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Compliances Applicable to a Private Limited Company

A lot of compliances are required for a Private Limited Company. Whenever we think of a Private limited company, we back off thinking this. Let us look upon what really is required –

What are the Compliances Applicable to a Private Limited Company?

Auditor Appointment –

  • ⦁ For carrying a Statutory Audit of the company, i.e. Audit mandated by Companies Act, 2013. (1st Auditor has to be appointed within 30 days when a company is incorporated).
  • ⦁ It is compulsory in nature even if turnover is zero or a company is a loss-making entity.

Accounting and Book-Keeping –

  • ⦁ Books of accounts have to be maintained compulsorily so that the Balance sheet and Profit & Loss Account can be prepared, which is required for ROC filings and filing of Income Tax returns.
  • ⦁ It is compulsory in nature.
  • ⦁ Cheapest Software available in Indian Market – Zoho books, Tally, QuickBooks, and Busy
  • ⦁ At the initial phase, it is advisable to outsource the activity, as it would save your cost by 70% per month and you would also get an expert opinion from a taxation point of view. Contact us and we are set to work together.

Filing of TDS Returns / TCS Returns and Payment of TDS-

  • ⦁ TDS Returns – Non Salary – 26Q – Is Required to be filed every quarter if Company enters into any transaction in which TDS deduction is mandatory as per Income Tax Act, 1961.
  • ⦁ TDS Return – Salary – 24Q – Is Required to be filed every quarter if Company is deducting TDS on Salaries of employees. The company here can only file last quarter’s return to save compliance costs. Kindly take the necessary legal opinion.
  • ⦁ It is mandatory to comply with TDS Compliances.
  • ⦁ TDS Payment has to be made by the 7th of the next month and in the case of March, the due date is 30th April.
  • ⦁ TAN Number is mandatory both for payment of TDS and Filing of Returns.

GST Returns and Registration –

  • ⦁ GST Registration is a onetime activity, but returns have to be filed either monthly/ quarterly, depending on the periodicity.
  • ⦁ To check whether GST Registration is compulsory for your organization – Kindly contact us. The services is free, so contact us to check whether GST is applicable at a current point in time.
  • ⦁ Please don’t make a judgment based on the turnover limit of Rs. 20 lakh / Rs. 40 lakh. There are several other factors that determined whether GST is applicable, like inter-state sales, etc. (Never consume a medicine just by searching on search engine, same applies here.)

Statutory Audit –

Payment of Advance Tax –

  • ⦁ Required only by a profitable entity and can be ignored if the company is a loss-making entity/ having no revenues.
  • ⦁ The due dates to pay advance tax are 15th June – 15%, 15th September – 45%, 15th December – 75%, and 15th March – 100%.
  • ⦁ In case taxes are not paid on time, interest has to be paid under different sections like 234A, 234B, 234C.

Filing of Income Tax Returns –

  • ⦁ Filing of Income Tax Returns is mandatory for a Private Limited.
  • ⦁ The original due date is 31st October, every year (subject to changes – please contact us to know the latest due dates – we never charge for giving you basic information.
  • ⦁ It is a yearly activity and 1 return has to be filed every year. Subject to the condition that yes, it can be revised if required.

ROC Compliances –

⦁ Various ROC Returns and compliances are required for a Private Limited Company. The government has given relaxation to small companies. We will only mention those compliances which are compulsorily required by a small Private Limited Company. Please don’t confuse a small company with your own definition, the definition is mentioned below for your reference.

⦁ As per the new definition and threshold limits, companies with a paid-up capital of INR 2 crore or less, and turnover of INR 20 crore or less come are defined as small companies. The earlier threshold was INR 50 lacs or less in paid-up capital and INR 2 crore or less in turnover. The above definition changes from time to time, so do contact us for the updated details.

