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This tax is paid by the companies/ Businesses registered under company law in India on the net profit that it makes from businesses. It is taxed at a specific rate as prescribed by the income tax act subject to the changes in the rates every year by the IT department.
There are both Foreign Companies and Domestic Companies which are required to pay tax as per Income Tax Act, 1961:-
Income tax act requires a class of companies having turnover as defined to get their accounts audited and submit a audit report to the Income Tax Department along with the Income tax return. This audit is known as Tax Audit. This tax audit report is also required to be mandatorily submitted by eligible companies by September 30.
| Particulars | Tax Rate |
|---|---|
| Gross Turnover upto Rs. 250 Crore in FY 2016-17 | 25% |
| Gross Turnover exceeding Rs. 250 Crore | 30% |
The tax rates applicable to foreign companies for AY 2019-20 based on their turnover are as follows:
| Particulars | Tax Rate |
|---|---|
| Royalty received or fees for technical services from government or any Indian concern under an agreement made before April 1, 1976 and approved by central government | 50% |
| Any other income | 40% |
| Particulars | Tax Rate |
|---|---|
| If total income exceeds Rs. 1 crore but not Rs. 10 Crore | 7% of tax calculated on domestic company/ 2 % of tax calculated on foreign company as per above rates |
| If total income exceeds Rs. 10 crore | 12% of tax calculated on domestic company/ 5 % of tax calculated on foreign company as per above rates |
Further 4 % of income tax calculated and applicable surcharge will be added to the amount of total tax liability before this cess.
Alternatively, all the companies (including foreign companies) are required to pay minimum alternate tax at the rate of 18.5 % on book profits if the tax calculated as per above rates are less than 18.5% of book profits.
ITR 6
All the companies except companies claiming deduction under section 11 need to file their return using Form ITR 6.
ITR 7
All the companies registered under section 8 of companies act, 2013 are required to file their return using Form ITR 7.
| ITR Return | Applicability | Not Applicability |
|---|---|---|
| ITR 6 | Form ITR 6 is applicable to companies. All the companies, except those who claim exemption as per Section 11 are required to file their returns in Form ITR 6. Companies that claim exemption under Section 11 are those companies that have income from property held for charitable or religious purpose. All the companies eligible to file ITR 6 need to file their returns electronically and sign through digital signature. |
| ITR Return | Applicability | Not Applicability |
|---|---|---|
| ITR 7 | Persons who have to file their returns under Section 139(4A), 139(4B), 139(4D), 139(4E) or 139(4F) of the Income Tax Act, 1961 need to use form ITR 7. Following categories are required to furnish their return under aforesaid section. |
Last date for filing the business and profession income return is normally 31st July of the Assessment Year but if you are required to get your accounts audited, then last date for filing of return of income is 30th September of Assessment Year.
If you are engaged in a specified profession, then you need to maintain the books of accounts if your gross receipts exceeds Rs. 1,50,000 in all the three years immediately preceding the previous year or if you are going to start a new business then gross receipts is likely to exceed Rs.1,50,000.
Specified Profession include legal, medical, engineering, architectural, accountancy, technical, interior decoration, film artists, company secretary, information technology and authorised representative profession.
You are required to get your accounts audited if your turnover or gross receipts exceeds Rs. 2 Cr. (in case of Business) and Rs. 50 lakhs (in case of profession).
You have to maintain books of accounts and get your accounts audited if you do not opt for presumptive source of income, though eligible.