What is a Private Limited Company?

A Private Limited Company functions as a separate entity when registered under the provisions of the Companies Act 2013. The Private Limited Company operates under MCA regulations while fulfilling obligations of both Companies Act and Income Tax Act requirements.

Income Tax Applicability on Private Limited Companies

Every Private Limited Company is required to file an Income Tax Return (ITR) irrespective of whether it made a profit or incurred a loss during the financial year. Submissions of the ITR need to be directed towards the Income Tax Department of India.

ITR Forms Applicable to Private Limited Companies

• ITR-6: Used by companies other than those claiming exemption under section 11 (i.e., not charitable or religious trusts).

• ITR-7: Applicable if the company is registered under Section 8 (non-profit organizations).

Key Points About Filing ITR for Private Limited Companies

Documents Required for Filing ITR

• PAN of the Company

• Certificate of Incorporation

• Audited Financial Statements

1. Profit & Loss Account
2. Balance Sheet
3. Cash Flow Statement

• Tax Audit Report (if applicable u/s 44AB)

• Details of TDS deducted (Form 26AS)

• Bank Statements

• Director and Shareholder Details

• Digital Signature Certificate (DSC) of an authorized director

Types of ITR Forms for Companies

• ITR-6: Used by companies other than those claiming exemption under section 11 (like charitable organizations).

• ITR-7: Applicable only to certain charitable or religious trusts, not typical Private Limited Companies.

Tax Audit Requirements

Section 44AB mandates tax audit if

• The criterion for commercial business entities to qualify for tax benefits is reaching total sales or gross receipts above ₹1 crore.

• For professionals, if receipts exceed ₹50 lakhs

• For companies under presumptive taxation, if income claimed is lower than deemed income

The audit report (Form 3CA/3CB and 3CD) must be submitted online.

Process of Filing ITR for Private Limited Company

• Prepare Financial Statements: Finalize your accounts with the help of a CA.

• Get Tax Audit Done (if applicable): All taxpayers must file income tax returns when turnover exceeds ₹1 crore or their income falls under the selected presumptive income schemes.

• Compute Tax Liability: Perform Tax Liability Calculation by applying existing tax rates and incorporating MAT together with surcharge and cess.

• File Income Tax Return (ITR-6): To file ITR-6 users should access the Income Tax e-filing portal at https://www.incometax.gov.in/.

• Verify ITR using DSC: Mandatory for companies.

• Keep Acknowledgement for Record: Download ITR-V (acknowledgment) for compliance and future reference.

Penalty for Late Filing

• Penalties amount to ₹5,000 when the late filing takes place between the due date and 31st December.

• ₹10,000 if filed after 31st December.

• Interest under Section 234A, 234B, and 234C may also apply.

• Carrying forward losses is not possible if there has been any delay in filing tax returns.

Tax Planning Tips for Private Limited Companies

• Businesses should use depreciation deductions in addition to preliminary expense and R&D expense reductions.

• Candidates should choose presumptive taxation benefits in addition to available concessional tax rates.

• To prevent expense disallowance file TDS returns according to the quarterly schedule.

• Following proper regulatory filings under GST and ROC and other requirements will prevent notices from the authorities.

Other Mandatory Compliances for Private Limited Companies

• Annual Filing with MCA (Form AOC-4, MGT-7)

• GST Returns (if registered)

• Businesses need to present their Tax Audit reports through Form 3CA/3CB and 3CD to the Income Tax Department.

• Board Meetings & AGM compliance

• Director KYC (DIR-3 KYC)

Conclusion

Private Limited Companies must perform ITR filing because it serves as an essential requirement for financial management along with preserving investor confidence and supporting future business operations. Absolute compliance with the law together with optimized tax events relies on timely and accurate tax filings by your business.

Disclaimer

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