Filing of Income Tax Returns for Corporates

Last Updated at: Oct 30, 2020
tax slab
The advance corporate tax mop-up has dropped by in the quarter ending June 2020 by a whopping 79% as compared to the same quarter in 2019. From Rs 39,405 crore in the June 2019 quarter, it has dropped to Rs 8,286 crore in the June 2020 quarter. An income tax official said this on 17th September, 2020. 


As per the Income Tax Act, every company has to file for income tax returns. The income tax return has to be filed by the September 30 deadline for the salary or income earned over the year. If you are not clear about the income tax filing rules for corporates, then you should take a look at the same from here.

The Income Tax Act requires that every company to furnish return of income. The due date for filing of income tax return is September 30 of the Assessment Year. Assessment Year is the year in which the salary earned in the previous year is taxable. Any financial year begins from April 1 of every year and ends on March 31 of the subsequent year.The consequences of late submission range from penal interest, penalty, deprival of privilege for certain deduction, and in case of losses reported few losses cannot be carried forward.

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In the return the details of high value transactions need to be compulsorily stated, which are ordinarily reported through the annual information return (AIR) and these details are cross checked and matched with the data in the AIR.

File your ITR before due date

How to Compute Tax

All incomes
Less: Losses, expenses, & Allowable Exemptions
Gross Total Income

Less: Allowable Deductions

Tax: Total Income * Tax rate

Less: Relief & Rebates
= Tax Payable

Gross Total Income

For the purpose of tax computation total gross income is the aggregate of the income from various sources, after excluding qualifying exemptions, grouped under the following heads:

1. Income from house/property
2. Capital gains
3. Profits and gains of business or profession
4. Income from other sources such as foreign dividends, interests etc. Income from other sources including interest on securities, winnings from lotteries, and also, income of other persons may be included in the income of the company.
5. The income is adjusted for ‘current and brought forward losses’ and qualifying exemptions to arrive at the Gross Total Income, which should be adjusted allowable deductions to arrive at the net income

Allowable Deductions

In computing taxable total income, Gross Total Income should be adjusted for allowable deductions to arrive at the net income, several deductions are allowed which include the following.

1. Capital Allowances – expenses on R&D, mergers & acquisitions qualify for deduction.
2. Depreciation – available at specific percentage depending on the nature of the asset and depreciation not set off against current year’s income can be carried forward for set off against any future income for an unlimited period.
3. Stock/Inventory – valuation at market value or cost whichever is lower.
4. Interest – Interest paid on the borrowings.
5. Losses – can be set off against any other income in the same Assessment Year and against business profits in subsequent assessment years subject to certain conditions.
6. The net income thus arrived is the chargeable income which is subjected to tax  to determine the tax accrued from which the tax rebates and credits are deducted to arrive at the actual tax payable.

Do keep in mind that the consequences of late submission of income tax return and filing will result in penalty, leave you deprived of privileges and attract penal interest. So, always stick to the deadline to avoid delays. You can make sure to do the same in advance to avoid penalty.