Income Tax Return (ITR) is a form where taxpayers (Individuals and businesses) submit information about their income and tax payments to the income tax department of India. A Taxpayer should file for ITR before its due date (Generally, it is 30th September of every year).
Filing for income tax returns by businesses is mandatory in India. All the business entities are required to file for ITR irrespective of being small or big, have to file for ITR returns every year.
A business tax return is nothing but a statement of income earned and expenditure of the business. If the business posts some profits, tax needs to be paid on the profits. Tax returns filed by a business, also have details on the business asset and liabilities.
For companies, firms and Limited Liability Partnership (LLPs) income tax return needs to be filed irrespective of profit or loss. Even if such businesses have undertaken no operations, a return needs to be filed.
Below is the list of ITR forms applicable for businesses
- ITR-3: This form is for Individuals and HUFs Who have income from a proprietary firm or through carrying a profession. This form needs to be filed by individuals whose income source is any one, more or all of below.
- Business or profession
- If you are director in a company
- If you have investment in unlisted equity shares in that financial year
- Income from House property, Salary/Pension, capital gain and Income from other sources
- Income of a person as a partner in the firm.
- ITR-4 or Sugam: This form is for Individuals, HUF’s and Partnership firms (Not LLP) Which are residents having income from business or profession. It also includes those who have opted for the presumptive income scheme. This form needs to be filed by individuals whose income source is any one, more or all of below.
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- Total income exceeds 50 Lakh.
- Income from more than one house property.
- Owning any foreign assets.
- Having signing authority in any account located outside India.
- If you are a director in a company.
- If you have investment in unlisted equity shares in that financial year.
- Being a Non-Resident or Resident not ordinary resident.
- If you have any brought forward loss or loss to be carried forward under any head of income.
- If you are assessable, In respect to income of another person in which tax is deducted in the hands of the other person.
Advantages of Filing ITR Returns for Corporates
- Easy Loan Approval: Filing income tax returns makes it easier for corporates to obtain loans, such as for housing or vehicles. Most major banks require copies of tax return filings as part of the loan application process.
- Carry Forward Losses: Timely filing of ITR returns allows corporates to carry forward losses to future years. These losses can be offset against future income, reducing tax liability in subsequent years.
- Proof of Income and Address: Income tax return documents serve as valid proof of income and address for corporates. They can be used for various purposes, such as opening bank accounts, applying for visas, or participating in government tenders.
- Avoidance of Penalties: Failure to file ITR returns can result in penalties imposed by tax authorities. The penalty can be up to Rs 10,000. Additionally, late filing of returns may lead to interest charges. Filing ITR on time helps corporates avoid penalties and any associated financial burden.
By filing ITR returns, corporates can enjoy these benefits, ensuring compliance with tax regulations and facilitating various financial transactions.
Simplified Checklist/Requirements for filing ITR returns:
- Name of the company
- Email address
- CIN (Corporate Identification Number) of the company
- Company address
- If there has been a change in the company’s name, provide the old name
- Date of incorporation
- Date of commencement of business
- Mobile number
These are the essential details and documents needed to file ITR returns for a company.
Process of filing ITR returns for corporates:
- Provide the necessary information and required documentation.
- Verify the documents and sources of income.
- Calculate the Income Tax liability.
- File the Income Tax Returns.
List of key deliverables:
- ITR Acknowledgement
- E-forms
- Challans
What do you want to know?
Having a GST number has got nothing to do with filing an I-T return. A return of Income is required to be filed when there is any taxable income. If you have any income other than business income (as you have said that you have no business income). You may file return in Form ITR-1 or ITR-2 depending upon the source of your income.
Yes, you can. You need to have all the proofs of expenses like tickets, hotel charges, etc.
If you have closed your business in the current financial year then yes you will have to file for ITR returns for this current financial year. Along with the other filings such as ROC etc. and then you will have to surrender the PAN of the company.
You’ve got Income from business, so you can only file ITR 3 or ITR 4. Generally, the advice is to file ITR 4, since it allows presumptive taxation under Section 44AD. But if you’ve got capital gains or losses, you can’t file ITR 4. Also, if your turnover is above the audit limit, you can’t file ITR 4.