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Company and LLP Income Tax Returns Filing

Be on the right side of the regulations! Do not let the burden of compliance derail you from your objectives. File the annual Income Tax Returns for your LLP on time & avoid penal measures.

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How does income tax return filing online work for you?

This form contains the information of the income tax paid by an assessee, filing of which helps
in easy acquiring of loans, visa application and also helps avoid penalties.

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Information Collection

Our agents will set up a seamless process for data collection.

Step 1

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Return Preparation

Your return will be prepared as required.

Step 2

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Return Filing

Before you know it, your return will be ready for filing.

Step 3

What is an LLP?

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.

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When are annual compliance requirements for an LLP?

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.

Consequences of not Filing LLP ITR

  • The loss of the LLP can be allowed to be carried forward
  • There shall be interest under section 234A
  • Refunds of TDS (if any) shall be delayed
  • You can still file late returns with late Fine under section 234F
  • The late fine is from Rs. 1000 to Rs. 1000 depending on taxable income and delay
  • Non-filing shall have an impact on due diligence of the LLP
  • Checklist requirements of filing annual return

    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:

  • Digital filing of Form 11
  • Valid DSC (Digital Signature Certificate) of the partners
  • Prepare List of the Designated Partners on the LLP Letterhead
  • Keep information handy like change in partners or registered office and so on.
  • Filing and audit requirement under the Income Tax Act

    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.

    What are the ITR forms for the company and LLP?

  • All businesses are expected to file ITR 6 other than the companies seeking exemption u / s Section 11, which applies wholly or partly to profits from property kept in trust or other legal responsibilities for religious or charitable purposes.
  • ITR 7 shall be filed in cases where the client seeks exemption u / s 11. Within this scheme, ITR 7 is not included.
  • ITR 5 shall be filed if a company is declared as an LLP.
  • What are the steps involved in filing income tax for an LLP?

    Step 1: Statement of Accounts

    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.

    Step 2:The Income Tax calculations

    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.

    Step 3: Expense disallowance under the ITR Act

    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 preliminary expenses are allowed only up to 1% of capital employed in the LLP
  • All payouts are disallowed as expenses require TDS not to be deducted.
  • Penalty on delayed tax payments like TDS, GST, etc is not allowed
  • Partners’ salary is limited to 90% of the profit, up to Rs. 3 Lakh or 60% after that.
  • Please check the LLP agreement for the provision of partner remuneration.
  • Step 4: Income Tax Payment of LLP

    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.

    Step 5: Creating the profile

    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.

    Step 6: Filing Income Tax

    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

  • ITR filing for the LLP - since April 1st.
  • Last Date - 31st July
  • Last Date for Tax audit - 30th September
  • The applicable form - ITR-5
  • Filing of the belated ITR - Until the end of the assessment year.
  • Documents required for the process of finalizing the LLP statement of accounts.

  • Preliminary Expenses
  • TDS on payments of the LLP
  • Consider the provisions of GST on LLP (if applicable)
  • Partners remuneration (Special Treatment)
  • Consider good practices of Tax Planning.
  • FAQs on Company and LLP Income Tax Returns Filing

    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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