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A limited liability partnership (LLP) is a corporate body that was created and incorporated under the 2008 Limited Liability Partnership Act. It is a legally distinct organization from its partners who are associated with it. An LLP shall be responsible to the full extent of its assets but the partners' liability is limited to their accepted investment in the LLP. As the partners' responsibility is limited to their negotiated participation in the LLP, it incorporates aspects of both a corporate structure and the structure of a partnership company. And in the case of any fraudulent act, then a partner has no personal liability upon it.
The reports will be submitted annually for a Limited Liability Partnership (LLP) to ensure enforcement and avoid severe penalties for non-compliance under the legislation. A limited liability company only has few compliances to be met each year which is remarkably small compared to the enforcement standards imposed on private limited firms. The fines tend to be relatively large, though. Although failure to comply could only charge fines to a Private Limited company INR 1 lakh, it could charge an LLP up to INR 5 lakh.
Annual returns shall be submitted in specified Form-11. This form helps in the outline of LLP's management relations, along with numbers of partners and their names. Also, Form 11 must be filed annually by the 30’th of May. Form 11 requirements of LLP are:
As discussed earlier, Limited liability partnerships whose revenue exceeds INR 40 lakhs or whose contribution exceeds INR 25 Lakhs must have the account books audited by Chartered Accountants. The deadline for filing a tax return for an LLP that is needed to audit its books is September 30th.
Before initiating the tax procedure, you should prepare the statement of accounts for the LLP. The preparation of the statement of accounts is the first step in drawing up the LLP's financial statements. You should be alert and abide by the provisions of the 1961 Income Tax Act.
The most significant step in filing an ITR for the LLP is the computation of taxable income. While engaged in tax computing, for your LLP, the accuracy of financial statements is essential. The income tax regulations handle these expenses differently because if the expenses do not meet the statute, they are effectively concluded as an expense and therefore the taxable income rises.
The income tax department also acknowledges a particular payment as the LLP's cost if it follows the rules. Here's an overview of common tax disallowances and the reasons for LLP's ITR.
The LLP Income Tax self-assessment can be charged electronically via the Income Tax Portal. Choose Challan Number - 280 on the tax payment page, and follow the instructions on the computer. Income Tax can be charged by nearly all the banks through internet banking. The income tax for the LLP can also be charged through some of the banks' debit cards as described in the income tax portal. By visiting your branch, you may also pay income tax and send a check together with Tax Challan 280.
Create a profile for filing Income tax returns of the LLP on the Income Tax Portal. Due to the electronic filing of the LLP Income Tax Return, the LLP is expected to file for the first time on the income tax export portal. Mobile and email OTP are necessary to register the LLP. One designated partner must be listed as an authorized signatory on the income tax portal. The designated partner's digital signature is also registered on the ITR website for verification purposes when the ITR is filed.
The LLP's income tax return can be filed only after the self-assessment tax has been paid. The LLP ITR can be submitted with the use of any approved partner's digital signature. The LLP ITR, however, can also be checked via the partner's Aadhaar-based OTP which is registered on the income tax portal.
Due Date of filing LLP Income Tax Return
Can a return be filed after the due date?
Yes, a late return may be filed before the end of the appraisal year or before the completion of the appraisal year, whichever is earlier. For example, the late return may be filed up to 31 March 2018, for income earned during FY 2016-17.
Is it mandatory to file income returns?
Yes, every LLP company must file an income return regardless of the amount earned, even if it is a profit or loss.
Is it possible for me to file a revised return to correct a mistake in the original return was filed?
Yes, the return may be updated within one year from the end of the current assessment year or before the assessment is completed, whichever is earlier. Revised return filing is not part of the strategy. The plan buyer is expected to include, complete and correct information to prevent the need for any rectification in the return that was originally submitted.
Should I keep a copy of the return filed as proof? If so, for how long?
Yes, legal proceedings are applicable for up to 4 to 6 years (depends entirely on a case by case structure) before the current financial year, under the Income-Tax Act. For some cases, however, the hearings can be initiated only after 6 years, so it is best to retain the return copy for at least 6 years or for however long as possible.
Can I attach the particulars of TDS deducted, proof of investments, etc?
You are not allowed to add any documents such as investment evidence, TDS certificates, etc. along with the ITR. Such records should, however, be maintained and submitted before the tax authorities as required in circumstances such as evaluation, investigation, etc.
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