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Filling of LLP Returns

Every LLP registered under the LLP Act, 2008 needs to file the annually return with LLP ROC.

Every LLP should file the returns on timely basis to avoid the heavy penalty. Every LLP, which has incorporated up to September 30 of the financial year, needs to close its First Financial Year on coming March 31 and if a LLP has been incorporated on or after October 01 in a financial year then that LLP has choice to close the first financial year on coming March 31 or next year March 31.

For an example:
Case 01
ABC Trading LLP registered on September 30, 2017 then ABC Trading LLP needs to close its first financial year on March 31, 2018 and needs to file all returns within the due dates.

Case 02
ABC Trading LLP registered on October 01, 2017 then ABC Trading LLP may close its first financial year either on March 31, 2018 or March 31, 2019 and accordingly needs to file all returns.

# Income Tax returns needs to be filled by March 31 only (closing for first financial year in only for ROC LLP purpose under LLP Act not for Income Tax).

What all returns LLP needs to file?

  1. Income Tax Return
  2. Tax Audit Report
  3. Statutory Audit Report
  4. Annual Return
  5. Financial Return

When these all returns need to be filled and what the penal provisions for not filling of Returns?

S. No. Return / Form No. Due Date Penalty
01. Income Tax Return (without tax Audit) 31-07-2018 1000/5000/10000
02. Income Tax Return & Tax Audit Report 30-09-2018 150,000.00 on Tax Audit Report
1000/5000/10000 on ITR
03. Annual Return (Form 11) 30/05/2018 INR 100.00 per day
04. Financial Return (Form 8) 30/10/2018 INR 100.00 per day

For further any queries or details you may write to us or call us on following written details

Nitin Grover & Co.
Mobile: +91 – 9582009494, 9999840006
Office Landline: 0124 – 421 44 44

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Filling of ITR

An assessee needs to file the Income tax return as per Income Tax Act, 1961. Whatever he earns in a year needs to declare the entire details to the government in the applicable Income Tax return form (issued by the CBDT). Every year in a budget Ministry of Finance provides the Tax Slab rate on the Income for the year.

Accordingly an Assessee calculates his Income and pay the Tax accordingly to the Government of India.

There are various forms under which Income Tax return can be filled. Forms of ITR are named as ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7.

Important thing is that there are five (5) heads under which Income can be treated and Income Tax form can be selected for filling of Return. These are written as following.

  1. Income from Salary
  2. Income from House Property
  3. Income from Capital Gain
  4. Income from Business and Profession
  5. Income from Other Sources

Every Assessee needs to check the Residential Status as well to select the appropriate option in the Income Tax Return.

Some Important issues are discussed in details.

What is Income Tax Return?

Income Tax Return is a declaration about your Income earned in a year (called as Previous Year) in prescribed form give by the Central Board of Direct Taxes on yearly basis.

Every time while filling Income Tax return do I need to pay tax?

This is very general question, which I heard too many times. But the answer is No. Tax is payable only when the Income earned is taxable as per the Income Tax Act, 1961.

Under the Income Tax Act, 1961 Tax may be chargeable on the Income as per given slabs or by the special rates.

Why I do need to file Income Tax Return?

As I am residing in India and earning in India then I need to file my ITR and pay taxes accordingly.

It’s a mandatory compliance as well and we have other benefits as well which are written as following.

  1. It helps us to get the Home Loan
  2. It helps us to get the CAR / Vehicle Loan
  3. It helps us to get other financial help i.e. Personal Loan, Business Loan etc.

Most importantly we get away from penal provisions and we can use our money without any hassle.

What are the penal provisions for Non-filling of Income Tax Return?

As per the Income Tax Act, 1961 every assessee who is liable to pay tax needs to pay tax and file the return as per following written dates.

S. No. Particulars Last Date to file Income Tax Return Penal Provisions
01. Individuals (non business) / business without audit 31-07-2018 1000/5000.00/10000.00
02. Individuals (business) Audit 30-09-2018 150,000.00 on Audit & 1000/5000.00/10000.00 in ITR
03. Partnership Firms / LLP’s (without Tax Audit) 31-07-2018 1000/5000.00/10000.00
04. Partnership Firms / LLP’s (required Tax Audit) 30-09-2018 150,000.00 on Audit & 5000.00/10000.00 in ITR
05. Companies 30-09-2018 150,000.00 on Audit & 5000.00/10000.00 in ITR

Is there any interest on nonpayment of Tax Payment?

Yes, there is Interest on Tax @ 1% per month on late payment of Income Tax.

What is Assessment Year?

Assessment year means the next year of previous year. Previous Year means in which we do work and earn the Income but we declare the entire details to Income Tax Authority in the next year. Let understand the same with an example.

