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How to Pay GST in India for a Sole Proprietorship

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What is a Sole Proprietorship?

Sole Proprietorship comes under the company registration. It is the business that legitimately exists because of the owner. All the assets and liability are owners' matter that is Profits and losses are taxed on the individual's Tax Returns. 


Who can opt for Sole Proprietorship?

A person who has less investing plans that means he has less money to invest in the business can go with the option with Sole Proprietorship because he will be the sole head in the company and all the decisions will be made by him/her. 


What are the Advantages?

Your Decisions are Independently yours to make, no interference

You are the owner and with zero interference only its decision that will affect or get implemented into your business.


Easy Formation and dissolution 

The endowment of a proprietorship is an easy process Unquestionably but the process varies because of the country, state, or locality.


High flexibility in management 

It's 100% owner choice to make decisions for the kind of business he/she is investing in with maximum privacy.


Tax advantages

Unlike other organizations, the owner is taxed only once. He/she pays only the personal income tax that too on the profits earned by the entity. The entity itself does not have to pay income tax.



What are the disadvantages?

  • Unlimited liability of the owner 

Since a sole proprietorship depends on a single person decision so if the management gets loose in handling the business a bundle of liabilities arise.


  • Challenges in raising the capital rise 

The chances to get a loan from a bank depends on the owners' credit history as there are no partners so the capacity to raise capital is limited.


  • Hiring high-calibre employees can be challenging.

Due to single raising, it gets difficult for a small set up to provide the desired salaries to the employees and hiring high-pay employee limits the profits. 



How to register as a sole proprietorship?

To register for the sole proprietorship, one must have a PAN Card, Name of the business, Bank account number and few more registration such as shop and establishment license and GST number, etc.

You can also opt for GST Suvidha centre for the same and even more such as GST registration, run filing, Accounting, Balance Sheet, Etc. 


Documents Required:

  1. Utility Bill of the business place
  2. KYC documents of the Bank
  3. A license by the Shops and Establishment Act
  4. ITRs of the Proprietor


What are the Compliances required?

1. As a sole owner, you must file ITR yearly.

2. You must file GST Return regularly.

3. A sole proprietor should also deduct TDS and file TDS return if liable for Tax Audit.






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