Private Limited Company Taxation
A Private Limited Company (Pvt Ltd) in India is required to comply with income tax regulations, tax planning strategies, and annual ITR (Income Tax Return) filing. Proper tax planning helps businesses reduce liabilities while staying compliant with legal obligations.
In this guide, we cover everything from tax rates, ITR filing process, tax-saving strategies, required documents, and deadlines to ensure smooth compliance.
Income Tax for Private Limited Companies in India
Applicable Income Tax Rates (FY 2024-25)
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Domestic Private Limited Companies:
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Normal tax rate: 25% (if turnover is up to ₹400 crore in the previous financial year)
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Higher tax rate: 30% (if turnover exceeds ₹400 crore)
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Minimum Alternate Tax (MAT): 15% (plus surcharge and cess)
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Surcharge:
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7% if taxable income exceeds ₹1 crore
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12% if taxable income exceeds ₹10 crore
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Health & Education Cess: 4% on the total of income tax and surcharge
Advance Tax Payment
Companies with a tax liability exceeding ₹10,000 must pay advance tax in four installments:
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15% by June 15
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45% by September 15
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75% by December 15
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100% by March 15
Failure to pay advance tax results in interest under Sections 234B and 234C.
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Income Tax Planning for Private Limited Companies
Effective tax planning can significantly reduce tax liabilities. Here are key strategies:
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Selecting the Right Tax Regime: Companies should analyze whether to opt for the concessional tax regime under Section 115BAA (22% tax rate without exemptions) or continue under the regular tax structure.
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Maximizing Deductions: Claim deductions under Sections 80JJAA (hiring new employees), 35 (R&D expenses), and 10AA (SEZ benefits).
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Depreciation Benefits: Optimize depreciation under the Income Tax Act to reduce taxable income.
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Utilizing Tax Loss Carry Forward: Business losses can be carried forward for 8 years under Section 72.
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Strategic Dividend Distribution: Plan dividend distribution to minimize Dividend Distribution Tax (DDT) impact.
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Claiming GST Input Credit: Proper tax structuring ensures maximum benefit from GST input tax credit.
ITR Filing Process for Private Limited Companies
FILE YOUR TAXES ON TIME
Every Private Limited Company must file its ITR annually, regardless of whether it made profits or losses. The process is as follows:
Step 1: Gather Required Documents
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PAN Card of the Company
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TAN Number
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Financial Statements (Profit & Loss Account, Balance Sheet)
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Form 26AS (Tax Credit Statement)
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Audit Report (if applicable)
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Details of TDS deducted and paid
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Bank Statements
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GST Returns
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Other supporting documents
Step 2: Prepare Computation of Income & Tax Liability
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Calculate total income including business income, capital gains, and other sources.
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Deduct eligible expenses, depreciation, and exemptions.
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Compute final taxable income and tax liability.
Step 3: File Form ITR-6 Online
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Log in to the Income Tax e-Filing Portal
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Select ITR-6 (applicable for Pvt Ltd Companies)
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Fill in required details and attach supporting documents
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Submit and verify using Digital Signature Certificate (DSC)
Step 4: Pay Income Tax (If Any) & Submit Return
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Use Challan ITNS 280 for tax payment.
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After successful payment, submit the ITR online.
Step 5: E-Verification & Acknowledgment
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Once submitted, verify using DSC or Aadhaar OTP.
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Download the acknowledgment receipt for records.
Due Date for ITR Filing
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Companies not requiring audit: July 31
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Companies requiring audit: October 31
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Companies subject to Transfer Pricing audit: November 30
Penalty for Late Filing
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₹5000 if filed after due date but before December 31
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₹10,000 if filed after December 31
