How to File Income Tax Return for a Private Limited Company?

Filing the income tax returns (ITRs) is a vital responsibility for all businesses, including private limited companies in India. Ensuring that compliance with the Income Tax Act, 1961 is very important because it does not only help to avoid legal penalties but also to enhances the company’s credibility and accountability in the eyes of investors, lenders, and regulatory authorities. In this article, we’ll walk you through the entire process of income tax return filing for a private limited company, starting from private limited company registration to the actual filing procedure, compliance requirements, deadlines, and key considerations.

Understanding Private Limited Company Registration

Before diving into income tax return filing, it’s essential to understand what a private limited company is and how it is registered.

What is a Private Limited Company?

A private limited company that type of business entity which is privately held by a small group of individuals. It limits the liability of its shareholders and restricts the number of shareholders to 200. The name of such a company ends with “Private Limited” (e.g., XYZ Pvt. Ltd.).

Steps for Private Limited Company Registration

1. Obtain Digital Signature Certificate (DSC): For directors to sign documents electronically.
2. Apply for Director Identification Number (DIN): Mandatory for all proposed directors.
3. Name Approval via RUN (Reserve Unique Name) Form: Choose a unique name as per MCA norms.
4. File Incorporation Forms: Use the SPICe+ (Simplified Proforma for Incorporating a Company Electronically Plus) form on the MCA portal.
5. Obtain PAN and TAN: Automatically issued during incorporation.
6. Receive Certificate of Incorporation: Once verified by the Registrar of Companies (RoC).

Once private limited company registration is complete, the company becomes a separate legal entity and is required to comply with several statutory requirements, including income tax return filing.

Income Tax Obligations for a Private Limited Company

Every private limited company is treated as a separate taxable entity. Therefore, it is mandatory for all such companies to file an income tax return annually, regardless of their income or profit status.

Applicable Income Tax Rate

As of FY 2024–25:

• Domestic companies are taxed levy at a flat rate of 22% (under Section 115BAA) if they do not avail of any exemptions or incentives.
• An additional surcharge and cess are also applicable:

• Surcharge: 10% of income tax

• Health and Education Cess: 4% on income tax plus surcharge

Thus, the effective tax rate becomes approximately 25.17%.

Companies not opting for 115BAA and claiming exemptions/incentives are taxed at 30% plus applicable surcharge and cess.

Procedure for Income Tax Return Filing

Step 1: Maintain Accurate Books of Accounts

Before filing the ITR, ensure that the company’s financials are properly maintained and audited. The following records should be updated:

• Profit & Loss account
• Balance sheet
• Cash flow statement
• Bank statements
• Invoices and vouchers
• Tax deducted at source (TDS) details

Step 2: Get the Accounts Audited (If Applicable)

Under Section 44AB of the Income Tax Act, audit is mandatory if:

• The total turnover exceeds ₹1 crore (for business), or
• Gross receipts exceed ₹50 lakhs (for profession)

However, due to the introduction of Section 44ADA and increased threshold under Section 44AB for digital transactions, this may vary.

The audit must be conducted by the professional like Chartered Accountant and the audit report (Form 3CA/3CB and 3CD) must be filed before the ITR filing.

Step 3: Choose the Correct ITR Form

For private limited companies, ITR-6 is the applicable form.

Note: Companies claiming the exemption under Section 11 (income from property which is held for charitable or religious purposes) file ITR-7, but this rarely applies to private limited companies.

Step 4: File the Income Tax Return

1. Log in to the Income Tax e-Filing portal.
2. Navigate to e-File → Income Tax Return → File Income Tax Return.
3. Select:

• Assessment Year: (e.g., AY 2025–26 for FY 2024–25)

• ITR Form: ITR-6

• Filing type: Original or Revised Return

1. Fill in the form online or upload a pre-filled JSON file generated via utility software.
2. Attach relevant audited financial statements and schedules.
3. Validate and submit the return using the company’s Digital Signature Certificate (DSC).

Step 5: Acknowledgement

Once the ITR is successfully submitted, you’ll receive an ITR-V Acknowledgement. No further verification is required if the DSC was used.

Due Date for Income Tax Return Filing

For a private limited company:

• Without audit: 31st July of the assessment year
• With audit: 31st October of the assessment year

For example, for FY 2024–25, the due date will be:

• 31st July 2025 (if audit not applicable)
• 31st October 2025 (if audit applicable)

Consequences of Late Filing

Failing to file the return on time may result in:

• Late fees under Section 234F:

• ₹5,000 if filed after due date but before 31st December

• ₹10,000 if filed after 31st December

• Interest under Section 234A: For late payment of tax
• Loss of carry-forward of losses
• Scrutiny or notices from the Income Tax Department

Key Compliance Considerations

1. Tax Deducted at Source (TDS)

Private limited companies must deduct TDS on payments like salaries, rent, professional fees, etc., and file TDS returns quarterly.

2. Advance Tax

If the estimated tax liability exceeds the limit of ₹10,000 in a financial year, the company must pay advance tax in four instalments (June, Sept, Dec, March).

3. MAT (Minimum Alternate Tax)

If tax liability under normal provisions is less, companies may be subject to MAT at 15% on book profits under Section 115JB (not applicable if opting for Section 115BAA).

4. Reconciliation with GST Returns

Ensure that turnover, expenses, and taxes reported in GST returns align with those in the ITR to avoid scrutiny.

Benefits of Timely Income Tax Return Filing

• Avoid legal penalties and interest
• Claim refunds for excess TDS
• Maintain clean financial records
• Build credibility with banks and investors
• Enable carry-forward of business losses

Conclusion

Filing income tax returns is a critical legal obligation for every private limited company. From the moment a business completes private limited company registration, it must adhere to all statutory compliances, including income tax return filing. Following the correct and proper procedure, maintaining accurate records and data, and meeting deadlines not only keeps your company and its growth out of trouble but it also lays the foundation for sustainable growth. If in doubt, it’s always advice to consult with a Chartered Accountant or tax advisor to ensure full compliance and tax efficiency.