Compulsory ROC Returns for small companies includes –

  • ⦁ AOC – 4 – In simple words, it is used to file the Balance Sheet and Profit & Loss Account with the Registrar of Companies. It is an annual activity.
  • ⦁ MGT – 7 – In simple words, it is used to intimate ROC about the Annual General Meeting, number, and dates of board meetings, and other critical information. It is an annual activity.
  • ⦁ Director’s KYC – Every director has to file the KYC every year with ROC, in case not filed on time, penalty of Rs. 5,000 is levied.

Note: The above compliances may change. So, do contact us – we offer free services to check whether you are compliant. Contact Us for more information.

We offer complete compliance solutions to a Private Limited Entity. We provide one of the best services, where you concentrate on the business and we shall handle all the compliances for you. Contact us for the packages.

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Attention: File GSTR-9 & 9C before 31/12/2021 to avoid Late fees.

Applicability of GSTR 9 & 9C –

⦁ GSTR-9 is optional for taxpayers with a turnover of up to Rs.2 crore.

⦁ GSTR-9 is required to be compulsorily filled by the taxpayers with a turnover of more than Rs.2 crore but less than or equal to Rs.5 crore for the FY 2020-21.

⦁ Taxpayers with a turnover exceeding Rs. 5 crores in the previous financial year are required to file Form GSTR-9 & 9C on a self-certification basis compulsorily by 31st Dec 2021.

Note – Verification table by CA/CMA in Part B of Form GSTR-9C has been deleted. Now, only verification by the registered person is required in GSTR-9C for applicable registered taxpayers. This change applies from FY-2020-21 onwards.

Consequences of not filing GSTR 9 and 9C before 31st December 2021 –

A registered person failing to furnish the GSTR-9 by the due date shall be liable to pay a late fee of INR 200 (INR 100 for CGST and SGST each) every day during which such failure continues subject to a maximum of an amount calculated at a half percent of his turnover in the State or Union territory. Further, while calculating maximum late fee, ‘turnover in State’ or ‘turnover in Union territory’ should be taken into consideration.

What are the things which need to be kept in mind GSTR-9 & 9C return before 31st December 2021?

⦁ The taxpayer would have the “option” to report taxable outward supplies net of debit and credit notes and amendments made under table 4A to 4G in GSTR-9 instead of reporting separately under table 4I to 4L.

⦁ The taxpayer is mandatorily required to report values of Export (5A) and SEZ (5B) supplies without payment of tax, supplies on which tax is to be paid by the recipient on a reverse charge basis (5C) separately.

⦁ The taxpayer would have the “option” to report exempt (5D), Nil rated (5E), Non-GST (5F) supplies cumulatively under table 5D if bifurcation of such supplies is not available.

⦁ The taxpayer would have the “option” to report taxable outward supplies net of debit and credit notes and amendments made under table 5A to 5F in GSTR-9 instead of reporting separately under table 5H to 5K.

⦁ The taxpayer is mandatorily required to report the details of ITC on capital goods separately. However, details of ITC on inputs and input services can be reported on a merged basis under the head ‘Inputs’ under Tables 6B & 6E.

⦁ The taxpayer would have the “option” to report the details of ITC on capital goods separately. However, details of ITC on inputs and input services can be reported on a merged basis under the head ‘Inputs’ under table 6C. Further, the details of Table 6C can be reported on a merged basis in Table 6D.

⦁ The taxpayer would have the “option” to report the accumulated amount of reversal from 7A to 7E can be filled in 7H, i.e., in ‘Other reversal’, but the reversal of transitional credit fields is mandatory.

⦁ Ideally, the value of Table 8D should be positive & if it is positive, then the total of 8E and 8F shall be equal to 8D.

⦁ Further other details of refund claimed during the year including sanctioned, rejected, or the pending amount & HSN Wise Summary of outward supplies and HSN Wise Summary of Inward supplies are optional.

Disclaimer – The above information is just a view of the author and should not be taken as legal advice. For Information and Education Purpose.

Contact us in case you need any services related to GST Consultation, GST Advisory, GST Registration Services, GST Returns or compliances, GST Notices and Assessments, GST Demand, GST Annual Return.

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