Filing ITR for Pvt Ltd Company

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Filing ITR for Pvt Ltd Company

Every private limited company registered in India must file an income tax return for FY 2026-27 (Assessment Year 2027-28) — even if it made no revenue, declared a loss, or remained dormant all year. The return form is ITR-6, filed electronically with a Digital Signature Certificate (DSC) on the Income Tax e-filing portal (incometax.gov.in). If your company has adopted the Section 115BAA concessional regime (22% base rate, effective ~25.17% all-in), MAT does not apply and filing is cleaner — but the disclosures in ITR-6, Form 3CD, and the reconciliation with GST and TDS data are more detailed than ever. Get the sequence right and you protect loss carry-forwards, avoid late fees, and reduce scrutiny risk.

Which Tax Rate Applies to Your Company?

Choosing the wrong regime — or forgetting that an election is irrevocable — is one of the costliest mistakes a finance head can make. Here is the current rate matrix for AY 2027-28:

Section 115BAA — Concessional Domestic Company Rate

• Base rate: 22%
• Surcharge: 10% (flat, regardless of income level — this is different from the default regime)
• Health and Education Cess: 4%
• Effective all-in rate: 22% × 1.10 × 1.04 = ~25.17%
• MAT: Not applicable
• Condition: You permanently forgo deductions under Chapter VI-A (80IC, 80IE, 80-IBA etc.), Section 10AA, accelerated depreciation, and certain other exemptions. The election is exercised in Form 10-IC filed on or before the due date of the return for the first year of opting in. Once made, it cannot be withdrawn.

Section 115BAB — New Manufacturing Company Rate

• Base rate: 15%
• Effective all-in rate: 15% × 1.10 × 1.04 = ~17.01%
• Condition: Company incorporated on or after 1 October 2019, commenced manufacturing on or before the deadline notified, does not use second-hand machinery beyond prescribed limits, and satisfies the domestic value addition test. MAT does not apply.

Default Regime

• Base rate: 25% for companies with turnover ≤ ₹400 crore in FY 2024-25 (the prescribed look-back year); 30% for all others
• Surcharge: 7% for total income ₹1–10 crore; 12% for income above ₹10 crore
• HEC: 4%
• MAT: 15% of book profit under Section 115JB, plus applicable surcharge and cess — whichever is higher between regular tax and MAT is payable

Practical signal: If your company has no major Chapter VI-A deductions, no SEZ operations, and is done with accelerated depreciation claims, Section 115BAA is almost always superior. Run the numbers before your FY 2026-27 advance tax computation if you have not already opted in.

Documents and Forms You Must Assemble Before Filing

Do not open ITR-6 on the portal until these are in hand. Filing without them leads to revision, which flags the return for closer scrutiny.

Statutory financials:

• Board-approved audited financial statements under the Companies Act 2013 (Balance Sheet, P&L, Cash Flow, Notes)
• Auditor's report — statutory and tax

Tax audit forms (where applicable):

• Form 3CA — confirmation that accounts have been audited under the Companies Act; signed by the tax auditor
• Form 3CB — used instead of 3CA where no Companies Act audit was required (rare for Pvt Ltd companies)
• Form 3CD — the 44-clause tax audit report covering allowances, disallowances, related party transactions, ICDS impact, loans/deposits reporting, and specified financial transactions

Transfer pricing (where applicable):

• Form 3CEB — Transfer Pricing Accountant's Report, mandatory when aggregate international transactions or specified domestic transactions exceed prescribed thresholds (₹1 crore for specified domestic; no floor for international)
• Transfer Pricing study / documentation contemporaneously maintained

TDS and advance tax:

• Form 26AS and Annual Information Statement (AIS) / Tax Information Summary (TIS) downloaded from the portal
• Challan receipts for advance tax deposits
• Form 16A / 27D certificates from deductors

GST returns:

• GSTR-1, GSTR-3B (monthly/quarterly), GSTR-9 (annual) for reconciliation with turnover declared in the return

Other disclosures:

• ICDS (Income Computation and Disclosure Standards) impact working — 10 ICDS apply; differences between ICDS treatment and books must be quantified and disclosed in ITR-6 Part A — OI and Schedule OTH
• MAT credit register (if on default regime and carrying forward MAT credit under Section 115JAA — carryforward window is 15 years)

Step-by-Step ITR-6 Filing Sequence

Follow this sequence. Each step depends on the previous one being complete.

1. Lock books of account — close all entries for FY 2026-27, complete depreciation working under both the Companies Act 2013 (Schedule II) and the Income-tax Act 1961 (Appendix I, Rule 5). Differences feed the Schedule DPM in ITR-6.

1. Prepare tax audit workings — quantify disallowances (Section 40A(3), Section 43B, Section 36(1)(iii) etc.), compute ICDS adjustments, and prepare the 44-clause 3CD response.

