is therefore not optional hygiene but a foundational business asset supporting resilience, trust, and scalability in an increasingly formalised economy.

Documents Required

Documents
  • 1 PAN Card
  • 2 Aadhaar Card
  • 3 Proprietor’s Bank Account Statement
  • 4 Books of Accounts
  • 5 Sales and Purchase Invoices
  • 6 GST Returns and Challans
  • 7 TDS Challans and Returns
  • 8 Audit Report (if applicable)
  • 9 Proof of Business Address

For More Information


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2nd Floor, Sanali Estate, Abids, , Hyderabad, Telangana , 500001, IN

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Updated quarterly to align with the latest regional legal standards.

Mandatory Compliance (FY 2025–26)

Compliance Name Short Description (including Section/Rule references) Specific 2026 Due Date
Income Tax Return (ITR-3 / ITR-4) Annual income disclosure under the Income-tax Act, 1961 31 July 2026 (non-audit) / 31 October 2026 (audit case)
Tax Audit (if applicable) Audit under Section 44AB for turnover thresholds 30 September 2026
GST Annual Return (GSTR-9) Annual GST summary under CGST Act 31 December 2026
GST Reconciliation Statement (GSTR-9C) Reconciliation of audited financials with GST returns 31 December 2026
TDS Return (if applicable) Quarterly TDS filing under Chapter XVII-B 31 May 2026 (Q4)
Advance Tax Payment Tax payment under Sections 207–211 15 March 2026

Applicable Compliance (Event-based / Conditional)

Compliance Name Short Description (including Section/Rule references) Specific 2026 Due Date
GST Registration Amendment Update changes in business particulars Within 15 days of change
GST Cancellation / Surrender Closure or discontinuance of business Within 30 days of event
Professional Tax Return State-specific compliance As per state notification (2026 cycle)
Shops & Establishment Renewal Renewal under state S&E laws As per respective state due date
MSME Registration Update Updating Udyam details if applicable As and when changes occur

Penalty and Non-compliance Risk

Income-tax penalty
Interest on late payment
GST late fees
GST registration cancellation
Disallowance of expenses
Prosecution proceedings
Increased scrutiny and audits

FAQs

1. Is proprietorship compliance mandatory even for small businesses?

Yes. Compliance obligations apply regardless of size, subject to threshold-based relaxations

2. Which ITR form is applicable to proprietors for FY 2025–26?
3. When is tax audit compulsory for a proprietor?
4. Is GST registration mandatory for all proprietorships?
5. Is audit-trail-enabled accounting software compulsory in FY 2025–26?
6. What happens if I miss the ITR filing deadline?
7. Can a proprietor opt for presumptive taxation every year?
8. Is GSTR-9 mandatory for all GST-registered proprietors?
Are bank accounts required to be in the business name?
10.Can non-compliance lead to GST registration cancellation?
11.Does a proprietorship require DIN or MCA filings?
12.Can poor compliance affect loan or funding approvals?

Seamless Compliance for Your Business

Focus on growing your business while we handle the complexities of statutory compliance. From GST filing to Annual Audits, our automated systems ensure you never miss a deadline.

CA
  • GST Filing & Reconciliation
  • Income Tax Returns (ITR)
  • TDS/TCS Returns
  • Statutory & Tax Audit
  • ROC Company Filings

What Our Clients Say

Discover what our satisfied clients have to say about their experience working with us

Sandeep Reddy
Founder, Retail Trading Business
" ARK Advisors made our audit process smooth and stress-free. Clear checklist, timely follow-ups, and very practical guidance. "
Anusha Sharma
Partner, Professional Services Firm
" Their team quickly identified compliance gaps and suggested actionable fixes. Reporting was crisp and easy for management to understand. "
Rohit Kulkarni
CFO, Manufacturing Unit
" We got strong process recommendations and control improvements. The audit insights genuinely helped us reduce leakage and improve discipline. "
Meghana Rao
Director, Startup
" Professional, responsive, and very transparent. They explained everything in simple terms and kept the entire process on schedule. "
Imran Khan
Owner, Hospitality Business
" The team ensured our documentation was audit-ready and supported us throughout. Great experience and strong attention to detail. "

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