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Proprietorship firms are required to file income tax return like LLPs and Companies registered in India. Since proprietorship firms are considered to be one and same as the proprietor, the income tax return filing of the proprietorship firm is the same that of the proprietor. Under Income Tax Act, all proprietors below the age of 60 years are required to file income tax return if total income exceeds Rs. 2.5 lakhs. In the case of proprietors over the age of 60 years but below 80 years, income tax filing is mandatory if total income exceeds Rs.3 lakhs. Proprietors over the age of 80 years and above are required to file income tax return if the total income exceeds Rs.5 lakhs.
An audit would be required for a proprietorship firm if the total sales turnover is over Rs.1 crore during the financial year. In the case of a professional, audit would be required if total gross receipts is more than Rs.50 lakhs during the financial year under assessment. Also, an audit would be required for any proprietorship firm under presumptive taxation scheme irrespective of turnover if the income claimed is lower than the deemed profits and gains under the scheme.
The income tax return of a proprietorship that doesn’t require audit is due on 31st July. In case the income tax return of a proprietorship needs to be audited as per Income Tax Act, then the return would be due on 30th September.
Partnership firms is among the most common types of business entity in India wherein two or more persons join together to undertake a profit for business. Under Income Tax Act, a partnership firm is defined as “Persons who have entered into a partnership with one another are called individually "partners" and collectively "a firm", and the name under which their business is carried on is called the "firm name". Partnership firms are required to file income tax return in form ITR 5 each financial year. To file the income tax return of a partnership firm, book of accounts must be maintained and tax audit may have to be obtained based on various criteria’s.
An audit would be required for a partnership firm if the total sales turnover is over Rs.1 crore during the financial year. In the case of a professional firm, audit would be required if total gross receipts is more than Rs.50 lakhs during the financial year under assessment.
LLPs in India must file its Annual Return within 60 days from the end of close of financial year and Statement of Account & Solvency within 30 days from end of six months of close of financial year. Unlike Companies, LLPs mandatorily have to maintain their financial year, as April 1st to March 31st. Therefore, LLP annual return is due on May 30th and the Statement of Account & Solvency is due on October 30th of each financial year. In addition to the MCA annual return, LLPs must also mandatorily file income tax return every year.
Form 11 contains details of the number of partners, total number of partners, total contribution received by all partners, details of body corporate as partners and summary of partners. All LLPs should file this form within 60 days from the closure of the financial year with the prescribed fee. Hence, the due date for filing LLP Form 11 is 30th of May each year.
Form 8 must be filed within 30 days from the end of 6 months of the financial year along with some prescribed fee. This must be digitally signed by 2 designated partners and it must be certified by a chartered accountant/company secretary/cost accountant. Form 8 has contains Statement of Solvency, Statement of Accounts and Statement of Income & Expenditure.
LLPs are separate legal entities. Therefore, it is the responsibility of the Designated Partners to maintain proper book of accounts and file annual return with the MCA each financial year. LLPs are not required to audit its accounts unless the annual turnover exceeds Rs.40 lakhs or if the contribution exceeds Rs.25 lakhs.
LLPs must file income tax return using Form ITR 5. Form ITR 5 can be filed online through the income tax website using the digital signature of the designated partner. The deadline for LLP tax filing in India is July 31st if tax audit is not required. LLP whose turnover exceeded Rs. 40 Lakh or whose contribution exceeded Rs. 25 Lakh are required to get their accounts audited by a practising Chartered Accountant. The deadline for tax filing for LLP required to obtain audit is September 30th.
All companies registered in India like private limited company, one person company, limited company, and section 8 company must file MCA annual return and income tax return each year. Companies must conduct an Annual General Meeting at the end of each financial year and file an annual return with the Ministry of Corporate Affair to maintain compliance. For newly incorporated Companies, the Annual General Meeting should be held within 18 months from date of incorporation or 9 months from the date of closing of financial year, whichever is earlier. Subsequent Annual General Meetings should be held within 6 months from the end of that financial year. In India, normally the financial year starts on April 1st and end on 31st March. So a Company's annual return would be due on or before September 30th. Annual return consists of information and documents that include the Balance Sheet of the Company, Profit & Loss Account, Compliance Certificate, Registered Office Address, Register of Member, Shares and Debentures details, Debt details and information about the Management of the Company. The annual return would also disclose the shareholding structure of the Company, changes in Directorship and details of transfers of securities. In addition to MCA annual return, companies must also file income tax return irrespective of income, profit or loss. Hence, even dormant companies with no transactions are required to file income tax return each year. Private limited companies, limited companies and one person companies would be required to file Form ITR -6. The due date for filing income tax return for a company is on or before the 30th of September.
Foreign subsidiary companies are mandatorily required to maintain compliance as per Income Tax Act, Companies Act, transfer pricing guidelines and FEMA guidelines. Hence, maintaining compliance for a foreign subsidiary company would includes filing of income tax return with the Income Tax Department, annual return with the Ministry of Corporate Affairs and other filings with authorities like Reserve Bank of India or Securities & Exchange Board of India (SEBI). Finally, like all companies, foreign subsidiaries would also have to comply with other Indian tax regulations like TDS regulations, GST regulations, ESI regulations and others. The compliance requirement for a foreign subsidiary company would vary based on the industry, state of incorporation, number of employees and sales turnover.
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