Sole proprietors are taxed as individuals; claim business deductions, pay advance tax if liability exceeds ₹10,000, and register for GST if turnover crosses ₹40 lakh (₹20 lakh for services).
This infographic explains sole proprietorship taxation in India. Profits are added to the proprietor’s total income and taxed as per individual slabs: 5% for ₹2.5–5 lakh, 20% for ₹5–10 lakh, and 30% above ₹10 lakh (old regime). Deduct business expenses like rent and salaries to reduce tax. Advance tax is mandatory if liability exceeds ₹10,000 in a year. GST registration is required if turnover exceeds ₹40 lakh for goods or ₹20 lakh for services, or for interstate/e-commerce sales. File ITR-3 for business income or ITR-4 for presumptive taxation. Proper books and timely compliance help avoid penalties.