1. Upload Form 3CA/3CB and 3CD — the tax auditor logs into the portal with their credentials and submits the audit report. This is separate from the ITR itself. Deadline: 30 September 2027. Do not let this slip; the ITR cannot practically be filed until audit sign-off is complete.

1. Upload Form 3CEB (if required) — also uploaded by the accountant on the portal. Deadline: 31 October 2027 (ahead of the TP ITR deadline of 30 November 2027).

1. Prepare the ITR-6 XML — most CA firms use tax return preparation software (Computax, Genius, KDK, or similar) that pulls data from Form 3CD to auto-populate relevant schedules. Verify:
2. Schedule BP (computation of income from business/profession)
3. Schedule SI (special income rates)
4. Schedule MAT / MATC (if applicable)
5. Schedule CFL (carry-forward of losses)
6. Schedule AL (assets and liabilities — mandatory if total income exceeds ₹50 lakh)
7. Schedule SH (shareholding pattern)
8. Schedule RP (related party disclosures)

1. Validate and upload XML on the income tax portal; attach Form 10-IC if opting into 115BAA for the first time.

1. E-verify using DSC — companies cannot use Aadhaar OTP or EVC; a Class 3 DSC registered in the name of an authorised signatory (MD, CEO, or authorised director) is mandatory.

1. Acknowledge and retain — download the ITR-V / acknowledgement and store it with the tax file.

Due Dates at a Glance — AY 2027-28

Critical consequence of missing 31 October / 30 November: Business losses (other than unabsorbed depreciation and Section 35AD losses) cannot be carried forward if the return is not filed by the due date under Section 139(1). For a loss-making startup or a company in an investment phase, this is a permanent cash-flow disadvantage compounded over eight years.

Worked Example: Tax Computation for a Mid-Sized Pvt Ltd

Scenario: TechForge Private Limited, FY 2026-27

• Revenue: ₹18 crore
• Book profit (P&L): ₹2,40,00,000 (₹2.4 crore)
• Taxable income after ICDS adjustments and disallowances: ₹2,55,00,000 (₹2.55 crore)
• Has opted into Section 115BAA (Form 10-IC filed in AY 2025-26)
• No prior MAT credit; no transfer pricing transactions

Tax computation:

Advance tax instalments actually deposited:

• 15 June 2026: ₹9,60,000 (below the 15% requirement of ₹9,62,676 — minor shortfall)
• 15 September 2026: ₹19,20,000
• 15 December 2026: ₹16,00,000
• 15 March 2027: ₹18,00,000
• Total advance tax paid: ₹62,80,000

Balance tax payable at time of filing: ₹1,37,840

Section 234B interest (shortfall from 90% of assessed tax): 90% of ₹64,17,840 = ₹57,76,056. Company paid ₹62,80,000, so no Section 234B exposure here.

Section 234C interest (June instalment shortfall of ~₹2,676): Interest = ₹2,676 × 1% × 3 months = ₹80 — trivially small, but illustrates how the formula works in practice.

Late fee under Section 234F: Zero — filed before 31 October 2027. If filed after that date, ₹5,000 (since income exceeds ₹5 lakh).

The Reconciliation Exercise You Cannot Skip

The most commonly underestimated pre-filing task is a four-way reconciliation. AIS and TIS now aggregate data from banks, GST authorities, registrars, and other filers — and the Income Tax Department's compliance team flags mismatches algorithmically before any human reviews a file.

What to reconcile:

1. Turnover per books vs. GSTR-1 / GSTR-3B: Differences arise from advance receipts, credit notes, exempt supplies, and timing. Prepare a month-by-month bridge. Reconcile further with GSTR-9 before filing that return.

1. TDS deducted on your receipts (Form 26AS / AIS) vs. income declared: If a client deducted TDS on a payment that you have not recognized as income yet (e.g., advance billing vs. percentage-of-completion), document the reason. Unexplained gaps become Section 131 summons.

1. TDS deposited by you vs. Form 26Q / 24Q filed: Verify that credits land in the deductee's Form 26AS. Errors in the deductee's PAN mean the credit is lost — for them and potentially triggers a disallowance for you.

1. AIS high-value entries vs. books: AIS now shows property transactions, share subscriptions, GST outward supplies, foreign remittances, and SFT data. Every entry in AIS that relates to your company should be traceable to a book entry.

Do this reconciliation before the tax audit, not after, so the auditor is reviewing clean data.

MAT: When It Still Applies and How to Handle Credit

If your company has not opted into Section 115BAA and remains on the default regime, Minimum Alternate Tax (MAT) under Section 115JB remains relevant. MAT is levied at 15% of book profit (as defined — broadly, net profit per P&L before tax, with specified additions and deductions). Where MAT exceeds regular income tax, MAT is the liability.

The excess of MAT paid over regular tax becomes MAT Credit (Section 115JAA), which can be carried forward for 15 assessment years and set off in a year when regular tax exceeds MAT.

