Everything You Should Know About The Tax Filing of Private Limited Company

Everything You Should Know About The Tax Filing of Private Limited Company

All the registered companies in India must file the income tax return every year. Whether it is a private limited company or a one-person company, the rule is equal for everyone. Every year, it is mandatory, before filing the annual return, the company must have an annual general meeting. If the company is newly formed, then the timeline of the meeting can be extended to 18 months from the date of incorporation or 9 months from the closing of the financial year, which comes earlier. 

The subsequent Annual General Meetings must be held within 6 months from the closing of the financial year. Generally, the financial year in India starts from 1st April and it closes on the 31st of March every year. As per that, all the company must submit their annual return on or before 30th September.   

Apart from MCA annual return, the private limited companies are bound to file the income tax return with income, profit, and loss with the help of the Chartered Accountants in Delhi. Even the dormant companies need to file the income tax return every year.

What are the tax liabilities of the private limited company?

According to the Income-tax Act, 1961, all the private limited companies whether setting up by any foreign company or national company, are considered as the domestic company and thus they need to have tax liability under the Government of India. Check out the effective tax rates of the private limited company here.

  1. Corporate Income Tax in India:
    Any company, irrespective of Indian or foreign, is liable to pay the Corporate Income Tax under the Indian Income Tax Act, 1961. For a resident company, the tax will be on worldwide income but for the non-resident company, the tax will be on the income gained from the Indian market or arises or deemed to accumulate in India only.
  2. Surcharge:
    The total tax paid by the private limited company impact the increase rate of the surcharge.
  3. Health and Education Cess:
    It will be 4 percent of the CIT and surcharge for the financial year and assessment year.
  4. Minimum Alternative Tax:
    The companies that are having minimum or no profits are all subjected to the Minimum Alternate Tax that has 18.5 percent + surcharge + health and education cess.   

What are the documents required for Private Limited company tax filing?

In the ITR return forms, there is no provision of attachment and that’s why, you don’t need to attach any kind of documents like identity proof, investment proof, bank statement, TDS certificate, etc. However, it will be better to keep all the things stored with you so that you can produce them if demanded.

What are the processes of tax filing for a private limited company?

It is very important for every private limited company to hire the CA in Delhi for the bookkeeping. This is a mandatory step not only to comply with the legal procedure but to understand the cash flow of the company.

Then you have to prepare the financial statement of the company including all the important information like financial position, performance, and changes.

Now, you have to appoint the Chartered Accountants in Delhi as the auditor to audit the financial statements.

The Annual General Meeting must be conducted before the annual return file of the Private Limited Companies.  

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