Private Limited Company Compliance Manual

BACKGROUND

Dear Reader,

We are existing in a rapidly changing business environment. The pace of change has significantly expanded the business risk canvass forcing regulators and legislators to enforce stringent compliance norms. While the intention of regulators is to manage and mitigate business risks and drive business integrity, the stakeholders are often challenged with a task of monitoring, adhering and managing these compliances to sustain business.

India has undergone significant changes in tax and regulatory legislations and stakeholders (Corporates and Non-Corporates) are often under pressure to ensure compliances on time. Not meeting compliance could result in stringent liabilities on the Corporates and on Non-Corporates and lead to severe penalties and reputational risks.

In this insight document, we have taken a reasonable attempt to consolidate significant tax and regulatory compliances and their consequences under the following Laws:

  • The Income-tax Act, 1961
  • The Goods and Services Tax Acts
  • The Companies Act, 2013

We hope this docket works as a quick reference manual to guide you in managing your statutory compliance initiatives. We do not claim that this is a total compliance management handbook and recommend to use this hand-out as a guidance document only.

Therefore, readers of this publication are advised to seek their own professional advice before taking any course of action or decision, for which they are entirely responsible, based on the contents of this publication.

Regards,

PravasiTax

Income Tax

Compliance Due Date Consequence of non-compliance
Payment of Advance Tax:

Income Tax payable before the end of the financial year, in a progressive manner.

The following are the slabs for payment of advance tax by a Company:
  • 15% of the advance tax payable by June 15;
  • 45% of the advance tax payable by Sep 15;
  • 75% of the advance tax payable by Dec 15; and
  • 100% of advance tax payable by Mar 15.
Default in payment:
  • Interest @1% p.m from 1st April of the following financial year till the date the taxes are paid
  • Interest for deferment of advance tax – at 1% per month for short payment / nonpayment of individual instalments of advance tax
Corporate Tax Return
  • On or before October 31 in the year following the financial year end
  • For Companies subject to Transfer Pricing, due date is November 30
  • Rigorous imprisonment
  • Fine:

    If return is furnished after December 31 of Assessment Year, fine would be Rs.10,000

    In other cases, fine is Rs.5,000

  • Interest @ 1% per month / part of a month
Payment of self-assessment tax

Every assessee has to deposit the income tax liability as stated in the return of income

  • To be paid by October 31 of the following financial year.
  • For Companies subject to Transfer Pricing, November 30
Treated as assessee-in-default – Penalty of such amount as Assessing Officer may impose but not exceeding the tax payable.
Submission of Tax Audit Report:

Books of accounts to be audited and report in Form 3CD to be submitted accompanied by tax

  • One month prior to due date of filing tax return
  • (On or before September 30 in the year following the financial year end; For Companies subject to Transfer Pricing, due date is October 31)
  • Penalty 0.5% of the Turnover / Gross Receipts or Rs. 150,000, whichever is lower.
Payment of TDS:
  • Salary
  • Rent / Interest
  • Payments to Contractors
  • Fee for Technical services / Royalties
  • Commission / Brokerage
  • Payments to NR (Non-Residents)
  • 07th of next month
  • For the month of March – April 30
  • Disallowance - 30% of expenditure (100% in case of Payments to Non-resident)
  • Default in deduction:
    • Interest @1% p.m
    • Penalty – Amount equal to TDS
  • Default in payment:
    • Interest @1.5% p.m
    • Penalty – Amount equal to TDS
  • Rigorous imprisonment and fine - Min term 3 Months; Max term 7 Years
Submission of Quarterly TDS Returns:
  • On non-resident payments (Form 27Q)
  • On salary payments (Form 24Q)
  • On other payments (Form 26Q)
  • Q1 (Apr to Jun) - 31 July
  • Q2 (Jul to Sep) - 31 Oct
  • Q3 (Oct to Dec) - 31 Jan
  • Q4 (Jan to Mar) - 31 May
  • Late filing fee - Rs 200 per day of default
  • Penalty in a range of Rs 10,000 to Rs 1 lakh
  • Payee will not be able to claim TDS credit
Certificates evidencing taxes deducted from payments other than salary, to be issued to the payees

Form 16A

  • Q1 (Apr to Jun) - 15 Aug
  • Q2 (July to Sep) - 15 Nov
  • Q3 (Oct to Dec) - 15 Feb
  • Q4 (Jan to Mar) - 15 June
  • Penalty – Rs 100 for every day during which failure continues
Certificates evidencing taxes deducted from salary payments, to be issued to employees

Form 16

  • By 15 June of the next Financial Year
  • Penalty – Rs 100 for every day during which failure continues
Payment of TCS
  • 07th of next month
  • For the month of March – 30 April
  • Penalty equal to amount of TCS
Submission of Quarterly TCS Returns