Common MAT mistakes:

• Using MAT credit in a year when the company has already migrated to 115BAA (credit lapses on migration — the Section 115JAA credit is not available once you opt into 115BAA)
• Not maintaining a year-wise MAT credit register, leading to incorrect claim in ITR-6 Schedule MATC
• Forgetting that MAT is still payable on book profit from SEZ units, even after Section 115BAA opt-in in some legacy situations — check specific conditions with your tax advisor

Transfer Pricing: When Form 3CEB Triggers

If your private limited company has:

• International transactions with associated enterprises (AEs) — any amount triggers Form 3CEB and a contemporaneous TP study
• Specified domestic transactions under Section 92BA with AEs where the aggregate exceeds ₹20 crore — triggers Form 3CEB and documentation

Form 3CEB is certified by a Chartered Accountant (not necessarily the statutory auditor) and uploaded on the portal by 31 October 2027. The ITR itself is then due by 30 November 2027.

Pitfall: Many Pvt Ltd companies overlook specified domestic transactions — inter-company management fees, shared services, royalties, and loan interest between group entities. If aggregate exceeds ₹20 crore, full TP documentation is mandatory, not optional. The penalty for failure to maintain documentation is 2% of the transaction value — independent of whether any tax adjustment results.

Common Pitfalls to Avoid

These are the situations that generate demand notices, penalty proceedings, and loss of carry-forward rights. Each one is avoidable with a proper compliance calendar.

• Filing ITR before Form 3CD is uploaded: The portal allows it, but the return becomes an audit-pending filing that the system later flags. File ITR only after the auditor has submitted 3CA/3CD.

• Ignoring ICDS adjustments: Ten ICDS are in force (revenue recognition, valuation of inventories, construction contracts, revenue from service transactions, tangible fixed assets, effects of changes in foreign exchange rates, government grants, securities, borrowing costs, provisions). Each can create a timing difference that must be added back or deducted in Schedule BP of ITR-6. Omitting them creates a position that the Assessing Officer can recompute.

• Incorrect Section 80 loss carry-forward claims: Only eight assessment years of carry-forward are available for business losses. Verify the year of origin for each loss in Schedule CFL and confirm it has not already lapsed.

• Not reconciling advance tax with the actual computation: Paying advance tax on an estimated figure and forgetting to recompute after the books are closed leads to either a Section 234B/C exposure or an unclaimed refund.

• DSC expiry: A company's DSC is typically valid for two years. If it expires before the filing date, reissuance takes time. Check validity at least 45 days before the due date.

• Related party schedule (Schedule RP) underreported: The AO cross-references this with the statutory auditor's related party note. Inconsistencies between Schedule RP in ITR-6 and Note 38 (or equivalent) of the financial statements are a common reason for Section 143(2) scrutiny notices.

• Late SFT filing: Companies that report high-value transactions under Section 285BA must file the SFT by 31 May 2027 for FY 2026-27. Failure attracts ₹500 per day and, beyond the extended deadline, ₹1,000 per day.

Faceless Assessment: What Documentation to Keep Ready

Since the national faceless assessment scheme became the default, every notice, submission, and order is exchanged through the e-Proceedings module on the portal. There is no personal hearing unless specifically requested and granted.

This means your documentation must be self-explanatory to a reader who has no knowledge of your business beyond what you upload. Maintain a digital tax file for FY 2026-27 containing:

• Signed board minutes approving the financial statements
• All material contracts (customer agreements, vendor agreements, loan agreements)
• Valuation reports for any share issuance or acquisition during the year
• Transfer pricing study (if applicable)
• Reconciliation schedules (books vs. GST vs. AIS/TIS vs. TDS returns)
• Depreciation workings under both Companies Act and Income-tax Act
• ICDS impact statement

Organise this by schedule or clause number so that if a scrutiny notice asks about, say, clause 19 of Form 3CD (payments to related parties), you can upload the supporting material within the response window (typically 30 days, sometimes extendable).

Key Takeaways

• All private limited companies must file ITR-6 for AY 2027-28, regardless of profit, loss, or dormancy. DSC is mandatory; paper filing is not permitted.
• Section 115BAA at 22% base (effective ~25.17%) removes MAT applicability and is irrevocable once elected via Form 10-IC; run a multi-year model before opting in for the first time.
• The audit report (Form 3CA + 3CD) must be uploaded by 30 September 2027 — the ITR should be filed only after this step is complete. TP companies have until 30 November 2027 for ITR-6.
• Missing the Section 139(1) due date permanently forfeits the right to carry forward business losses — a compounding cost for loss-making companies, especially startups still in investment phase.
• Reconcile books, GST returns, TDS data, and AIS before the tax audit, not after. Mismatches flagged by the department are harder to explain retroactively.
• MAT credit under Section 115JAA lapses if you migrate to 115BAA — consume or write off the balance before migrating, or factor the loss into the opt-in decision.
• Faceless assessment demands document-first thinking: every position in the return should have a contemporaneous paper trail organised and ready to upload, not assembled in response to a notice.