Income Tax Returns - Companies, LLPs & Firms

What does a business income-tax return involve?

Every company, LLP, and partnership firm must file an income-tax return every year, whether it made a profit, a loss, or had no business at all. The return reports income, claims deductions and credits for tax already paid, and computes the final tax or refund.

It's built on the audited accounts, adjusted for tax rules — disallowances, tax depreciation, and exemptions. For returns up to FY 2025-26, the Income-tax Act, 1961 applies; from tax year 2026-27, the Income-tax Act, 2025 takes over with renumbered provisions.

The key terms

A few forms, rates, and dates apply to business returns:

ITR-6 and ITR-5

Companies file ITR-6. LLPs and partnership firms file ITR-5. Companies must verify their return with a digital signature.

Company tax rates

Domestic companies can opt for a concessional 22% rate under Section 115BAA, giving up most deductions. Otherwise, 25% applies for turnover up to ₹400 crore, and 30% above. Surcharge and cess are extra.

LLP and firm rate

LLPs and firms pay 30%, plus surcharge above ₹1 crore of income and cess. Partners' profit share is exempt in their hands.

MAT and AMT

Companies on the normal regime may pay Minimum Alternate Tax on book profit. LLPs may pay Alternate Minimum Tax. Neither applies under Section 115BAA.

Due dates

Returns of entities needing a tax audit, including all companies, are generally due by 31 October. Entities with international or specified domestic transactions requiring a transfer pricing report file by 30 November.

Losses

Business losses can be carried forward for eight years, but only if the return for the loss year is filed by its due date.

Updated return

A return can be updated within 48 months of the end of the assessment year to report missed income, by paying additional tax.

Why it matters

Business returns carry consequences beyond the tax itself:

Mandatory, even at a loss

Companies and firms must file every year, regardless of profit, loss, or activity.

Losses depend on it

Carrying forward business losses requires filing the return on time. Late returns lose the carry-forward.

Regime choice

Choosing between Section 115BAA and the normal regime affects tax for years, since the choice can't be reversed.

Interest and fees

Late filing attracts interest on unpaid tax and a late fee, and may bring penalties.

Refunds

Excess TDS and advance tax are only refunded once the return is filed and processed.

Scrutiny risk

Returns inconsistent with the audit report, GST data, or TDS records are more likely to be selected for scrutiny.

Business credibility

Banks, tenders, and investors ask for filed returns.

Who is this for?

Section 8 companies and other charitable entities file ITR-7 if they're registered for exemption — see our charitable entities services.

Returns by entity type

The main differences at a glance, for FY 2025-26:

What we'll need from you

Audited accounts

Financial statements and the audit report, and the tax audit report where applicable.

Tax credits

TDS certificates, Form 26AS, AIS, and challans for advance and self-assessment tax.

Fixed asset details

Additions and disposals with dates, for tax depreciation.

Previous returns

Last year's return and any carried-forward losses.

Shareholding or partners

Shareholding pattern, or partners' details and profit shares.

DSC

A valid DSC of the signing director or designated partner.

Our fee depends on the entity's size and complexity, and on whether we also do the tax audit.

How we file your return

A business return is prepared after the accounts are audited:

1. 1

   Review the accounts

   Audited accounts and the tax audit report are reviewed for tax adjustments.

2. 2

   Compute taxable income

   Disallowances, tax depreciation, exempt income, and set-off of losses are worked out.

3. 3

   Compare regimes

   For companies, the tax under Section 115BAA and the normal regime is compared, where the choice is still open.

4. 4

   Reconcile credits

   TDS and advance tax are reconciled with Form 26AS and AIS.

5. 5

   Pay any balance

   Self-assessment tax and interest are paid before filing.

6. 6

   File and verify

   The return is filed and verified with a DSC, and processing is tracked.

After the return is filed

Filing is followed by processing and, sometimes, questions:

Processing

The return is processed and an intimation issued, showing any refund or demand.

Refunds

Refunds are paid to the pre-validated bank account, with interest where due.

Mismatches

Adjustments proposed by the department can be responded to online before processing is finalised.

Scrutiny

If selected for scrutiny, notices must be answered within their deadlines.

Revise if needed

A revised return can be filed within the allowed time to correct mistakes.

Plan next year

Advance tax for the current year should reflect what the return shows.

Benefits and responsibilities