Mr. Aakash is working in a company and withdrawing Salary of INR 100,000.00 per month. He worked in a company for the period April 2017 to March 2018. In this Case Previous Year is 2017-2018 and Assessment Year is 2018-2019.

For further any queries or details you may write to us or call us on following written details

Nitin Grover & Co.
Mobile: +91 – 9582009494, 9999840006
Office Landline: 0124 – 421 44 44

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Incorporation of Company

What is Company?

Company is an artificial person which cannot be seen or touched but have presence. The presence of Company is permitted under Companies Act, 2013 (which has been changed from Companies Act, 1956).

Changes occurred between Companies Act, 1956 to Companies Act, 2013 is nothing more than that the renovation of current building to make it modernize to avail the possible facilities.

# Company is a Separate Legal Entity.

What is the Purpose and meaning of Company?

As per the Companies Act, 2013, Company means an artificial person and can do any legal business in the country.

Company is a voluntary association of persons formed for the purpose of doing business having a distinct name and limited liability. It is a juristic person having a separate legal entity distinct from the members who constitute it, capable of rights and duties of its own and endowed with the potential of perpetual succession.

Section 2(20) of Companies Act, 2013, provides that a ‘Company’ means a company incorporated under this Act or under any previous company law.

# Company is not a Citizen (Tata Locomotive Engineering & Locomotive Co. Ltd. v State of Bihar)

Is there any Liability of Directors in case of Loss?

Company is separate legal entity distinct from any other person, shareholder and Directors as such is conferred with rights and is subject to certain duties and obligations.

# Reference Case Law : Salomon v Salomon & Co Ltd (1897)

Under the concept of Limited liability the owners of the company under normal circumstances, are not answerable or responsible for the obligations of the company therefore making the owners/ shareholders liable only for the amount of their unpaid shares and not the obligations of the company.

The principle from the Salamons case firmly established that a company has a separate legal identity to that of its shareholders and has been applied over a wide range of cases.

Who can Incorporate the Company?

As per the requirement of Law minimum two (2) positions needs to be filled while Incorporating a Company. These two positions are written as following
a. Promoter / Shareholder / MOA Subscriber
b. Director

Above said positions may be filled by same persons or by different persons in a company.

Now, Let us understand the concept and difference between Promoter / Shareholder / MOA Subscriber and Directors

In an easy manner to understand Promoter / Shareholder / MOA Subscriber means a person who subscribe the shares while incorporating a Company, buy shares after Incorporation of Company and whose name is written in the annual return of the company

While Director means a person appointed to perform the duties and functions of director of a company in accordance with the provisions of the Companies Act, 2013.

How many numbers of person(s) is required to incorporate the Company?

Minimum 1 person is required to startup the company and there is no limit for maximum numbers.

In case of Directors: Minimum 1, 2 & 3 directors are required for one person Company (OPC), Private Limited and Limited respectively. (Section 149(1))

Maximum Directors: A company can appoint maximum fifteen (15) directors and a company may appoint more than fifteen directors after passing a special resolution in general meeting and approval of Central Government is not required. (Section 149(1))

In case of Shareholders: Minimum 1, 2 & 7 shareholders are required for one person Company (OPC), Private Limited and Limited respectively.

Maximum Shareholders: 1, 200 & Unlimited shareholders may have for one person Company (OPC), Private Limited and Limited respectively.

What is the minimum Capital required to incorporate the company?

Currently there is no minimum limit of Capital to Incorporate the Company (limit has been abolished). Previously Capital Limit was One Lakh (1,00,000.00) or Five Lakhs (5,00,000.00) for Private Limited and Limited Company respectively.

What else is required to Incorporate a Company?
Companies Act, 2013 is governing law in India to incorporate a Company. Following written conditions are mandate to follow for incorporation of company in India.

  1. Director (who is capable to do contract as per Indian Contract Act, 1872) (One Director shall be an Indian Resident)
  2. Shareholder (who has attain the age of 18 years)
  3. Proper address to register the company
  4. Legal allowed name following by OPC Private Limited, Private Limited or Limited Company as the case may be
  5. Capital Contribution in term of Shares (Equity or Preference)
  6. Business Activity.

What is the Process to Incorporate the Company?

Process and forms are predefined to incorporate the Company. Hence it’s not worthful to describe here because this Article is basically for a layman person to understand about the company. A general documents are required which I am telling here as under.

  1. Copy of PAN of all the persons (self signed)
  2. Copy of Aadhar Card of all the persons (self signed)
  3. Address proof for Company Registration in India
  4. Forms / Annexure required for Company
  5. DIN for Directors
  6. DSC for Directors and Shareholders
  7. Proposed Name(s) for Company
  8. Capital for Company
  9. Business Objective / Main Objects

For further any queries or details you may write to us or call us on following written details

Nitin Grover & Co.
Mobile: +91 – 9582009494, 9999840006
Office Landline: 0124 – 421 44 44

Read more