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Private Limited Company Tax Filing

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What is annual tax filing for Private Limited Companies?

Private Limited Companies in India are governed by the Companies Act, 2013 in conjunction with Income Tax Act, 1961 for their annual compliances.

All private limited companies in India must mandatorily submit their returns for every financial year.

Process of tax filing for private limited companies

Whether a business is registered as a One Person Company, Private Limited Company, or even a Section 8 company, there are annual and tax compliances to be followed.

A private limited company must file its income tax returns irrespective of whether it has any income or not, or profit or loss.

The entire year ending tax filing and compliance process must include the following steps:

  1. Preparation of the financial statements of the company
  2. Appointment of Auditor, if not already appointed.
  3. Statutory Audit of the Financial Statements of the Company.
  4. Tax Audit of Statements (if applicable)
  5. Annual General Meeting where the financial statements are placed before the members of the company
  6. The Annual return filing with the Ministry of Corporate Affairs (MCA) as well as the Income Tax Department.

Which ITR is applicable to private limited companies?

Any Indian private limited company must file an ITR 6 unless it is claiming exemptions u/s 11.

ITR 7 is applicable for private limited companies that are furnishing returns u/s 139(4A), 139(4B), 139(4C), 139(4D).

Slab rates applicable to private limited companies

Condition Tax Rate excluding Surcharge and Cess
If gross receipts in the previous year is less than Rs. 400 crores 25%
If opting for Section 115BA 25%
If opting for Section 115BAA 22%
If opting for Section 115BAB 15%
Any other Domestic Company 30%

However, certain surcharges also apply based on certain conditions:

Conditions Surcharge
Taxable income is between Rs. 1 crore - Rs. 10 crores 7%
Taxable income is above Rs. 10 crores 12%
If the company is opting for taxability u/s 115 BAA or u/s/ 115BAB 10%

Furthermore, a health and education cess of 4% is applicable on the amount of income tax plus surcharge (if any).

A company is also liable to pay a Minimum Alternate Tax (MAT) of 15% on the book profits when the normal tax liability ends up being less than 15%. A surcharge (if applicable) and health and education cess will be applicable over and above the MAT.

MAT may be lower or not applicable in certain circumstances such as when income is derived solely from convertible foreign exchange or when a company has opted for filing returns u/s 115BAA or u/s 115BAB.

Deductions

Through Chapter VI-A private limited companies can enjoy deductions under the following sections:

80G 80GGA 80GGB 80IA 80IAB
80IAC 80IB 80IBA 80IC 80IE
80JJA 80JJAA 80LA 80M 80PA

However, companies opting to file their returns u/s 115BAA or u/s 115BAB will not be allowed certain deductions.

Due Dates

Form Due Date
Filing of income tax return i.e. ITR 6 30th September
Filing the Financial Statements along with the Director’s Report and Other documents to the MCA i.e. AOC-4 Within 30 days of holding the AGM to finalize statements
Annual Return to the MCA i.e. MGT - 7 Within 60 days of holding the AGM to finalize statements

There can be a penalty of Rs. 200/day if the AOC-4 is not filed on time.

Documents Required

While filing ITR 6 no additional supporting documents are required to be filed.
However, in order to calculate the returns and prepare and fill other compliance forms, the following comprehensive list is required.

For Calculating Returns

  • Finalised & Audited Profit & Loss Statement & Balance Sheet
  • Form 26AS
  • Form 16A and other TDS Certificates
  • Details of any deductions taken
  • Details of depreciation working

Other Documents

  • Tax Audit Report (if applicable)
  • Details of Bank Accounts including IFSC code etc
  • PAN Card Details
  • Balance Sheet Annexures details Director’s Shareholding
  • Class 3 Digital Singature Certificates for Director(s)
  • Exemption Proofs if any

For MGT - 7

  • List of debenture holders and investors
  • Approval letter for the extension of the the AGM
  • MGT-8 if applicable
  • Other optional attachments if any

For AOC - 4

  • Audited Financial Statements which include Profit & Loss Statement, Balance Sheet & Cash Flow Statement. All with notes
  • Statements in change in equity (if any)
  • Auditor Report
  • Report from the Board of Directors
  • Corporate Social Responsibility Report (if any)
  • AOC - 1, Statement of Subsidiaries (if any)
  • Other relevant documents

FAQs

  1. Is it compulsory to get an audit done for a private limited company?
  2. What is the difference between ROC compliance and Income Tax compliance?
  3. Is an Annual General Meeting (AGM) compulsory?
  4. Is AGM applicable to One Person Company (OPC)?

