ITR 6 - Company Income Tax Filing
Establishing a business comes with its own set of challenges, and navigating the complexities of filing returns is a vital aspect of successful operations. ITR-6 filing is a key annual compliance requirement for companies in India. Accurately filing ITR-6 on time is crucial for ensuring compliance with the Income Tax Act 1961, helping businesses avoid penalties and potential legal complications.
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ITR 6 Applicability
ITR 6 applies to all companies except those claiming an exemption under Section 11 of the Income Tax Act. Section 11 applies to income derived from property held under a trust or legal obligation for charitable or religious purposes. Therefore, companies with income used for charitable or religious purposes are not eligible to file ITR 6.
Applicable Entities
Companies registered under the Companies Act of 2013 or the Companies Act of 1956 are required to file the ITR 6 Form. This includes:
- Private Limited Company
- One Person Company
- Public Limited Company
Who is Not Eligible to File the ITR 6 Form?
The following entities are not eligible to file the ITR 6 Form:
- Individuals
- Hindu Undivided Family (HUF)
- Firms
- Associations of Persons (AOP)
- Bodies of Individuals (BOI)
- Local Authorities
- Artificial Judicial Persons
- Companies that seek exemption under section 11 of the Income Tax Act.
ITR 6 Due Date
Every company is required to file its Income Tax Return under Section 139 of the Income Tax Act by October 31st of the assessment year. If transfer pricing is involved, such a company is required to file its Income Tax Return by November 30th of the assessment year.
The Importance of Timely ITR Filing for Companies
Filing ITR 6 on or before the due date not only ensures compliance with tax laws but also offers several financial and operational advantages for your business.
- Carry Forward of Losses: Filing on time allows a company to carry forward its losses for adjustment against future profits. According to Section 72 of the Income Tax Act, companies can carry forward business losses up to 8 subsequent assessment years. Failure to file on time results in losing this right, negatively impacting the company’s financial position.
- Avoiding Penalties and Interest: Late filing incurs a fee under Section 234F of the Income Tax Act. Additionally, timely filing helps avoid interest charges on any outstanding tax liabilities under Sections 234A, 234B, and 234C.
- Reduced Risk of Scrutiny: Timely filing minimizes the risk of scrutiny by tax authorities. Late submissions can raise red flags, potentially leading to notices and further examinations by the tax department.
- Quicker Refund Processing: Filing your income tax return on time facilitates faster processing of tax refunds from the income tax department.
- Enhanced Credit Opportunities: Timely filed tax returns are often required by banks and financial institutions as part of loan and credit facility applications. Demonstrating compliance and financial stability can improve the chances of securing credit.
- Smoother Winding-Up Process: If a company decides to cease operations, having all Income Tax returns filed on time is essential for a smoother and quicker winding-up process.
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Structure of ITR 6 Form
ITR 6 is divided into Part A and Part B ( along with the subsections) with multiple schedules that include information relevant to the income and tax of the taxpayer. Let us have a detailed look at this.
Part A (and its subsections)
- General information: This Subsection should be filled out with the basic details of the entity, such as the name, PAN number, address, CIN, incorporation date, etc.
- Trading Account: This subsection requires details that are relevant to the company's income and expenditures.
- Balance sheet: This subsection should consist of the company's details, such as liabilities, current liabilities, share capital, and more.
- Manufacturing account: This Subsection requires the figures for manufacturing the accounts relating to the inventory, such as opening stock, closing stock, and cost of the goods that are produced.
- Profit and Loss Account: This subsection should be filled with the details of the company's profit or the loss that is incurred during the relevant financial year.
Part B (and its subsections)
- Part B-TI: Computation of Total Income
- Part B-TTI: Computation of tax liability for the total income.
Schedules | Purpose |
| Schedule –HP | For computing incomes under the head Income from House Property |
| Schedule –BP | For computing incomes under the head “profit and gains from business and profession |
| Schedule –DPM | For calculating depreciation on plant & machinery |
| Schedule –DOA | For a summary of depreciation on all assets |
| Schedule –DCG | For calculating the deemed capital gain on the sale of depreciable assets |
| Schedule –ESR | Deductions u/s 35, i.e. expenditure on scientific research |
| Schedule –CG | For calculating income under the head “Capital gains.” |
| Schedule –OS | For calculating income from other sources |
| Schedule –CYLA | Calculating the income after setting off the current year's loss |
| Schedule –BFLA | Calculation of income after setting off the unabsorbed loss of the previous year |
| Schedule –CFL | Statement of loss for carrying forward to a further year |
| Schedule –UD | Statements of unabsorbed depreciation and allowance |
| Schedule –ICDS | Income computation disclosure standards on profit |
| Schedule –10AA | Deductions u/s 10AA |
| Schedule –80G | Details of deduction u/s 80G relating to donations |
| Schedule –80 GGA | Statement of donations for scientific research and rural development |
| Schedule –VIA | Statement of deductions from total income under Chapter VI-A |
| Schedule –SI | Details of income chargeable at special tax rates |
| Schedule –PTI | Details relating to passing through income from business trust or investment fund |
| Schedule –EI | Statement of exempted incomes |
| Schedule –MAT | Details of tax payable u/s 115JB (Minimum Alternate Tax) |
| Schedule –DDT | statement of tax paid on dividend, i.e. “dividend distribution tax” |
| Schedule –BBS | Details of tax distributed income on buyback of shares |
| Schedule –ESI | Statement of foreign incomes and tax relief to it |
| Schedule –IT | Details on advance-tax paid and self-assessment tax |
| Schedule –TDS | Details of TDS on incomes other than salaries |
| Schedule –TCS | Statement of TCS (Tax collected at source) |
| Schedule –FSI | Statement of income accruing outside India |
| Schedule –TR | Details of tax relief claimed for foreign tax paid |
| Schedule –FA | Complete details of foreign assets and foreign income |
| Schedule –SH1 | Details of shareholding of an unlisted company |
| Schedule –SH2 | Details of shareholding of start-ups |
| Schedule –AL1 | Statement of assets and liabilities at the end of the year |
| Schedule –GST | Statement of turnover reported for GST |
| Schedule –FD | Details of payment/receipt made in foreign currency |
Procedure for Filing ITR Form 6
After logging into the Income Tax Portal, navigate to the "e-Filing" section, select "Income Tax Returns," and choose ITR Form 6 for filing. To ensure a smooth and accurate filing of ITR Form 6, the Income Tax Department recommends that taxpayers follow these steps in the correct sequence:
- Part A: Begin by filling out the taxpayer's basic details, including personal information and income sources.
- Schedules: Complete the relevant schedules that apply to your company's income, deductions, and tax details. This includes details of profits and gains, tax payments, and any applicable exemptions.
- Part B: Fill in the total income, tax computation, and any carry-forward losses.
- Verification: Review all the information provided and complete the verification section to validate the accuracy of your return.
- Submit the ITR: Once all sections are filled out and verified, submit the ITR Form 6 electronically.
- Acknowledgement: After successful submission, download the acknowledgement receipt (ITR-V) for your records. If you opt for e-verification, you will receive an acknowledgement via email.
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Documents Required for Filing ITR-6
When filing the ITR-6 return form, no annexures or documents, including TDS certificates, need to be attached. Taxpayers are advised to reconcile the taxes that have been deducted, collected, or paid on their behalf by comparing these amounts with their Tax Credit Statement (Form 26AS).
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