Form 27EQ

  • Q1 (Apr to Jun) - 15 July
  • Q2 (July to Sep) - 15 Oct
  • Q3 (Oct to Dec) - 15 Jan
  • Q4 (Jan to Mar) - 15 May
  • Late filing fee - Rs 200 per day of default
  • Penalty in a range of Rs 10,000 to Rs 100,000
Certificate evidencing collection of TCS
  • Q1 (Apr to Jun) - 31 July
  • Q2 (July to Sep) - 30 Oct
  • Q3 (Oct to Dec) - 30 Jan
  • Q4 (Jan to Mar) - 30 May
  • Penalty – Rs 100 for every day during which failure continues
MAT Certificate:

Every Company paying tax under MAT is required to furnish Form 29B, certified by a CA

To be obtained before furnishing of Return of Income
Non-resident payments Any person responsible to make payment to a non-resident, shall furnish information in Form 15CA and Form 15CB Penalty of Rs 100,000
Statement of Financial Transactions (SFT) By May 31 following financial year end Penalty of Rs 500 per day from the expiry of original due date till due date in the notice and Rs 1,000 per day beyond the due date specified in the notice.

Income Tax – Transfer Pricing

Compliance Due Date Consequence of non-compliance
Local File:

Transfer Pricing Certificate:

Companies which have entered into international transactions or specified domestic transactions (‘SDT’) with its Associated Enterprise is required to furnish a certificate in Form 3CEB

Transfer Pricing Documentation:

Company is required to maintain prescribed documentation in respect of international

  • One month prior to due date of filing tax return (On or before 31 Oct of the year following the financial year end)
  • To be prepared before obtaining the Transfer Pricing Certificate
  • Penalty of Rs. 100,000
  • Failure to maintain requisite documents – 2% of the value of the international transaction or SDT
  • Failure to furnish requisite documents during the assessment proceedings – 2% of the value of the international transaction or SDT

GST

Compliance Due Date Consequence of non-compliance
Furnishing details of outward Supplies:

Form GSTR-1

Normal taxpayers having turnover up to Rs 1.5 crore and opted for quarterly filing – 30th of the month following the end of the quarter.

Others - 11th of the subsequent month

  • Late fee:
    • Normal Return: Rs 200 per day of delay subject to maximum Rs 5,000
    • Nil Return: Rs 100 per day of delay
  • Reduction in late fee vide Notification:
    • Normal Return: Rs 50 per day of delay
    • Nil Return: Rs 20 per day of delay
  • Interest on late payment of GST due @ 18% p.a.
  • If GST return is not filed, subsequent returns cannot be filed which results in cascading effect leading to heavy fines and penalties
  • Input tax credit cannot be claimed
Monthly GST return and the payment of GST:

In General -Form 3B

20th of the following month (Monthly)
Quarterly GST Return and payment of GST under Composition Scheme:

Form CMP-08

18th of the month following the Quarter (Quarterly)
Return to be filed annually under Composition Scheme:

GSTR-4

April 30 following financial year end
GST Return and payment of GST by an Input Service Distributor:

Form GSTR-6

20th of the following month (Monthly)
Monthly GST Return and payment of TDS under GST:

Form GSTR-7

10th of the following month (Monthly)
Monthly GST Return and payment of TCS under GST:

Form GSTR-8

10th of the following month (Monthly)
Annual Return:

Normal Taxpayer: Form GSTR-9

Composition Taxpayer: Form GSTR-9A

E-Commerce Operator: Form GSTR-9B

31st December of the next Financial Year
  • Late fee of Rs 100 per day per Act i.e., Rs 200 per day subject to maximum 0.25% of turnover in the State or Union Territory.
  • Interest will be paid at of 18% per annum, to be calculated on amount of outstanding tax to be paid.
GST Audit:

Applicable to regular taxpayer having aggregate turnover > Rs 2 Crores

Form GSTR-9C

31st December of the next Financial Year
Deposit of GST

Regular taxpayer – 20th of the following month.

Composition taxpayers – 18th of the month following the quarter

  • Interest @ 18%
  • Failure to deposit GST beyond 3 months: Penalty of Rs 10,000 or an amount equal to tax evaded, whichever is higher
Maintenance of separate accounts and other documents:

In case of multiple places of business (as per the registration certificate), the accounts shall be maintained at the respective place of business.

Penalty of Rs 10,000 or an amount equal to tax evaded, whichever is higher

Company Law

Compliance Due Date Consequence of non-compliance
Annual General Meeting ("AGM")

Within September 30 following the year ending March 31. (Within 15 months from the last AGM or 6 months from the closure of financial year, whichever is later)

In case of first AGM (newly incorporated company), within Dec 31 following the year ending Mar 31

On the Company and Every Officer acting on its behalf:
  • Fine – Up to Rs 1 lakh
  • Continuing default – Further fine up to Rs 5,000 per day of default
Filing of Audited Financial Statements and Director’s Report:

In e-Form AOC 4 for all Companies.

