Income tax compliance for private limited companies in India involves the following steps:
- Registering for a Permanent Account Number (PAN) and TAN: PAN is a 10-digit unique alphanumeric number required for all financial transactions and TAN is a 10-digit number required for the filing of TDS returns.
- Maintaining books of accounts: Private limited companies are required to maintain proper books of accounts, including all business transactions and receipts, and to produce them during tax assessments.
- Depositing TDS (Tax Deducted at Source): Companies are required to deduct tax at source on certain specified payments and deposit the same with the government within specified due dates.
- Filing TDS returns: Companies are required to file TDS returns in Form 24Q, 26Q, 27Q, and 27EQ, as applicable, on a quarterly basis.
- Filing of tax audit report: Companies with total sales, turnover or gross receipts exceeding Rs. 1 crore in the previous year are required to get their accounts audited by a chartered accountant and file a tax audit report in Form 3CD.
- Filing of income tax return: Private limited companies are required to file their income tax return in Form ITR 6 within the due date, which is usually 30th September of the assessment year.
- Complying with transfer pricing regulations: In case of international transactions, private limited companies are required to comply with transfer pricing regulations and file a transfer pricing report in Form 3CEB along with their income tax return.
- Complying with tax withholding requirements: Companies are required to withhold tax on specified payments such as salaries, rent, commission, professional fees, etc. and deposit the same with the government within specified due dates.
- Maintenance of records: Companies are required to maintain records for a specified period, including books of accounts, tax returns, tax audit reports, TDS certificates, etc.
- Responding to notices: In case of any discrepancies or errors, companies may receive notices from the income tax department, and it is important for the company to respond to such notices within the specified time period.
In conclusion, private limited companies in India are required to comply with various income tax regulations and filing requirements. It is important for companies to stay updated on the latest rules and regulations and to comply with them in a timely and accurate manner to avoid penalties and legal consequences