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1. No business activity = No compliances required
2. Incurring losses = No compliances required
3. No idea what is compliances
4. Going to file for closure next year
The reason/s for every case of non-compliance is either or all of the above three. The fact, however, is that the Annual Compliances LLP has to meet even if there is no business activity. It is also not relevant whether you have any business bank account. Even if you want to close your LLP, the compliances have to be duly met. Basic annual compliances are something that your business simply cannot afford to miss.
In this blog, Taxmantra will help you with the returns which are to be filed mandatorily by LLP to the ROC & Income tax annually. The following returns are to be filed annually —
Filing with the ROC
- Filing of Annual Accounts – Every LLP is required to maintain the Books of Accounts as per Double Entry System. It has to prepare a Statement of Solvency (Accounts) every year ending on 31st March. If there are no transactions, then venture formation and allied expenses are to be booked. These expenses can be a part of LLP losses and these can be carried forward and set off in subsequent years.
LLP are required to file such Accounts in Form 8 to the Registrar. This form has to be filed within 30days from the end of 6months of such financial year. The accounts are to be filed on or before 30th October every year.
Moreover, the LLP whose annual turnover exceeds Rs. 40 lakhs or whose contribution exceeds Rs. 25 lakhs are required to get their accounts audited by a qualified Chartered Accountant.
Read our Blog: Audit Requirements of an LLP
- Filing of Annual Return – Every LLP is required to file Annual Return in Form 11 to the Registrar of Companies (ROC). It has to be filed within 60 days from the closure of financial year. An LLP has to close its financial year on 31st March every year. So, the Annual Returns has to be filed on or before 30th May every year.
Penalty –
The penalty for non-filing of these forms with the RoC is Rs. 100 per day per form. The dangerous part being that there is no upper limit on these LLP penalties. It goes on increasing every day during the period of non-compliance.
Filing of Income Tax Return
Every LLP is required to close its financial year on 31st March every year as per the Income Tax Act and is also required to file their returns with the Income Tax Department.
The LLP whose annual turnover exceeds Rs. 60lakhs, are required to get their accounts audited under the Income Tax Act provision.
Due dates for an LLP to file their Income Tax Returns are as follows:
- LLP whose accounts are not required to be audited under any law– 31st July every year
- LLP whose accounts are subject to audit under any law– 30th September every year or such other dates as notified by the Income Tax authorities.
Penalty-
There have been amendments in tax laws. These laws will come into effect from April 1, 2018. As per the same, taxpayers who do not file their ITRs on time will have to shell out a penalty of up to Rs10, 000. A two- level penalty in this regard: A fee of Rs5, 000 shall be payable, if the return is furnished after the due date but on or before December 31 of the assessment year and a fee of Rs10, 000 shall be payable in any other case.
At the starting up and development phases, a start-up is already facing the brunt of cash burns. Making ends meet is an objective for survival. In such conditions, huge penalties are severe hurdles. We have come across businesses who had to shut down due to these reasons. A compliance fee entails of Rs. 200 and overall Rs. 11000-12000. With due date coming up, it is high time to take up compliances now.
The due date of Form 11 filing for this year is 30th May, 2017. Have you filed yet?
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