In e-Form AOC 4 XBRL to the following class of Companies:

  • All Listed company and their Indian subsidiaries
  • Paid up Capital ≥ Rs 5 Crores
  • Turnover ≥ Rs 100 Crores
  • Companies following Ind AS

Within 30 days of AGM

In case of One Person Company – 180 days from the closure of the financial year

On the Company and Every Officer in Default:
  • Penalty – Rs 1,000 per day of default subject to maximum Rs 10 lakhs
  • Additional fee – Rs 100 per day of default

 On MD / CFO / Directors:

  • Disqualification of director, if not filed for 3 continuous financial year
  • Penalty – Rs 1 lakh
  • In case of continuing failure, further penalty – Rs 100 per day of failure

subject to maximum Rs 5 lakhs.

Filing of Annual Return:

In e-Form MGT-7 for all Companies

In e-Form MGT-8 applicable to the following class of Companies:

  • All listed Company
  • Turnover ≥ Rs 50 crores
  • Paid up Capital ≥ Rs 10 crores
Within 60 days of AGM. On the Company and Every Officer in Default:
  • Penalty – Rs 50,000
  • In case of continuing failure, further penalty – Rs 100 per day of failure

subject to maximum Rs 5 lakhs.

  • Additional fee – Rs 100 per day of default

On Director:

  • Disqualification, if not filed for 3 continuous financial years
Director’s Report:

Directors’ Report shall be prepared by mentioning all the information required under section 134 and submitted along with the Annual Return in e-Form MGT-7

Within 60 days of AGM. On the company:
  • Fine - Rs 50,000 to Rs 25 lakhs

On every defaulting officer:

  • Imprisonment - up to 3 years; or
  • Fine - Rs 50,000 to 5 lakhs; or
  • Both
Service of Notice of Board Meetings

7 days prior notice before each Board Meeting.

(Shorter notice to transact urgent business permitted provided decisions ratified by at least one independent director)

Every Officer whose Duty is to give Notice:
  • Penalty – Rs 25,000
Board Meetings

Minimum of 4 meetings in a calendar year (Jan to Dec) with a gap < 120 days between two meetings.

First Board Meeting – Within 30 days from date of incorporation

On the Company and Every Officer in Default:
  • Fine – Up to Rs 10,000
  • In case of continuing failure – further fine extending to Rs 1,000 for every day
Directors Declaration:

Directors shall disclose their interest in other entities in Form MBP- 1

In the first Board Meeting in each Financial Year On Director:
  • Imprisonment - up to 1 year; or
  • Fine – Rs 50,000 to Rs 1 lakh; or
  • Both
Directors Declaration:

Every new director should furnish to Company a consent in writing in Form DIR-2 to act as such and certifying that he is not disqualified to act as director.

On or before appointment3
Company to file such consent with Registrar in e-Form DIR-12. Within 30 days of appointment of director On the Company:

Additional filing fee up to 12 times of normal fee depending on period of delay

Directors shall file a disclosure of non-disqualification in Form DIR – 8 In each Financial Year
Director’s KYC:

Every individual who has been allotted DIN as on Mar 31 of a financial year should submit e-form DIR-3 KYC.

June 30 following financial year end On the Director:
  • DIN will be deactivated
  • Cannot be appointed in any new company or LLP
  • Cannot resign from any company or LLP
  • Cannot mention DIN in any document in relation to company
  • Fee of Rs 5,000 for reactivation of DIN

On the Company:

  • Cannot file financial statements (AOC-4) and annual return (MGT-7)
  • Cannot file any form with DSC of such director
  • Cannot get any documents signed by such director

Appointment of MD / WTD / Manager

In Form MR-1.

Applicable to:

  • All listed company
  • Public Companies having paid up share capital of ≥ Rs 10 crores
Filing of Form MR-1 with Registrar within 60 days of appointment On the Company:
  • Additional filing fee up to 12 times of normal filing fee depending on the period of delay
  • Penalty – Rs 5 lakhs

On every Officer in Default:

  • Penalty – Rs 50,000
  • Continuing default – Further penalty of Rs 1,000 per day of default

Subject to maximum Rs 5 lakhs

Appointment of Whole Time Company Secretary

Applicable to:

  • Listed company
  • Public company with paid up capital ≥ Rs 10 crores
  • Every company with paid up capital ≥ Rs 5 crore

Form DIR-12 within 30 days of appointment

Form MGT-14 within 30 days of passing Board Resolution

On the Company:
  • Penalty – Rs 5 lakhs
  • Additional filing fee up to 12 times of normal filing fee depending on the period of delay

On every Officer in Default:

  • Penalty – Rs 50,000
  • Continuing default – Further penalty of Rs 1,000 per day of default

Subject to maximum Rs 5 lakhs

Appointment of Auditor:

Auditor shall be appointed for 5 years in E-form ADT-1.

