Public Company Taxation
A Public Limited Company (PLC) in India is a corporate entity with limited liability, allowing businesses to raise capital from the public by issuing shares. However, with great opportunities come tax obligations. Understanding the income tax structure, strategic tax planning, and the ITR filing process is crucial for compliance and optimization of tax liabilities.
Income Tax Structure for Public Limited Companies in India
Applicable Income Tax Rates (FY 2024-25)
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Domestic Private Limited Companies:
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Base tax rate: 25% (if total turnover/gross receipts in the previous year do not exceed INR 400 crore)
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Otherwise: 30%
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Surcharge:
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7% if total income is between INR 1 crore and INR 10 crore
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12% if total income exceeds INR 10 crore
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Health & Education Cess: 4% on the total of income tax and surcharge
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Minimum Alternate Tax (MAT): 15% of book profits (if applicable under Section 115JB)
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Tax Planning Strategies for Public Limited Companies
1. Availing Tax Incentives & Deductions
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Section 80JJAA – Deduction for employment of new workers
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Section 80IA, 80IB, 80IC – Deductions for specific industries like infrastructure, manufacturing, and SEZs
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Research & Development (R&D) Deductions – Additional deductions for scientific research expenses
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Depreciation Benefits – Claiming accelerated depreciation on assets
2. Structuring Business Income
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Opting for beneficial tax regimes such as Section 115BAA (22% tax rate) or 115BAB (15% tax rate for new manufacturing firms)
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Investing in tax-saving instruments & compliance with transfer pricing regulations for international transactions
3. Effective GST & Indirect Tax Management
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Claiming Input Tax Credit (ITC) efficiently
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Managing GST Returns to avoid unnecessary penalties
ITR Filing Process for Public Limited Companies
FILE YOUR TAXES ON TIME
Step 1: Gather Required Documents
Mandatory Documents:
✔ PAN Card of the company
✔ Certificate of Incorporation
✔ MOA & AOA
✔ Audited Financial Statements
✔ Bank Statements
✔ TDS Certificates (Form 16A)
✔ GST Returns
✔ Previous Year’s Tax Returns
✔ Director’s KYC documents
Step 2: Compute Total Income & Tax Liability
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Determine total revenue, allowable expenses, and taxable income
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Compute tax liability as per applicable corporate tax rates
Step 3: Select the Right ITR Form
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ITR-6 – Applicable for all companies except those claiming exemption under Section 11 (Income from property held for charitable purposes)
Step 4: File ITR Online on the Income Tax Portal
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Login to Income Tax e-filing portal
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Fill in required details & attach supporting documents
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Verify using Digital Signature Certificate (DSC)
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Submit the return & save the acknowledgment receipt
Step 5: Verify and Respond to Notices (if any)
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The IT department may issue notices regarding inconsistencies
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Respond promptly to avoid penalties
Timeline for Public Limited Company ITR Filing
Task | Deadline |
|---|---|
Filing Income Tax Return (ITR-6) | 31st October (if audit applicable) |
Filing Tax Audit Report (if turnover > INR 10 crore) | 30th September |
Advance Tax Payment (Quarterly Installments) | 15th June, 15th September, 15th December, 15th March |
Penalties for Non-Compliance
Type of Non-Compliance | Penalty |
|---|---|
Not filing tax audit report | 0.5% of turnover or INR 1,50,000 (whichever is lower) |
Failure to maintain books of accounts | INR 25,000 to INR 5,00,000 |
Late ITR filing | INR 5,000 (before Dec 31st), INR 10,000 (after Dec 31st) |
Common Mistakes to Avoid
❌ Failing to file returns on time, leading to penalties
❌ Incorrect computation of income & tax liability
❌ Ignoring advance tax payments
❌ Non-disclosure of foreign transactions
❌ Missing out on deductions & exemptions
