A partnership firm is required to file its Income Tax Return annually, regardless of whether it earns income or incurs a loss. The applicable form for filing is ITR-5. The firm is taxed at a flat rate of 30% plus applicable surcharge and cess. Additionally, the firm can claim deductions for remuneration and interest paid to partners, provided these are authorized by the partnership deed and fall within prescribed limits under the Income Tax Act. Audit under Section 44AB is mandatory if the turnover exceeds ₹1 crore (or ₹10 crores in certain digital transaction cases).
Conclusion: Timely and accurate ITR filing helps partnership firms remain compliant with tax laws and avail eligible deductions while ensuring transparency in financial reporting.