Within 15 days from conclusion of AGM On the Company:
  • Additional filing fee up to 12 times of normal filing fee depending on the period of delay
  • E-form AOC-4 cannot be filed
Appointment of Cost Auditor:

Notice of appointment of cost auditor to be filed in e-form CRA-2

Within 30 days of the Board meeting in which appointment is made or within a period of 180 days of the commencement of the financial year, whichever is earlier On the Company:
  • Fine – Rs 25,000 to Rs 5 lakhs
  • Additional filing fee up to 12 times of normal filing fee depending on the period of delay

On every Officer in Default:

  • Imprisonment – up to 1 year; or
  • Fine – Rs 10,000 to Rs 1 lakh; or
  • Both
Appointment of Internal Auditor:

Applicable to:

  • All listed companies
  • Unlisted public company having, in the preceding financial year:
    • Paid up share capital ≥ Rs 50 crore: or
    • Outstanding deposits ≥ Rs 25 crores; or
    • Turnover ≥ Rs 200 Crores; or
    • Borrowings ≥ Rs 100 Crores; or
  • Private company having in the preceding financial year
    • Turnover ≥ Rs 200 Crores; or
    • Borrowings ≥ Rs 100 Crores
Filing of Form MGT-14 within 30 days of appointment On the Company:
  • Penalty – Rs 1 lakh
  • In case of continuing failure, further penalty – Rs 500 per day of failure

subject to maximum Rs 25 lakhs

  • Additional filing fee up to 12 times of normal filing fee depending on the period of delay

On every Officer in Default:

  • Penalty – Rs 50,000
  • In case of continuing failure, further penalty – Rs 500 per day of failure

subject to maximum Rs 5 lakhs

Maintenance of Registers:

Company should maintain Registers such as

  • Register of Members (Form MGT-1)
  • Register of Directors and Key Managerial Persons (KMP) and their shareholding
  • Register of Loan and Guarantee (Form MBP-2)
Register of Members

On the Company and every Officer in Default:

  • Penalty – Rs 50,000 to Rs 3 lakhs
  • Continuing default, penalty – Rs 1,000 per day
Register of Director and KMP

On the Company and every officer in default:

  • Penalty – Rs 50,000 to Rs 5 lakhs
Register of Loan and Guarantee

On the Company:

  • Penalty - Rs 25,000 to Rs 5 lakhs

On every Officer in Default:

  • Imprisonment – Up to 2 years; or
  • Fine – Rs 25,000 to Rs 1 lakh; or
  • Both
Outstanding payments to Micro or Small Enterprise:

Companies which get supplies of goods or services from micro and small enterprises and where payments to such suppliers exceed 45 days from date of acceptance of goods or services shall submit e-form MSME 1

Within a month for each half of the year.

April to Sep – Oct 31

Oct to Mar – April 30

On the Company and every Officer in Default:
  • Fine – Up to Rs 10,000
  • Continuing default – Further fine up to Rs 5,000 per day of default
  • Additional filing fee up to 12 times of normal filing fee depending on the period of delay
Resident Director:

Every Company should have at least one director who has been resident in India for at least 182 days in a year.

On the Company and every Officer in default:
  • Fine up to Rs 10,000
  • Continuing contravention - Further fine up to Rs 1,000 per day
MSME Return:

To be filed by all companies dealing with MSME vendors.

Half-yearly return for informing outstanding payment to MSME vendors

For the period April to September – October 30

For the period October to March – April 30

For the Company:
  • Fine – Up to Rs 25,000

On every Officer in Default:

  • Imprisonment up to 6 months, or;
  • Fine – Rs 25,000 to Rs 3 lakhs; or
  • Both
Return of Deposits:

Form DPT-3

30th June following financial year end On the Company and every Officer in Default:
  • Penalty – Rs 5,000
  • Continuing default – Rs 500 per day
  • Additional filing fee up to 12 times of normal filing fee depending on the period of delay
Filing of resolutions with the ROC:

Form MGT-14

Within 30 days of the board meeting On the Company:
  • Penalty: Rs 1 lakh
  • Continuing default – Rs 500 per day

Subject to maximum Rs 25 lakhs

On every Officer in Default:

  • Penalty – Rs. 50,000
  • Continuing failure - Further penalty Rs 500 per day

Subject to maximum Rs 5 lakhs

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