Partnership firms are required to file Income Tax Returns (ITR) annually under the Income Tax Act, 1961. The return reports the firm’s income from business or profession, allowable expenses, and deductions to determine taxable income. The firm itself is taxed at a flat rate on its profits, while partners are not taxed separately for their share of profits distributed by the firm. Filing ITR is mandatory for all partnership firms, regardless of profit or loss, and ensures compliance with statutory provisions. The appropriate form, typically ITR-5, must be filed electronically, and if the firm’s turnover exceeds prescribed limits, a tax audit may also be required. Timely filing avoids penalties, interest, and potential scrutiny from tax authorities. Professional assistance is recommended for preparing financial statements, reconciling accounts, applying eligible deductions, and e-filing the return using the firm’s digital signature certificate (DSC). Proper compliance strengthens governance, maintains transparency in financial operations, and ensures uninterrupted business activities without legal or tax-related disruptions.