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What is annual tax filing for Private Limited Companies?

Private Limited Companies in India are governed by the Companies Act, 2013 in conjunction with Income Tax Act, 1961 for their annual compliances.

All private limited companies in India must mandatorily submit their returns for every financial year.

Process of tax filing for private limited companies

Whether a business is registered as a One Person Company, Private Limited Company, or even a Section 8 company, there are annual and tax compliances to be followed.

A private limited company must file its income tax returns irrespective of whether it has any income or not, or profit or loss.

The entire year ending tax filing and compliance process must include the following steps:

  1. Preparation of the financial statements of the company
  2. Appointment of Auditor, if not already appointed.
  3. Statutory Audit of the Financial Statements of the Company.
  4. Tax Audit of Statements (if applicable)
  5. Annual General Meeting where the financial statements are placed before the members of the company
  6. The Annual return filing with the Ministry of Corporate Affairs (MCA) as well as the Income Tax Department.

Which ITR is applicable to private limited companies?

Any Indian private limited company must file an ITR 6 unless it is claiming exemptions u/s 11.

ITR 7 is applicable for private limited companies that are furnishing returns u/s 139(4A), 139(4B), 139(4C), 139(4D).

Slab rates applicable to private limited companies

Condition Tax Rate excluding Surcharge and Cess
If gross receipts in the previous year is less than Rs. 400 crores 25%
If opting for Section 115BA 25%
If opting for Section 115BAA 22%
If opting for Section 115BAB 15%
Any other Domestic Company 30%

However, certain surcharges also apply based on certain conditions:

Conditions Surcharge
Taxable income is between Rs. 1 crore - Rs. 10 crores 7%
Taxable income is above Rs. 10 crores 12%
If the company is opting for taxability u/s 115 BAA or u/s/ 115BAB 10%

Furthermore, a health and education cess of 4% is applicable on the amount of income tax plus surcharge (if any).

A company is also liable to pay a Minimum Alternate Tax (MAT) of 15% on the book profits when the normal tax liability ends up being less than 15%. A surcharge (if applicable) and health and education cess will be applicable over and above the MAT.

MAT may be lower or not applicable in certain circumstances such as when income is derived solely from convertible foreign exchange or when a company has opted for filing returns u/s 115BAA or u/s 115BAB.

Deductions

Through Chapter VI-A private limited companies can enjoy deductions under the following sections:

80G 80GGA 80GGB 80IA 80IAB
80IAC 80IB 80IBA 80IC 80IE
80JJA 80JJAA 80LA 80M 80PA

However, companies opting to file their returns u/s 115BAA or u/s 115BAB will not be allowed certain deductions.

Due Dates

Form Due Date
Filing of income tax return i.e. ITR 6 30th September
Filing the Financial Statements along with the Director’s Report and Other documents to the MCA i.e. AOC-4 Within 30 days of holding the AGM to finalize statements
Annual Return to the MCA i.e. MGT - 7 Within 60 days of holding the AGM to finalize statements

There can be a penalty of Rs. 200/day if the AOC-4 is not filed on time.

Documents Required

While filing ITR 6 no additional supporting documents are required to be filed.
However, in order to calculate the returns and prepare and fill other compliance forms, the following comprehensive list is required.

For Calculating Returns

  • Finalised & Audited Profit & Loss Statement & Balance Sheet
  • Form 26AS
  • Form 16A and other TDS Certificates
  • Details of any deductions taken
  • Details of depreciation working

Other Documents

  • Tax Audit Report (if applicable)
  • Details of Bank Accounts including IFSC code etc
  • PAN Card Details
  • Balance Sheet Annexures details Director’s Shareholding
  • Class 3 Digital Singature Certificates for Director(s)
  • Exemption Proofs if any

For MGT - 7

  • List of debenture holders and investors
  • Approval letter for the extension of the the AGM
  • MGT-8 if applicable
  • Other optional attachments if any

For AOC - 4

  • Audited Financial Statements which include Profit & Loss Statement, Balance Sheet & Cash Flow Statement. All with notes
  • Statements in change in equity (if any)
  • Auditor Report
  • Report from the Board of Directors
  • Corporate Social Responsibility Report (if any)
  • AOC - 1, Statement of Subsidiaries (if any)
  • Other relevant documents

FAQs

  1. Is it compulsory to get an audit done for a private limited company?
  2. What is the difference between ROC compliance and Income Tax compliance?
  3. Is an Annual General Meeting (AGM) compulsory?
  4. Is AGM applicable to One Person Company (OPC)?