In this Article, MyOnlineCA will let you know about LLP Taxation and How to work LLP Taxation. A Limited Liability Partnership (LLP) is a corporate entity which formed under LLP act 2008. It is a separate legal entity. It is a type of partnership that offers limited liability protection for the partners. As per Income Tax laws, an LLP must file income tax return each year, and it will be treated as partnership firms.

LLP Taxation: How LLP Taxation Works


LLP Taxation

According to Income Tax Law, it is essential to file tax for every Limited Liability Partnership every year. As per section 2(23) of Income Tax Act which talks about the definition of a firm, it says that the meaning of firm shall include partnership and Limited liability partnership act. So taxation of LLP will be calculated as Firm.

Computation of Income

You have to calculate your income before tax filing. You have to consider all type of income as income from house property (if any property owned by LLP firm and received rent from that), capital gains from LLP and other sources (e.g., Interest on investment). So you have to calculate all type of income then you have to deduct your expenses. In deduction, you can include fees which are allowed for deduction, loss from business, payment of interest on a loan and other deduction. After deducting deduction from income, you will get your taxable income.

Tax Rate

Every LLP shall be liable to pay tax at the rate of 30% on its income. If you are running a limited liability partnership firm, then you will have to pay 30% tax on your taxable income.

Surcharge- According to Income Tax Law, if the salary is more than one crore rupees, then you have to pay 10% more surcharge. However, the surcharge shall be subject to limited relief (the total amount payable as income-tax and tax shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of revenue that exceeds one crore rupees).

Health and education Cess – the amount of income tax and the surcharge will increase further by Health and education cess. You will have to pay 3% for health and education cess.

Tax Filing

You can pay your tax by offline and online mode.  Online mode of tax filing is straightforward and easy. You have to follow given below steps.

  • You have to visit this website
  • Then you have to select relevant challan,
  • Then you have to enter necessary details which are required by challans like PAN and TAN details, personal and professional details, your bank details and other required details.
  • After submission of all features, a confirmation screen will display. Where you can check you all the details, then you have to confirm it.
  • After confirmation, net banking site will open on your screen
  • Then you have to log in your bank account and have to pay
  • After successful payment of challan, counterfoil will be displayed containing CIN, and this will prove of payment being made.

Due Dates

For the filing of LLP annual return where LLP is required to get its account audited under the Income tax act, for this due date for every financial year is 30th September.  If a firm is required to furnish a report under section 92E then due date 30th November. And in any other case, the due date is 30th July for every financial year.

Conclusion for LLP Taxation: How LLP Taxation Works

As you can see that Tax filing is significant for an LLP in case of failure, you may have to pay a heavy penalty on it. Tax filing for an LLP considered as firm and for a firm you have to pay 30% tax on your taxable income. If your income is more than one crore, then you have to addition surcharge on it on the rate of 10%. It has to do on or before the due date. The process of tax filing is simple, you can pay your tax through online mode, and the method as above mentioned. If you are running an LLP, then you should file your charge before the due date.